Ad Blocking: The Impact for Advertisers and What Steps Pharma Marketers Should Take

Ad Blocking Software use has been increasingly raising concerns in the advertising industry. Ad blocking has seen growth of 41% globally between 2014-2015, corresponding to about 200 million users, according to the Page Fair/Adobe study “The Cost of Ad Blocking.” In the US, 16% of those surveyed are using ad blockers. According to estimates in the report, there was a $21.8 billion loss of global revenue due to blocked advertising in 2015, and that number is expected to nearly double globally for 2016.

Advertisers are raising concerns about the potential impact on their promotional efforts.

Background

Not all industries are affected equally. Ad blockers are most commonly used by Millennials and highly technical Europeans, affecting mostly the gaming and tech publishers.

According to the Page Fair/Adobe study, which, again, was global, almost half (45%) of ad-blocking users expressed a complete lack of desire to view any advertising, 17% cited that privacy concerns, but 30% of current ad-blocking users were open to some types of advertising. Intrusive ad formats were the key reason why ad blockers were utilized. The use of ad blockers is also more prominent on mobile devices, where it helps to speed up the load time of pages, and helps to elongate battery life. Apple’s iOS 9
opened up the ability for developers to build ad blocking extensions for Safari specifically.

Implications

Ad-blocking utilization can greatly affect publishers and their inventory availability, as ads blocked are not served, therefore not charged to advertisers. As publishers’ inventories and revenue diminish, CPMs may start to increase. However, publishers may see the need to adjust their business models, and look for alternative ways to make revenue, such as require subscription charges, and provide a broader range of products to enhance the customer experiences. It can push marketers to be more relevant and avoid waste, which in the end, can be a win for both advertisers and consumers. Pharmaceutical advertising has not been affected at the level of other industries – health in general had a total of 5.4% of ads blocked (PageFair/Adobe Study). Inventory and delivery of banner ads for our clients, as the ad blocking rates have been low, has not been affected. Financially, advertisers do not pay for blocked ads. Specifically, for the HCP market, the multi-channel approach also ensures that our
targets’ exposures are not limited to display only, but to a variety of channels that are not affected by ad blockers including sponsorships, content integration, emails, e newsletters, and custom programs.

CMI/Compas Recommendation

While pharma advertisers are not yet as directly affected, ad blocking will evolve, and some best practices should be followed: