This is the second in a four-part series looking at what happens when what you do is now done by someone else.
Ad-supported media does everything possible to entice an audience to consume content, and then makes money by distracting them from it.
Surprisingly, this paradox wins few fans.
Fed up with the experience of cluttered, slow-loading pages, almost a quarter of a billion people are turning to ad blockers. And they have good reason. Ad blockers create a faster, cleaner, albeit unsanctioned user experience that also prevents a user's data from being sold to a multitude of companies they have never heard of. That unsanctioned user experience is seen as markedly superior to the sanctioned user experience that publishers provide.
The downside is that it means media companies don't get paid. If they wish to remain ad-supported, there are two actions they can take in response. First, they can try and improve their own experience to reach parity with the unsanctioned user experience. Most publishers desperately want to improve their experience, and many sites have gone through a litany of revamps and redesigns. However, every major trend in marketing is acting against them.
Programmatic advertising is increasingly taking a larger and larger share of available inventory. This means that publishers have less control over their own inventory, while the server calls and tracking codes that slow page load and hurt user experience only multiply. The shift to mobile means that the only ads that make any money are either data-heavy video ads or intrusive in-stream or interstitial formats. Finally, as ad tech vendors have educated advertisers about better metrics, it’s no longer possible to simply hide the ads in unobtrusive spots. Advertisers will only pay for ads that are seen.
Publisher tech teams do their best to wage war on bloat and improve experience, but with these industry forces acting as a counterweight, doing so is often akin to trying to balance the federal budget by cutting funding for the arts. Pity the media company CTO who has to deal with orders to improve their UX while also improving viewability and programmatic and mobile CPMs.
Confronted with the Sisyphean task of improving their own user experience, media companies are instead doing what the music and movie industry did when confronted with a superior unsanctioned user experience: They are responding with legal threats and attempts to make the unsanctioned user experience worse.
Axel Springer and the Interactive Advertising Bureau (IAB) have both begun a game of legal whack-a-mole against the ad blockers, thus far with limited success, while a number of new companies run by former ad tech veterans have emerged, offering to block the ad blockers. The ad blockers have responded by claiming to be able to block the blockers of ad blockers in what will swiftly become the most difficult sentence to say in media. The best this strategy can hope for is that publishers can create such friction around the unsanctioned user experience that the benefits of leveraging it disappear.
In any case, what this elides is that, at a time when a user’s relationship with a brand is becoming paramount, media companies are effectively going to war with their own audience to make their user experience worse. This is not good.
Enter Facebook. Ad blocking has not thus far had a major impact on mobile traffic. However, it’s not because users are in love with mobile advertising. In fact, it contains all the same frustrations, with the added bonus that it actively costs them money. A 2015 New York Times analysis found that simply going to the Boston.com homepage once a day for a month would cost an average mobile user $9.50 just to download the advertising. Never let it be said that people will not pay for content. They do — they just pay the carriers for content they don’t want versus media companies for content they do want.
At a time when a user’s relationship with a brand is becoming paramount, media companies are effectively going to war with their own audience to make their user experience worse.
That ad blocking has not had an impact on mobile despite all this is thanks to Facebook and the other social platforms. Ad blockers do not work within the in-app browser, which is where most mobile consumption occurs. The good news for media companies is that within Facebook they can deliver their current mobile user experience to users. The bad news for Facebook and for users is that media companies can deliver their current mobile user experience to users.
Facebook’s attempt to deal with this is with the creation of Instant Articles. These are pre-fetched and loaded automatically from within the app, and are thus lightning-fast. Load performance is a factor in Facebook’s News Feed algorithm, and thus Facebook has been heavily promoting content using this native format. The carrot here is that media companies can deliver a greater user experience and more traffic to their content.
Instant Articles also provide media companies with two choices for monetization: They can sell their own advertising and keep 100 percent of revenue, or Facebook can sell it for them, giving them a ~70 percent cut. What this really means is that Facebook has now added hosting and monetization to the list of capabilities it can handle for media companies. This leaves media companies with the one unique activity that contains the most risk and variation: Creating content.
One can argue that this change will usher in a golden age where media companies can focus on the single activity they do best. Alternatively, one can argue that it means their utter disintermediation.
Read part one of this series here.
This article originally appeared on Recode.net.