Ad blocking is estimated to cost $22 billion in lost ad revenue this year.
Ad blocking is estimated to cost $22 billion in lost ad revenue this year. - 
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The digital ad industry is a $60 billion business that most people find totally annoying.

In their rush to make money off hot digital real estate, advertisers have crammed web pages, mobile web pages and even apps full of ads. The ads slow down pages, suck up mobile bandwidth, redirect you all over the web, gather data without your knowledge, start playing sounds at inopportune moments, and even become vectors for malware and viruses.

On mobile, ads are even more intrusive. Takeover pop-ups can be almost impossible to close without accidentally launching another page or, heaven forbid, the App Store. 

It's no wonder, then, that once people started to get easier tools to block ads, they jumped at them.

Ad blockers have existed for years, mostly as plug-ins for browsers that weren't always easy to install. But when Apple recently announced that its operating system would support ad-blocking tools in Safari, ad blockers rocketed to the top of the App Store download lists. According to one new study, ad blocking was up 41 percent globally in the last 12 months, and is estimated to cost $22 billion in lost ad revenue in 2015.

Ad blockers might be the controversial new face of ad fatigue. But according to Brian Wong, CEO of San Francisco-based startup  Kiip, people have been "ad blocking with their eyeballs" for a lot longer than they've been using ad blockers. He said for years advertising was based on "reach and frequency" metrics, and the idea that the more times you show an ad, the more likely someone is to buy a product. (You may be familiar with this concept from such frequently shown television commercials as DraftKings and FanDuel.)

"Those laws of physics are different on mobile," Wong said. "You see a brand many times, and you get annoyed." 

And brands have been slow to change.

"Respecting the consumer is pretty much nonexistent in the ecosystem of advertising and the incentives that it's set up," he said.

So Kiip is trying to invent a better ad, which is to say an ad that people actually want to see. The company makes a rewards platform that can be embedded in apps, like Runkeeper, Mint, AllRecipes, eHow, and even the connected-car device Mojio. So when a person is doing what they'd already do, like go for a run, track their finances, check off items on a to-do list or driving around town, they'll occasionally get pop-up rewards, like a free Gatorade for finishing a run, or a gas station coupon if the in-car sensor determines you're low on fuel.

Wong said the idea is to make the user happy to get an ad — partly because there's a payoff.

And although rewards and coupons won't replace banner ads across the web, they're one sign that digital ads might be starting to evolve.

The Interactive Advertising Bureau, which sets standards and best practices for the ad industry, recently published a blog post recommending new guidelines for ads. It starts with the words, "We messed up."

Scott Cunningham, the IAB vice president who wrote the post, said that the industry got addicted to the tools that made it easy to put ads everywhere, to target users across the web, and to keep showing the same ads over and over.

"From a technology perspective, the industry over the last six years has experienced the industrial age of automation," he said. As smart and sophisticated as that automation is, we need to be just as sophisticated, if not better, at knowing where to put the limits in place."

The new guidelines call for much leaner, lighter ads that won't use too much bandwidth, for "frequency caps" on how often ads are shown, for smarter targeting and for less-invasive ads.

At the media buying agency MEC, Shenan Reed, vice president of digital, said that in some ways, the ad industry is moving on without organizations like the IAB, and starting to set its own guidelines.

One of those moves is to enforce a new metric called "viewability." Google recently announced it would only sell ads that are 100 percent viewable — meaning they're not buried on a page somewhere or only viewable for a fraction of a second. Facebook and Twitter have viewability programs of their own, and Reed said publishers could end up designing websites around it — with a happy side effect. 

"We’re going to see fewer ads out of the publishers because they’re going to figure out the ones that really work under viewability, and they’re just going to get rid of the rest of them because nobody’s paying for them," she said.

And she said the ads that remain may be a little less intrusive. That could mean an increase in approaches like native advertising, where customized content gets created to look like a news article or entertainment video — kind of like the TV industry going back to product placement. And she said if she had her druthers, she'd have more options when it comes to ads — as in, more creative.

Reed said in an ideal world, she'd have as many as 700 different ads to work with, so she could place the perfect ad in the perfect place at the perfect time.

"The ads should be so close to understanding what this customer is truly interested in and truly wants, that that message resonates and makes them happy," she said. 

Could it work? According to this August survey, 73 percent of consumers said they are likely to engage in ads that are personally relevant to them. Like, perhaps, a free Gatorade after a workout. 

 

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Follow Molly Wood at @mollywood