Skirmishes and demographic cleavages

grand-canyon-850768_1280Skirmishes in the looming battle between publishers and ad blockers broke out again this week, as the concept of ad avoidance continued to disseminate more broadly. Who could have guessed just a few months ago that “ad blocker” would be one of the finalists for word of the year from the Oxford English Dictionary. Or that South Park would devote an entire episode of their long-running animated show to the topic of aggressive online advertising and the blocking reaction from readers. The sheer pervasiveness of the discussion across the internet continues to underscore the utter centrality of advertising to the commercial web and the deep-seated annoyance so many online consumers feel for it.

While there have been some high profile experiments in publisher pushback to ad blockers, notably attempts from the Washington Post, and the Bild newspaper in Germany, to turn away readers who ad block, these tactics have yet to spread widely. This week saw another major content company dip their toes in the blocking of ad blockers, with Yahoo not allowing ad blocking browsers to access the web mail portal for Yahoo email. First discovered by users of the Ad Block Plus forum and Digiday, the blocking appears to be a limited test in the US, with many Yahoo mail users not reporting any issues yet.

Former internet giant Yahoo is currently experiencing enormous business difficulties, and we have seen that their CEO Marissa Mayer is not sympathetic to ad blocking, so it makes a certain sense that Yahoo would be eager to experiment with revenue protecting initiatives like this. Nonetheless, it is hard to see how this move, which essentially holds the users’ email hostage until they agree to look at advertising, is likely to be beneficial long term. A Yahoo email address is not considered prestigious, and it is likely just inertia that keeps long-term users coming back. Yahoo may have decided that they do not want users that they cannot monetize through advertising and are hoping that they can change the problematic behavior, but without giving users a reason to stay, I am sure many will just make the easy switch to gmail or Apple mail (a decision even a former Yahoo email executive announced on Twitter in response to Yahoo’s actions).

The Yahoo executives who decided on blocking the blockers made the calculation that anybody using a Yahoo email account is likely someone resistant to change and technically unsophisticated. The Bild newspaper that has been so aggressive against ad blockers recently, also has a more conservative and older clientele (it is kind of like a German combination of USA Today and Fox News). The Springer publishing house that owns Bild must assume that its readers would rather change their ad blocking behavior than go to other news outlets. Yet the longer term effect, of limiting their readership to the less technically savvy may not make economic sense, if the value of that advertising demographic is lower. Traditionally advertisers have valued younger and more sophisticated audiences as more likely to change buying preferences and have disposable income. The ad blocking trend makes that desirable demographic even harder for marketers to reach, and conversely increases the value of publishers who can actually deliver them, possibly through voluntary whitelist appeals.

There is a possibility that the internet will divide readership-wise, between those publications that appeal to the less technical/advertiser friendly, and those that have an audience not reachable for advertising, who will need to find other revenue models. Just as we would have had a hard time predicting just how prevalent the ad blocking discussion has become, it would be quite a reversal of prior visions of the commercial internet, as the site of future-looking/youthful innovation in marketing. Instead, we may see an internet that harkens back to the most simplistic and crude advertising methods, as they chase a more and more backward looking demographic, the only one advertisers can find online.

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