Whose 'Right' is it Anyway? Why the New EU Laws on Digital AdBlockers May Lead to growth and evolution in our AdTech world.

Publishers produce content which consumers engage with. Advertising served around the content has to pay for content creation, because consumers don’t need to pay for content from one supplier when they can get similar content from another one, for free.

The basic economics of digital content production.

If you are able to gather data on your users, through a combination of information given at the point of registration, and by monitoring their usage (where are they located, what device(s) are they using, what times of day, day of week do they engage, etc) then you can also use that data to target better ads on your site, or sell that data on for a price, so that others can benefit from using that data to run ‘better ads’ or ‘better targeted ads’ to those users. This can only be done with the consent of a user, which they give when they land on the site and receive a small notice about accepting cookies, which they don't read, but always click on.

So far, so illogical - so what? Read on, and i'll get to the point - the paradigm is being shifted.

In traditional media, pre-digital, consumers generally paid for the content they read – in magazines, newspapers, books. They understood that paying a cover price meant the content could be created. With radio and TV, it was clear that the ads were there to pay for the content (or, in the case of soap operas, the soap companies were producing the content, and it was, in its own way, the earliest form of ad-funded content). Consumers seemed to accept that if they wanted content, they paid either by cover price, or through receiving ads – or both.

With digital, however, the consumer seems to see it a little more like this -

‘I like to read about things and watch videos on stuff that I’m interested in, which I can do so for free, online. There are ads, served around those articles, but I tend to ignore them – although sometimes they get in the way. My mate just showed me how to stop the annoying ads, by installing an adblocker on my computer – I don’t see any ads, but I can still get the content. It’s great.’ 

Thing is, it isn’t great. It’s terrible. Why? Not because of some virtuous nonsense about it being theft, or because I think it’s morally wrong. But rather, because without the ads being served, the content generators are not getting paid. If this continues ad infinitum, then content creators will go out of business. Thus, the model is broken. The consumer may think it is great, but the final bit about ‘still being able to see the content’ can’t continue to happen if the people making it go out of business.

How and why did this happen? We can leave that for another day, for now, let’s just deal with ‘what is’, and what the solution(s) are.

Firstly – whose right is it anyway? Should consumers be forced into accepting that if they want to engage with the content that someone has produced, then they must accept the advertising? It seems a bit draconian to me that there should be laws that insist on it. We don’t have those with radio, but then again, you can’t block radio ads.  You can change the channel when the ads start though. I’ve always wondered why commercial stations don’t all have ad breaks at precisely the same time, to ensure that their medium isn’t devalued. But I digress. With TV, you can record the content, and skip the ads on a PVR. You can’t quite do the same with catchup TV online though. Deloites said in 2015 that 53% of all US users were watching tv content outside of the linear broadcast – so clearly consumers can accept that.

So if forcing the users to see the ads is draconian, is the opposite, ie the status quo, the ‘fair’ answer? Should adblocking simply be accepted as a logical evolution in a laissez-faire economic model? Should we therefore accept that content creators will go to the wall, and that the economics of Darwinism will apply – ‘it is not the strongest who will survive, but those who are most capable of change’? Seems equally unfair to me. 

Perhaps it is our fault, as an industry – if the ads were not so intrusive, or annoying, then it wouldn’t happen. If consumers understood that the ads they see on the content they like are paying for them to engage with the content for free, would they still block ads? What if they had a choice? I personally believe that would be preferable – “Dear consumer, thankyou for coming to our site, to engage with the content you love. We love creating it for you, although there is a cost to that – please accept the advertising on our site as a way for us to keep producing our content, and keep that content free – or alternatively, you can click here and we will charge you x pence per article. If neither model works for you, then we will be unable to continue to serve you content. We hope you understand.”.

Sounds reasonable to me, and I hope that’s the future we get.

Last week, the EU announced some legislation which might just pave the way to some such happy future. Perhaps we need ‘hope’, no more, as, pertaining to Adblockers, the EU has ruled that

1)    Users have the right to install them;

2)    Publishers have the right to detect who is using them (and react accordingly);

3)    Carriers (ISPs, mobile networks) cannot implement adblocking at Carrier level (3 were experimenting with Shine to see what impact carrier-level blocking might have).

Personally, I believe that these are very wise laws indeed. I think it helps us to redress the balance, and to evolve a brighter future, as a result. Firstly, it gives choice to consumers, as they can install adblockers if they wish. But also, it gives choice to creators of content, as they can do something about users who block ads – more on that in a moment. 

Up until this point, as an industry, for the record, I think we’re to blame for this situation. Mea culpa, mea culpa. We expected consumers to enter into an unwritten contract (‘the content is free, you pay for it by seeing ads, and having your data sold’), but we didn’t actually tell them they were doing so. More fool us.  This has lead us to a world of too many ads, ads becoming wallpaper, people feeling that they are being ‘stalked’ by advertisers through retargeting, and a focus on the 0.2% that responded, rather than the other 998 out of 1000 who didn’t – even though the ads were being served to the right people, and generally looked good.

I hope (and don’t get me wrong, I’m not getting too slushy over this) for a future with fewer ads, but well targeted ads; a future within which consumers understand that they can pay for content by dipping into their wallets if they choose, or by seeing ads – ads which are, hopefully, relevant to them, which look great, and which are genuinely adding to their experience. A world where the best AdTech ideas rise to the top, because they add value, and one within which we can add value to them by helping them to find the best people and places to push them forward. A world with content, well monetised, and consumers who are not being treated like a commodity, being bought and sold because ‘if you’re not sure what the product is, it’s you, buddy’. A meritocratic world, ie one where the best ideas float to the top. Now, wouldn’t that be nice? Growth, and evolution, in our AdTech world.

Let me know what you think in the comments, and thanks for reading. Connect Digital Group helps with growth and evolution, in our AdTech world. Whether AdTech businesses are looking for new people, or looking to expand into new geographic territories, we have some great models to help. If you, or someone you know, might need our services, please drop me a line. In any event, I hope you enjoyed this piece, and i'm keen to know your thoughts on the subject, in the comments below.