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Who Will Pay for the Google-ization of Digital Advertising?

Tom Sullivan

June 6, 2017
Tom Sullivan

Google’s new ad blocker will soon control the online advertisements you are exposed too, and at a cost.

In my February 28, 2016 Insight Tuesday, I brought attention to the “Ad Wars” between publishers and the millions of consumers who are using ad blocking software so they can access online content without having to view commercial advertising. The solutions I called for included cost transparency, better data-driven advertising to increase ad relevancy, and improved aesthetics to elevate the consumer experience.  These solutions require time driven by free market forces and innovation. However, Google is in a hurry to get there faster.

We know Google today as one of the biggest brands on earth. It’s starting to make many wonder, how big is Google? We no longer recognize it as just a search engine. Google is now our Android, alerts, finance, books, maps, email, video, docs, hangout, calendar, drive… the list goes on. And from a recent release, it will be our new ad blocker too.

If you are a Google Chrome web browser user (half of you most likely are) the advertisements you are exposed too will soon be put in the hands of Google and the Coalition for Better Ads. The Google ad blocker will roll out next year, and be the default setting for the Google Chrome web browser. The filter will block all ads that violate the Better Ads Standards and have been identified as being highly annoying to users, have caused egregious ad experiences, or are misleading or abusive.

It doesn’t stop there.  As part of their effort to maintain a sustainable web for everyone, Chrome users will no longer be able to use third party ad blockers, unless they want to be charged. With Google’s “Funding Choices”, publishers can show a customized message to visitors using a third party ad blocker, inviting them to either enable ads on their site, or pay for a pass that removes all ads on that site.  By implementing a charge, Google now minimizes the use of ad blockers that block all ads, including Google’s, and encourages the use of their own proprietary ad blocker, that they control.

It is apparent Google seeks more control by taking the reins of “Ad Wars” but, for the good of who?

When thinking about this question, it is important to consider who is part of the Coalition for Better Ads. Google is of course, as well as Facebook. These two companies accounted for 99 percent of all digital ad revenue growth in the United States last year, and 77 percent of gross ad spending according to an analysis of IAB estimates. That means two companies will be leading and shaping the online advertising marketplace – for us.

            As Google works to expedite their very own ad blocker, consumers, publishers and advertisers need to consider the potential pros and cons of a Google-driven marketplace. These industries need to intelligently participate in the conversation if they want a voice in helping to shape it.

 

The Pros of Google’s Ad Blocker Strategy

Google is touting a “more sustainable web for everyone” by removing clutter, providing only high-speed, non-interrupting, high-quality ads and assisting providers to create more responsive ads. A case can also be made that this approach will provide publishers with a more stable and sustainable business model since they will be compensated regardless if a content user chooses to see or to not see ads.

 

The Cons of Google’s Ad Blocker Strategy

While many of the pros sound attractive, what wider price must be paid for the Googleization of digital advertising beyond consumers paying for using the web to access publisher content? One price is availability of options.  Clearly, consumers won’t have a choice of what ads are being blocked or shown.  And ad blocking software competitors will be run out of town. But the cost to comply or not with the new marketplace may also mean the death of many smaller publishers who won’t be able to afford the conversion to a new system.

Bigger, longer-term issues are at stake. For one, the range of experimentation and innovation by newcomers and potential competitors will be limited since the swimming lanes will be well-defined and controlled in what is essentially a Google-regulated marketplace. Perhaps the biggest price will be the solidification of the dominance of Google in the digital content and e-commerce marketplace.  Most consumers will be oblivious to this evolution.  They will click onto their Chrome browser and most will never really notice that everything behind the curtain has changed.