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Below are summaries and video of Part 1 and 2 of DCN’s “The Consumer Rules: Lessons From Ad Blocking” event, held December 16, 2015 at the Newseum in Washington D.C. Part 3, a fireside chat with FTC Commissioner Brill can be found here. 

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Jason Kint kicked off the event “The Consumer Rules: Lessons From Ad Blocking” by framing Digital Content Next’s interest in the ad blocking issue—as an organization that exclusively represents digital content companies who have direct, trust-based relationships with consumers and advertisers. While he made it clear that advertising is certainly not the sole revenue channel for DCN member companies, he pointed out that for all members—who compete on the same digital devices across the same pipes—digital ad revenue is an important piece of the future.

Given that, as Nielson reports year after year, digital advertising is one of the least-trusted forms of advertising, it is clear that there is a fundamental problem that’s leading to distrust of digital advertising. And a growing number of consumers are opting out of advertising by blocking ads wholesale, thereby removing the major revenue source for digital content. Kint pointed to Adobe / PageFair research which brought the growth of ad blocking into the spotlight as well as recent DCN research, which looks at consumer plans to adopt ad blockers.

Some of the primary reasons for consumers choosing to install ad blockers, according to the DCN Report, include: intrusive advertising, concern about behavioral tracking and data collection, speed and performance of the web (particularly on mobile). While Kint said the entire industry does need to think about performance and experience, we also need to keep a close eye on privacy concerns.

Here’s the video:

Digiday staff writer Ricardo Bilton then moderated a panel featuring Jed Hartman, CRO of the Washington Post, Heather West, senior policy manger of Mozilla, Fatemeh Khatibloo, principal analyst at Forrester Research, and Ben Barokas, CEO of Sourcepoint.

Among the panelists, only one said that they do not run an ad blocker: Hartman. West said that she installed one out of pure frustration based upon a poor experience at a single site, a type of behavior she described as “the nuclear option.” Not surprisingly, Khatibloo gave her reason as a desire to block data collection whereas Barokas’ cited the need for a comprehensive understanding of ad blockers as essential to his business. He also said that there’s only upside for consumers who install ad blockers today.

However, Hartman—the lone holdout among the panelists—pointed out that if these panelists represent a growing and ongoing trend, many “household name publishers will close their doors.” And that, he said, is not ultimately good for the consumer. To forestall this trend, the Washington Post has invested in research on consumer ad experiences that will continue to support the creation of content they rely on.

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The ad blocker ‘solution’ is sort of a Trump-like solution:
‘No ads come in!’ —Jed Hartman, CRO, Washington Post

(Watch here)

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Barokas noted that the implied contract by which the consumer tacitly agrees to view advertising in exchange for content is seeing the end of days. He believes that we need to move to a model in which this agreement becomes explicit through “a transparent value exchange.”

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The implied contract is that a publisher will provide content to the user in exchange,
the user will consume the advertising to subsidize that experience.
We’ve gotten to the point from an industry perspective where that needs to move from
being implicit to explicit.  —Ben Barokas, CEO of Sourcepoint

(Watch here)

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 Media companies, according to Khatibloo, have been poor communicators with consumers, particularly about the data collection that is going on, but she also admitted that it is very difficult to do.

Mozilla’s perspective, said West, is not about ad blocking. Instead, it is about content neutrality that is based upon openness and transparency about how Mozilla makes the distinction about bad content, whatever the source. She also agreed with Khatibloo’s point that there’s a need for better communication between consumers and publishers and believes that Mozilla is in a good position to help enable this process.

Things are going to change radically over the next few years, according to Hartman who is hopeful there will be a more “surgical approach” to ad blocking in the near future. And he believes that if many publishers work hard to improve ad experiences and mobile load times, adoption can be slowed on mobile.  Khatibloo countered that even premium publishers are doing an “atrocious job” on mobile advertising and that it eats up consumers’ data.

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We have this opportunity in mobile to prevent [ad blocking] from happening…
the trouble is that even premium publishers are doing an atrocious job with mobile advertising.
–Fatemeh Khatibloo, principal analyst at Forrester Research

There aren’t really good mobile formats that will compensate the publishers to the degree
that they need in order to be able to create quality content profitably.
—Ben Barokas, CEO of Sourcepoint

(Watch here)

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While several panelists touched upon the dubious “white listing” practices of ad blocking software companies, Khatibloo mentioned the constructive approach of the EFF’s proposal to white list sites that adhere to what it deems to be appropriate consumer protection guidelines. She also believes that the time is right for micropayments, which give consumers the clear option to compensate publishers while pointing out that the level of revenue is not likely to make up for the loss of advertising.

Hartman raised the question of whether advertiser desire for data may be driving ad blocker adoption. Big Data, he pointed out, has been one of the big innovations in advertising, yet it is a challenge in the ad blocker community and makes conversations with marketers very difficult.

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We haven’t talked about advertisers yet, but they wield enormous power… Big data has been the trend.
Probably the biggest innovation in advertising has been the use of data… but it is [an issue] with the ad blocking community. —Jed Hartman, CRO, Washington Post

(Watch here)

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Looking to the future, Hartman expressed the opinion that we’ll see a change in advertisers’ perspective once there aren’t enough eyeballs available via digital advertising because of ad blocking. Meanwhile, he said publishers will start to “clean up their act” and focus on creating better digital advertising experiences.

The discussion was then opened up to audience Q&A.

Here’s the video: