Ad Blocking & Beyond: How Advertisers Are Adapting to Changing User Behavior

Ad blockers are on the rise. Estimates suggest nearly 33% of Americans now use them habitually when browsing the internet.

Unfortunately, ad-blocking growth has had a harmful effect on the advertising industry. The practice limits the views companies can earn through paid online advertising, reducing opportunities to reach target customers and turn a profit.

This shift comes from changing user behavior. People are increasingly worried about online privacy and want to avoid intrusive browsing experiences. Consequently, advertisers are having to rethink their strategies.

This article will cover the direction this trend is taking. It discusses how advertisers can adapt to changes in user behavior (including ad-blocking) and alternative advertising channels that may offer a more sustainable (and user-friendly) solution.

The Rise of Ad Blocking: A Response to Disruptive Ads

What Are Ad Blockers?

Ad blockers are digital tools that stop ads from appearing on websites. The services provide users an uncluttered experience, allowing them to enjoy pages without pop-ups, banner ads, or other intrusions.

Ad blockers first appeared in the 1990s as standalone software to prevent ads and cookies. Later, Danish software developer Henrik Aasted Sørensen introduced the concept to the masses with his software, AdBlock, in 2002.

Around 1 billion internet users worldwide now use ad blockers of some description, with many built into mobile browsers by default. The industry most affected is digital advertising, but the impacts are felt across the board, including in hospitality, retail, and consumer products. Moreover, ad-blocking rates are growing. 2024 saw the highest use of ad blockers to date.

User Behavior Driving the Trend:

Users want ad blockers because they help them avoid some of the more annoying aspects of browsing. Most people don’t like annoying pop-ups and auto-play videos vandalizing their online experience; they want crisper, more natural relationships with the websites they use.

Furthermore, the drive for privacy is also playing a role. Thirty-nine percent of individuals surveyed say they’d prefer tech corporations not to scrape their browsing data to advertise to them more effectively. Rather, they want control over the content they see without intrusive commercials harming the experience.

Impact on Advertisers:

The consequences of this behavior on advertisers are significant. The primary issue is the loss of revenue. Platforms that host adverts (including independent websites) lose money when ads aren’t present or don’t get seen/clicked. Ad viewability is also lower. Remarketing on third-party websites is less effective, reducing opportunities for conversion.

Lastly, advertisers find it harder to reach target audiences. Ad blockers prevent them from collecting granular user data, stopping them from offering targeted services. Brands must publish ads with a broader brush, reducing the effectiveness of the service.

Alternative Advertising Channels in Response to Ad Blockers

Social Media Ads:

While the growth of ad blockers is concerning for many advertisers, publishers, and tech giants, brands are finding ways around the problem.

One method is to use platforms like Instagram and TikTok to offer less intrusive ad formats that blend into the user’s experience. Advertising feels more like regular content, and users self-select it (i.e., they choose the posts they want to consume).

Social media ads often take the form of user-generated content (UGC), where users’ peers present products and services instead of the brand. This approach offers social proof and circumvents the annoying intrusiveness of conventional ads.

Podcast and Streaming Ads:

Both podcasts and streaming platforms offer alternatives to traditional ads, reaching a more native feel. Creators can slip commercial messages or reviews into their productions, making these formats an important part of the evolving advertising landscape in response to ad blockers and changing user behavior. Furthermore, most keen listeners of specific podcasters want to listen to their recommendations because they trust them.

Out-of-Home:

Out-of-Home (OOH) and Digital Out-of-Home (DOOH) advertising are experiencing a resurgence, too, partly due to the rise of ad blockers and shifting digital behaviors. The effectiveness of traditional and digital OOH formats offers a way to reach audiences in environments where ads cannot be blocked or skipped. Bus signage and billboards are two excellent examples.

Retail Media Networks:

Lastly, retail media networks (RMNs) allow brands to advertise directly within the digital ecosystems of major retailers like Amazon, Walmart, and Target. Companies are paying these platforms to display their promotions, aligning more with the shift towards non-intrusive, personalized, and targeted ad experiences. These are becoming a first line of attack for many brands that can’t reach users through conventional organic channels.

Privacy-First Strategies in Advertising

Shift to First-Party Data:

Given the rise of GDPR and other regulations, there’s a movement toward first-party data. Companies gather this information with the user’s consent from interactions with brand properties, often through websites or apps.

This data is helpful because it replaces the need for third-party cookies. Instead of tracking users without their consent, companies simply ask them for permission to use their data (bypassing the concerns of privacy-focused users).

Contextual Targeting:

Contextual targeting is another innovation. It eschews potentially unreliable cookies or user-browsing data in favor of generating ads based on the consumer’s current content consumption (i.e., showing fishing rod ads on a blog about fishing).

Consent-Driven Advertising:

Finally, there’s a trend toward consent-driven advertising, in which users permit brands to track them. This practice is becoming more popular as companies search for approaches that align with enhanced ethical data practices. Many firms want to demonstrate their commitment to transparency in their use of customer information.

Innovative Technologies Helping Advertisers Adapt

AI & Machine Learning:

While the changing ad landscape poses some challenges for advertisers, new technologies may help. For example, AI & machine learning are improving ad targeting by collecting meta-level data that doesn’t rely on personal data. Predictive algorithms and contextual AI can sometimes guess what users want from their ads without collecting cookies.

Programmatic Advertising:

Programmatic advertising is also boosting efficiency. The technique allows advertisers to deliver personalized messages while respecting privacy.

Interactive & Shoppable Ads:

Finally, advertising innovations like AR/VR make native content more shoppable. Users can interact with advertisements and make purchases within platforms without being forwarded to a third-party website (which could harm their experience).

The Future of Advertising in a Post-Ad Blocker Era

Personalized but Privacy-Conscious Ads:

Personalization will likely continue in the post-ad blocker era, but it will increasingly have to balance user expectations and privacy concerns. Brands will use technologies to match their messages to the reader but also adopt privacy-first practices, like encryption and anonymization.

Subscription-Based Models & Ad-Free Options:

Another development is the emergence of Netflix, YouTube Premium, and other subscription services that offer ad-free experiences for a fee. These platforms are self-funding, meaning advertisers can’t rely on them to generate revenue. While some have free versions that use ads for earnings, most don’t.

Consumer Control & Transparency:

There’s also a trend toward giving consumers more choices in the advertising they receive. But far from being a bad thing, this switch could lead to higher engagement. Making ads contextual could dovetail with on-page native content, making them more effective.

Emerging Formats:

Lastly, innovations in advertising formats, such as virtual influencers and in-game advertising, can better evolve to changing user behaviors. These reduce costs while also leveraging new technologies, like AI.

Conclusion

Ultimately, advertisers are moving beyond traditional ad formats and adapting to changes in user behavior. Brands (and platforms) need strategies that circumvent traditional ad blockers and manage users’ legitimate privacy concerns.

Because of this, the future of online advertising is likely to see significant innovation. Companies will attempt to balance the user experience with brand promotion while showing more respect to their audiences.

Both consumers and advertisers must adapt to ad blockers and embrace more user-friendly advertising practices. The key is to understand why people decide to use them. Some simply don’t want to see ads, while others are more worried about their privacy. Adapting outreach strategies to these needs is essential.

Are you looking for a platform to manage your advertising inventory? Reach out to a member of our team today.

Originally posted on ADvendio.com on 15th October 2024.