The announcement of Google Chrome’s ad-blocker, or ‘ad filter’ as they refer to it, has been met with a combination of praise and suspicion.
The ambition of the Coalition for Better Ads – of which Google is a member – to reduce the number of intrusive, poor quality advertisements should be applauded. This will benefit users who are becoming increasingly frustrated with a disruptive and slow browsing experience.
Those suspicious of Google’s actions, view the move as a further extension of their power in the advertising space, “a cartel orchestrated by Google” said Mark Patterson, a Fordham legal scholar. Therefore, the question must be asked: “should the role of ad-blocking be carried out by the world’s largest, and most profitable ad revenue generating business?” Probably not.
How does it work?
The product itself will be a pre-installed ad-blocker within browser that automatically blocks pop-ups, flashing ads, large format sticky ads and other intrusive formats. In addition, users with other third-party ad-blockers installed are required to whitelists sites (through Google approved ads), or pay for the content (a service called Funding Choices), of which the publisher will receive a payment and Google will also receive a portion of the money.
In the content space, Google has been evaluating sites for years via its PageRank algorithm, which penalises slow loading websites or advertising that outweighs content. The algorithm not only promises users can find better quality sites, but also incentivises publishers to improve their websites. By applying the same rules to advertising, Google is attempting to improve the user ad experience and encourage publishers to remove poor quality ads. However, the key difference is the conflict of interest Google have in the advertising space, potentially becoming the “de facto” filter for competitor ads.
Setting the standards
The advertising standards Google propose to enforce are based on research conducted by The Coalition for Better Ads and have been developed accordingly. Interestingly, this research is yet to review ‘video ads that appear before (“pre-roll”) or during (“mid-roll”), so essentially YouTube advertising. Given the scale of pre-roll investment, it seems surprising that this wasn’t reviewed.
For example, if future research were to suggest pre-rolls as intrusive, would Google block these ads across their own sites? Unlikely, and this highlights the “conflict” Google faces in delivering this service.
Taking aim at the ad-blockers
Strategically, the launch of their own ad-blocker enables Google to address the challenge posed by third-party ad-blockers, such as AdBlock Plus, currently active on over 100m devices worldwide. AdBlock Plus also have their own ‘acceptable ads programme’ and users have the ability to whitelist sites similar to the Chrome product.
However, AdBlock Plus are much more likely to also block ads across Google sites. By switching people to their native product, Google will reduce this risk and the need to make payments to AdBlock Plus to enable acceptable ads to appear.
What does this mean for publishers?
Publishers could be the big losers here. Already facing challenges from existing third-party blockers, the introduction of a default blocker on the world’s most popular browser will undoubtedly hit their bottom line. Publishers will need to move quickly to ensure their ad inventory now meets the standard of Google’s requirements.
Furthermore, publishers are under additional pressure to deliver high viewability rates to advertisers. Many of the formats listed as intrusive, such as Sticky ads, have been specifically designed to deliver viewability. By reducing the ability for publishers to deliver viewability will, in turn, have a knock-on effect on their revenue.
The Funding Choices service may offer some comfort, although it is unlikely people will start paying for content in this way – particularly as a simple switch of browser will avoid the Chrome blocker completely.
What does this mean for advertisers?
The impact of ad-blocking has been less tangible for advertisers, however, the potential scale of Google’s service, combined with the existing third-party blockers could reduce inventory volumes and in turn lead to CPM inflation as advertisers compete for a smaller pool of viewable quality impressions.
In addition, advertisers need a healthy publisher ecosystem in which to operate and deliver their campaigns. Fewer publisher and standardised creative options will limit an advertiser’s ability to differentiate itself from the competition and create the necessary cut-through.
Neutrality & Impartiality
Whilst Google’s membership of the ostensibly independent Coalition for Better Ads group helps to legitimise their role in ad-blocking, they can never be truly impartial when enforcing the guidelines. Furthermore, their involvement in the group enables them to influence its direction and shape the standards by which others will be held accountable.
Few people would argue that reducing intrusive low-quality ads is a bad thing. However, a neutral and impartial party is desperately needed to implement these requirements in order for the guidelines to be successful.