The problem with Ad Blockers

This might be an unpopular opinion, but I strongly believe that ad blockers are not the solution - and that they actually contribute to the problem they claim to solve.

Here is why.

The first-ever digital banner ad on the Web (for AT&T ?? ) was shown in 1994.

And, oh my, has digital advertising come a long way since then…

Online advertising spending is expected to continue its impressive growth - from just over USD 600 billion in 2022 to over USD 876 billion by 2026. ??

Why this much, you ask? Well, it works in terms of ROI! ??

And because of that, online advertising has quickly become one of the main sources of revenue for publishers. Most newspapers, for example, launched online editions and started monetising their site traffic using banner ads.

As more more and more traditional budgets were cut, publishers had to add more ad banners to increase online revenues to "keep the lights on".

This led to poor user experiences, with ads often taking up most of the screen and making it difficult to read the actual information you were after.

Which, in return, gave birth to the rise of the mighty ad blockers.

According to the 2022 PageFair Adblock Report - a fascinating read - more than 820m (!) devices globally were blocking ads by Dec 2021.

Ads being blocked completely by users, of course, translates into revenue loss for publishers.

How much exactly is difficult to measure as

"94% of global publishers surveyed say they cannot precisely quantify the revenue loss incurred due to adblocking."

But there is a loss in revenue, so what do publishers have to do to make up for that?

That's right, include even more ad banners on their site or allow for even lower quality ads to be shown, hoping that it makes up for a bit of that lost revenue. And the vicious cycle repeats. ??

But... what if there was a different way? ?

In the same report, Adblock confirm that

"82% of adblock users prefer a lighter ad experience by default over receiving prompts to disable their adblocker or whitelist a site"

In other words, not all ads are "bad" and most users don't mind seeing a few relevant, high-quality ads that align with their interests. ??

So how do you then, as a publisher, reconcile the need for fewer ads on the one hand with the need for higher revenue on the other hand?

One obvious place to start is with the revenue you are losing to fees. ??

And that's where we here Alkimi come in.

Contrary to traditional ad exchanges, we do not charge the lion's share of each ad dollar in fees.

As per Karina Montaya's great recent article on the DOJ vs. Google

"In total, Google keeps at least 35 percent of every ad dollar spent, and Google’s AdX has maintained an undisturbed 20 percent fee since 2009."

Compare that to our baseline fee of 1.5% for publishers and advertisers and you start to understand how

• advertisers stand to get a lot more actual ads out of their ad spend ?? and
• publishers stand to receive a much fairer portion of each dollar in revenue ??

Most importantly, this reverses the vicious cycle of

• too many ad banners
• low-quality ads
• poor user experience
• more ad blockers being installed
• loss in revenue
• publishers being forced to add more banners
• (rinse and repeat)

Instead, you get:

• fewer ad banners
• high-quality ads
• better user experience
• no need for ad blockers
• same (or even higher*) levels of revenue
• (rinse and repeat)

* thanks to our lower fees, advertisers can bid higher CPMs ad slots that are most relevant for them ??

In summary, there is a way to more fairly rebalance the value exchange between publishers, advertisers and Internet users, making it unnecessary to go to either extreme of the spectrum between spamming users with too many ads or blocking all ads categorically.

And that's a wrap for today - let me know your thoughts, I would love a discussion on this!

If you liked this article, please feel free to like, comment or share and to follow me for more content like this.

Want to learn more about how Alkimi is revolutionising the ad industry?

If you are a publisher or an advertiser, head over to https://alkimi.org

If you are interested in joining our community:

?? https://t.me/Alkimi_Exchange