Embracing ad blocking – A digital advertising model that increase relevancy and revenues, decrease ad spamming, and make a better experience for everybody in the ecosystem. Following is an idea that could change the future of the interactive advertising industry.Check it out, leave your impressions with a comment and if appropriate share it with your peers. Originally published in Pulse – LinkedIn

Why Digital Advertising?

Digital advertising supports the free digital content and services economy. Publishers depend on ad dollars to provide their services. There is no discussion about that. There is also no discussion, about the ad-blockers impact on legitimate publishing businesses and the interactive advertising industry as a whole.
I’ll try to tackle this conundrum, focusing on the one part of the puzzle that’s often overlooked, the consumer. Perhaps in doing so, consumers will see the value of sharing personal information, ads will be more relevant and effective, publishers will be able to charge more for those ads, and they will need fewer ads to support the operation making a better experience for everybody in the ecosystem.

The end of the chain is the consumer

Display advertising ecosystemMost of the ecosystem depictions show a complex value chain from the marketer to the publisher (See LumaScape below.) At the same time, those maps show little or nothing between the publisher and the consumer. Suddenly, the consumer turned on ad-blocking functionalities, and it is felt through all the layers.
Looking into the alternatives, consumers can resource to AdChoices and ask not to see a specific type of ad, or be informed why they are seeing that ad. While AdChoices is a good starting, the consumer is asked for feedback after the fact, needs to train the system, or settle to receiving explanations like: “This ad may have been matched to your interests based on your historical activity.”

The consumer should be included as part of the ecosystem, but not just as eyeballs

The consumer should be included as part of the ecosystem, but not just as eyeballs. If we say digital ads pay for content, show them the money. On top of adding transparency, the ripple effect may positively change the dynamic of the consumer/publisher/marketer relationship.

Behind the eyeballs, there are brains.

The research conducted by Schumann, von Wangenheim [1] supported the idea that “a reciprocity argument has a stronger effect on users acceptance of targeted advertising than does a relevance argument.” Perhaps, if we can make the customer pay for the content in some way, they will understand the value of the content. We need to remember that the content perceived value is affected by the perceived quality. At the same time, perceived value is affected by the perceived sacrifice i.e. what they need to give in exchange.

What if we give customers money?

Stop. Not US dollars. We pay them with an ad virtual currency they can use to pay for content. For the purpose of this article, we’ll call it AD$.
Every page the customer access is now an economic transaction. They will be remunerated with AD$ for the exposure to ads, and at the same time, they will pay for the content with AD$. To maintain the transparency of the transaction we create a Customer AD$ Ledger (not a wallet please!). The Ledger will maintain the balance between the AD$ earned and AD$ paid.
New digital advertising model - The Ledger
Any web page will add enough AD$ to the Ledger to support the content. The balance of the transaction is zero as the AD$s support the content. Note that if the consumer does not have a Ledger, the content is still displayed, as the ads support the content in the old fashion way.
The AD$ Ledger is different from incentive-based ad viewing. Those are providing gift cards, perks, and other benefits. In some cases, it can be interpreted as a bribe or payment for a job done.

Seeing an ad is not a job, it is the way consumers pay for content. Therefore, AD$ are units to show a pure immediate transactional value exchange, reinforcing the concept that ads support and pay for content.

Seeing an ad is not a job, it is the way consumers pay for content. Therefore, AD$ are units to show a pure immediate transactional value exchange, reinforcing the concept that ads support and pay for content.

How the Ledger may increase ad relevancy

To make ads more relevant, targeted and effective, we need to get more information about the customer. If it is true that “we value your privacy,” put the (AD$) money where your mouth is.
Adding relevancy to digital ads
Consumers that set the Ledger with key demographic information will receive Highly-Relevant Ads. Additionally, they will receive more AD$ than the necessary amount to pay for the content displayed. Now consumers can use the balance on other sites.
Everybody is happy: 1)The customer accessed the content and made a profit; 2) the marketer reached a relevant prospect, and 3) the publishers can demand more money for HR-ADS placing.

AD$ increase cross-device attribution and tracking

Cross device attribution digital advertising
Customers with a positive Ledger balance will demand to have it available to spend on other platforms. At the end of the day, it is their AD$, and they should be able to use it all the time. Their request will justify the notion of cross-device identification. In other words, if you want to use your AD$ somewhere else you must identify yourself across devices, making cross-domain attribution much easier.

Ad-Blockers become part of the system

Digital Advertising and ad blockers Digital Advertising and ad blockers
Consumers may choose to use an ad-blocking function for sites that are supported by ads, with the condition they have enough credits on the Ledger to pay for the content. If they have no positive balance, they will be denied access to the content (or any other action the publisher decides to take.) They can always disable the adblocker to access the content.

Ad supported content sites can now have a way to charge for premium content. I know, the publisher receives AD$, and they need to pay employees in US$. Keep reading, I promise to address the conversion next. Ad-blocking and Ledger functionalities can become standard features of all browsers.

Balancing the AD$ economy

Balancing the Digital Advertising ecosystem

The AD$ ecosystem will have three basic sites:

  1. Sites that earn real money and leave zero AD$ balance,
  2. Sites that have increased income due to HR-Ads and give more AD$ to the customer,
  3. Sites that provided content in exchange for AD$, but have no real $ income from ads due to ad-blocking.

The AD$ monetary system will require a neutral reconciliation exchange i.e. a mediating entity.
Sites of type 2 will receive more money from advertisers because the ads are highly relevant. At the same time, they will need to purchase AD$ to “compensate” the customers.
The revenues (in US$) in the AD$ Reconciliation Exchange coming from sites of type 2 will pay sites of type 3 that didn’t earn money because of the ad blocking feature.

The AD$ economy ripple effects

•Ad-spamming sites i.e. those filled with annoying ads and fluffy content will need to pay high fees to the reconciliation exchange because of the high number of ads served. If they decide not to participate in the AD$ reconciliation exchange, customers will consider coming back since they see “no benefit” from that site.
•Let’s assume Ad-spamming sites participate in the AD$ reconciliation exchange, and their AD$ for content balance is zero i.e. they price their content high in amounts of AD$ to justify the high volume of annoying ads. I can forsee the following thought: “In the WSJ I pay for all the content 10 AD$, and here I’m paying 120 AD$ for a cosmetic surgery gone bad picture?” Suddenly, consumers don’t care anymore about the number of ads displayed; they check how much AD$ they pay for the content.

Suddenly, consumers don’t care anymore about the number of ads displayed; they check how much AD$ they pay for the content.

•Content-oriented sites e.g. newspapers will be able to make additional revenues from premium content. Consumers will be able to “pay” for content with AD$ and publishers will get real money from the reconciliation exchange.
•Mobile service providers may block all ads across their network (as Digicel announced will do). But instead of coming from advertisers and publishers, the outcry will arise from the operator subscribers, now unable to access any content because they have no AD$ to earn or spend.
•Publishers will not be required to pay to be whitelisted in an ad-blocker list. If they are ad-blocked, they will still get compensated.
•It will be interesting to see how the pricing in AD$ influences the consumer perception of the content value and vice-versa.
•The AD$ reconciliation model, together with cross domain attribution, and highly relevant ads will create a better consumer experience. The combination will reduce the amount of spamming ads, and raise the price per ad.

Final words and a small request

Once the cycle completes, consumers will see the (AD$) value of sharing personal information, ads will be more relevant and effective, publishers will be able to charge more for those ads, and they will need fewer ads to support the operation making a better experience for everybody in the ecosystem. An ecosystem that now includes also the consumer.

I presented here an idea, looking at the ad-supported content challenges from a consumer perspective. I tried to leave the bits and bytes out, and describe a (crazy?) model. Before we debate why technology can or cannot support it, please challenge the concept. Present the cases where it will never work, or perhaps help improve an idea that could change the future of the interactive advertising industry