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Online ad blocking has become an arms race - and advertisers are partially to blame

We talk to a leading industry figure about the future of digital advertising.

Image: andy orin

THE AD INDUSTRY has to shoulder some of the blame for the escalating arms race between ad blockers and online advertisers, according to one leading industry figure.

AdRoll co-founder and president Adam Berke said the ad sector had “done a bit of a poor job” explaining to users how it helped pay for all the free content people expected to get online.

“There has been this implicit agreement between internet users, which we all are, and advertisers that says OK, I’m going to get these products for free,” he told TheJournal.ie.

I’m going to be able to read your article for free, I’m going to be able to listen to music for free, I’m going to be able to watch this video for free – everything I want, I want it for free, but there’s going to be advertising.”

Adam-Casual1 AdRoll president and co-founder Adam Berke

According to figures from Dublin-based anti-adblock company PageFair, an estimated 18% of internet users in Ireland now use software to block internet ads, which many complain blight their favourite sites or make pages slow and unresponsive.

The Washington Post this week took the drastic measure of shutting out readers using ad-blocking software, citing its need for digital ad revenue to pay for the people who accessed its journalism free online.

“When you use an adblocker, you are actively hurting the content creators that you love,” Berke said.

I think some companies like the Washington Post saying ‘hey, we rely on advertising to provide you with this content, please (exempt our site) on your adblocker or turn it off maybe’ is the right kind of dialogue to get out of the arms race.”

screen shot 2015-09-10 at 14.17.08

Retargeting

Berke’s views aren’t a big surprise, of course, given his company’s bread and butter is selling advertisers tools to make their digital campaigns more effective.

He was in Dublin late this week where his rapidly-growing company, the most-popular platform for digital ad “retargeting”, employs around 100 staff, its second-biggest office worldwide after its San Francisco headquarters.

Last year AdRoll raised $70 million (€62 million) in one funding round as it reported an annual revenue rate of $150 million (€132 million), still a tiny fraction of the $135 billion (€119 billion) it was estimated companies spent on internet ads in 2014.

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Online advertising has quickly evolved from essentially the same as the print equivalent – images on a page – to something bought, sold and manipulated in real time based on anything from the time of day to users’ locations.

ADROLL Inside AdRoll's Dublin office

Retargeting takes that process one step further, crunching unique user data – from desktop browser cookies to other anonymous identifiers on Apple and Android devices – and using it to funnel digital ads towards individual users.

Visitors to a site, for example a bike shop, can be targeted with future ads for similar products once they leave the site in a bid to convert them to customers.

A browser looking at bike accessories could even be bombarded with different ads to a road-bike shopper.

Berke said it would only be a matter of time before all advertising went down a similar route to online ads and became programmable – even hold-outs like the TV industry, which still sold slots on a show-by-show, network-by-network basis.

People will do the jobs of creating strategies and targeting and creative and things of that nature, and then we will use technology to do the stuff that humans aren’t very good at like make millions or billions of real-time bidding decisions and optimisation decisions,” he said.

READ: The CEO of a billion-dollar startup who quit for his family is back working in Silicon Valley >

READ: The Irish website that looks like it hasn’t changed in forever is finally getting a makeover >

About the author:

Peter Bodkin  / Editor, Fora

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