Video:AdWeek Adblocking discussion on The Guardian Stage, hosted by DCN.
Highlight transcript (see full discussion in video)
Jason Kint, CEO of Digital Content Next, introduces the panel. [hear our podcast discussion with Jason Kint here]
…we’ve assembled here three speakers that we are delighted to have to really focus on the consumer.
Chris Duncan is the Chief Customer Officer at News UK, and is experienced on the advertising and marketing side you can read his bio but now he’s in charge of customer for News UK.
Dr Johnny Ryan from PageFair who has been – if you follow PageFair and their story – he’s been one of the best voices out there in the ad blocking discussion. He’s also written quite a bit about history of the internet etc. A quick kind of binary question to start off with. Do you see this ad blocking crisis as a problem or do you see it as an opportunity? This is to you Johnny.
Dr Johnny Ryan, PageFair
I think it’s a crisis that should not be wasted. If you think about where all this comes from there’s a history of multi-billion dollar investment in ad tech with very few of those dollars being focused on the consumer or what the consumer wanted. So what we’re seeing is this cul-de-sac that is being created by this weird circular dynamic where publishers are increasingly desperate to monetize the content are giving away for free. In a sense they’ve let advertisers run amok on their websites.
And in response – because they’re getting increasingly snooped upon, because their connections are increasingly slowed, and because there are more and more ads shouting at each other shouting over each other on the websites – you’re getting to a point where the consumers are taking action in their hundreds of millions and voting with their their fingertips and saying “no” to ads.
Now I think we’re going to look back maybe five years from now and we’re going to realize that this moment – this blocking crisis which publishers really are feeling the pain from – that this has actually been a very good thing. Because it is like hitting the reset button. And if there’s anything that that publishers have needed for the last ten years (I used to be in that particular bucket), and that consumers need, and I think that advertisers need, it’s a reset button. Adblocking has done that.
Interesting. Brendan problem or opportunity?
Makes sense. Chris problem or opportunity?
I agree both these gentlemen. I think it’s a bit like teenage acne. It’s a product of a growth spurt somewhere else. You’ve seen his huge change over the last few years disruption by search, disruption into social, but we’ve really seen the last three years is concentration into the mobile and that concentration in the smartphone has broken some of the previously working or creaking parts of the ad infrastructure and in a sense we’ve taken that out on customers and so it’s a huge opportunity I think to reflect and think well what is this this new model which none of us have seen before, how is I can over the next few years.
No, and it wasn’t planned. The cookie was mainly for caching your login credentials so you did not to re-sign and all the time when you restart your browser. There was a little local storage for first party information. Image was already there from 1993 in Mosaic thanks to Marc Andreessen and it went cross site and the two of them combined and made tracking. So, if you think about intentional design of web standards we can do a lot better.
But right now there’s a big ecosystem that evolved. There’s the settled predator prey and parasite host relations and they’re not totally stable, but all the incumbents are worried about a big change putting too many of their customers in in trouble or putting themselves out of business.
Do you do look back at those two things and I think if they have been done differently things will be better
Dr Johnny Ryan:
Do you mind if I jump in?
Yes of course, go ahead.
Dr Johnny Ryan:
Even before the Web, you know we had this amazing moment, we could have had something called “X.25”. We could have had this totally locked down network that would work almost like when you’re connecting to your Sky box that the telephone company controls everything. And instead of x.25 – which you don’t know and you’ve never heard of – something else won: TCP/IP. And the Wild West was created. So all of the structures that we have are built on this magical mix of really disordered, really uncontrolled, very open and free, protocols. And it creates this this crazy situation.
I see someone in the audience asking “what’s he talking about” – what I’m saying is everything that we do today is slightly built on shifting foundations. It could have been locked down in the 70s and 80s. And some of the things that we’re seeing are slow evolutions out of that history. And so it shouldn’t be too much of a shock that every now and again we get these big do-over moments.
You say that like it’s a bad thing but…
Dr Johnny Ryan:
Oh no I’m not…
I don’t think that we would have had the internet and the Web explode if you have if we had something like X.25.
Dr Johnny Ryan:
Yes. Yes. I’ve heard you both talk about that before and you know the importance of the open Internet is something I think everybody that’s everybody who has been in this industry for a while appreciates. To that point Johnny, the LEAN acronym was mentioned earlier by IAB, which is a nice framework for dealing with this problem.
But then there was a follow-up called DEAL, which was “here is what publishers should consider doing”. I looked down that list, and it was: circumventing the ad blocker, blocking the ad blocker, charging the consumer. My one issue was that none of those tactics really seem better for the consumer. When I read through them they were all things that would make things more difficult for the consumer, and cost to the consumer money.
And then the other thing that’s happening is this this idea that Facebook – this closed platform – and Instant Articles will be a solution. That concerns me the greatest, I mean that anybody should move to a closed platform. Are we missing the consumer here?
Dr Johnny Ryan:
Wow, that’s every question in one. Ok let me try and tackle two of them. So Brendan already mentioned this hazard that if publishers feel that the open web is a hazardous platform for them that they may start pumping content – as some are already doing – into closed systems, into walled gardens like Facebook Instant Articles, like Apple news, and in that sense they fall into the terrible trap that the music industry fell into years ago. They become producers of commodity content. So clearly that is something that publishers should think long and hard about before engaging in.
On DEAL, to be honest I haven’t seen a very thorough breakdown of what DEAL is so I don’t feel equipped to critique it positively or negatively. I am optimistic that that what comes out of LEAN can be very useful and positive. So let’s see. We want to support them as much as we can.
There’s something in your question about “how does this work for consumers”. I can’t claim to be fully representing the consumer here by any stretch of the imagination because the party that PageFair here represents here is the publisher. That’s who PageFair is fighting for. The publisher will not be served by some short-term solution that screws over the consumer. That can’t happen. And the publisher won’t be served by any short-term solution that that short changes the advertiser either.
You may recall we released a report back in August last year where we blew up a lot of the stuff around that this topic. We’ve been looking at this for several years now because the founders of PageFair started off with this problem as publishers themselves: publishers of a very niche tech game website, so they felt the pain of ad blocking. Now what they have done over the last six years is develop a technology that can show ads in a way that adblockers are entirely ineffective against. This is something that we’ve been quiet about. We are teasing it out. The reason why we aren’t going around the place marketing the hell out of this thing – I know I’m talking about now in public – but the reason we’re not being loud is that we can’t go and put back all of the ads without acknowledging that hundreds of millions of people have rebelled against the status quo in advertising.
So we’re trying to figure out what is a sustainable and responsible advertising experience. Experience is the wrong word. Ads that the consumer can tolerate. What is sustainable and responsible and will not bring us back into the same cul-de-sac.
So Brendan, I think you’re trying to trying to do maybe some of that with Brave. Can you give the audience the pitch on Brave?
What I’m trying to do with Brave is represent the consumer first but also help the publishers because we don’t think simply blocking ads and giving users the best, fastest experience, cheapest data plan experience is good for the whole ecosystem. It’s not ecologically sound. We want publishers to be more solvent then they are under the current regime. That means some combination of micro payments we think.
And when I say better ads I don’t just mean LEAN. In the last panel there was a focus on surface characteristics: if they’re more engaging, if they’re lighter, and they use https they’ll be okay. What was ignored was the tracking that is required in many people’s opinions to do that kind of advertising, and that takes a heavy cost in terms of scripts and the pixels and signaling, and that’s something that Brave blocks.
So Brave is a very radical approach. We can chlorinate the entire swimming pool because it’s full of algae and critters and parasites and we start over from a clean slate. But we try to give a default – because users don’t change defaults at scale – that mixes better anonymous ads with private analytics for placing those ads. Private to the browser, but on device only. And the applicability to micro-pay your top ten sites from a revenue share that we think the user is entitled to. So we’re seeding a user wallet from ads we hope to insert. Now everyone knows that they’re there are some challenges to that the whole plan, especially about inserting ads. But if we pull it off we hope to make publishers direct payments at 55% of the advertising revenue and that’s not a lot of money to the user. So by default that trickles out to their top sites, so the total shared to the publishers is 70%. So Brave is actually trying to help publishers to the same revenue share level that Facebook Instant tries to reach and in the App Store of course and this is this is a generous revenue share in my opinion. I’ve talked to a lot of publishers who see programmatic paying them less.
They also like their direct and private marketplaces where they think they’re making more, but they’re still playing partners, still paying for data and tracking. And we would like to help those those publishers to preserve their ads. Some of them are local, some are great native ads, but not use those those trackers. We’re against the trackers. And that’s what Brave is about and that’s how we’re growing
Chris I so if you look at kind of three consumer issues that – if I if we try to summarize the issues that are causing a blocking – I think Mozilla has done a good job of dividing those into security issues, privacy issues, and performance or experience issues. Everybody has a point of view and there’s different research on which one’s the biggest issue. Do you see an underlying thread that kind of connects to all three or are you trying to focus on one thing?
I think in some ways you have to look at those and preface it with saying that people don’t like bad tracking, bad ads, and you know bad security. Customers are complex and customers at the moment is saying when you listen that they’re what they’re basically saying is “I like unlimited content. I don’t really want to pay directly for it. I like recognition when it suits me but I don’t really want to do something that I don’t like. I’m prepared to give details and I’m prepared to give my thumbprint in some cases, but only in certain places”.
So for a publisher for any consumer market it’s a very complicated set of rules to guide by. Consumers have expressed a very complex set of things. I don’t think it’s as simple as being able to just say “well tracking is bad”. Tracking is bad in certain cases in certain places by certain companies for certain ends and consumers will absolutely, you know, leap upon that and stop it.
As a publisher nowadays there’s a queue of people like Brendan and others who are queuing up to give publishers a rev share of things that they used to keep all off which is very generous of them all.
You know from the publisher’s point of view I think you have to step back again and realized that what you can’t do is get caught into managing the customer experience just on your own infrastructure so a publisher today in a way of coming out and publish the stories that we did this morning if with Google with Facebook on our own infrastructure on other apps in Twitter zap lots of different places what we have to be thinking about now is how we’re going to manage the customer experience of the future how are we going to be able to provide an answer for customers you say “do you track me”. And I’ll say – I have to say at the moment – “well where were you reading me”, because if you answer on your site I track you in a certain way, if you are on Facebook I track in a different way…
About the blocked web, we at DCN are very much focused on the consumer we feel like all the the noise in the marketplace and the strong language, and words like “extortion” and “mafia” etc. is a distraction from solving the consumer the consumer issue and they’re blocking will continue to grow so I guess question for you is you is, AdBlock Plus, who were on the previous panel have the largest market share of adblockers. I think people recognize that they allow data collection and retargeting, Criteo was mentioned, and malware can still get through. But if a browser like Brendan’s Brave became the market leader that might solve all these things and allows through trusted advertising from a publisher directly is that a better world five years from now?
Dr Johnny Ryan:
Aside from who’s doing it the question is if you had better and trusted advertising five years from now would the world be better? The answer has to be yes.
But maybe I’m simplifying this too much. You can start to think what ads should now be shown on this empty web. It’s like you’re now back to 1995, back at the beginning of advertising, and you get to decide with the benefit of hindsight what we put back. Surely the first answer is that we can’t put back anywhere near as many ads as were on the Web before.
The standards of what is a good ad creative fail to acknowledge that the creative quality of ads can’t be good when there are too many ads, because the market incentive for the advertiser is to spray and pray. Whereas if you only permitted one or two ads in a short space, over a certain amount of content, the advertiser would have to increase their investment in the in the quality of the creative.
You referenced earlier the music industry. I look back at the music industry, and what happened with piracy. Everyone was focused on free versus pay, on people stealing songs. And it turned out that what the consumer really wanted was individual songs, portability, a better user experience. Is there a lesson there for us in terms of how we address this?
Dr Johnny Ryan:
Well the first lesson is: suing Napster didn’t solve the problem. The same goes for suing Eyeo, the company behind AdBlock Plus. There is something very empowering about taking action when you’re under pressure, and emotionally I would understand that. But the example from the music industry is if you knock out one player there’s no reason why other players cannot join the fray.
The other lesson is it’s very hard to predict what is in the consumer’s mind. The music industry could have come up with all sorts of different models for what might have worked. They just did not have the structures to explore with those models might be. In the advertising industry we’ve had about a hundred and thirty years of experience that essentially boiled down to this: if the punter can avoid the add the pointer will avoid the ad. There was a reference to the remote control in the last panel as though it were invented in the eighties – it was invented in 1952. But people have always been able to swivel their necks so people skipped the ads even before. That’s not going to change.
We know that i would or advertising has always worked. Even despite the “I don’t know where fifty percent of my budget is going” and so on. Outdoor advertising has an enduring quality. Even if we are walking around the place wearing VR headsets in ten years, we’re still going to do outdoor ads! I’m not necessarily here to defend the display ad format. I’ve no investment in that particular part of the status quo. But I’d say we’re still going to be seeing display ads and that’s not necessarily a bad thing. Intensive targeting right down to the individual is not necessarily better then an outdoor big billboard.
What’s going on here? What’s going on here is that the Web has always been about this race to cheapness, right, it’s been a race to cheapness for performance. It has never really been the place where you pay for value to build brands at the top of the funnel. It’s never been good at the top of the funnel.
But now you have this this bunch of people who are pissed off with the status quo who have been at the bottom of the funnel. Now they switched off tracking. But you can show them respectful ads and doing so I think you’re getting to the point where you have a part of the Web where you have top of funnel advertising.
PageFair’s ad serving technology displays safe and respectful ads in a way that adblockers are unable to block. It is the leading global authority on adblocking, issuing the most widely-cited reports on the topic over the last four years. PageFair is also working with global stakeholders, including publishers, consumer groups, advertisers, agencies, and browsers, to develop sustainable approaches to advertising on the web.