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Whether you think it’s a real problem or not, there’s no denying that ad blocking is a lightning rod in the industry right now. With potentially hundreds of millions of dollars at stake for media companies, advertisers and advertising platforms, figuring out how to combat and counter ad-blocking behavior is top of mind.
But avoiding ads isn’t a new behavior. Remember the fear surrounding the launch of TiVo and DVR? AudienceXpress President Walt Horstman does. With more than a decade of experience working with cable, video and digital TV, Horstman says this year’s ad-blocking frenzy has similar undertones to the fear of DVR 10 years ago. We’ll dig much deeper into this issue during the ad avoidance discussion at eMarketer Attention! 2015, but we got Horstman’s point of view in advance of the event.
eMarketer: How would you define ad avoidance? Is it just about ad blocking, or is there something greater afoot?
Walt Horstman: We should define it more broadly than just ad-blocking, to include non-ad-supported programming and content. By defining ad avoidance more broadly, we open up the discussion of the economics of media and what the various economic models are for providing high-quality content. And it’s the economics that are driving the fear.
eMarketer: In our current advertising landscape, what do you believe is the most prevalent example of ad avoidance?
Horstman: While this topic is extremely timely right now with the launch of the ad-blocker apps on mobile, technology has been at work trying to block ads for quite a while. Just look at the history of the DVR. When it was introduced, there was great concern over the health of TV advertising—the adoption of the DVR and how consumers use it didn’t bring about the catastrophe scenario that some worried it would. What it did inspire, was a change in the currency for TV advertising so the economic model can adapt to new technological introductions.
The reaction of a number of publishers to the ad blocking apps on mobile has highlighted the economic issue as well. Many small publishers can't sustain themselves without ad dollars and it’s healthy that this aspect is coming to the forefront of the discussion. The tech issues with how mobile ads get served and displayed do need to be resolved, but that is distinct from the economics of media.
eMarketer: Lots of research focuses on millennials, but have you seen interesting patterns or trends in terms of avoiding ads from other demographics?
Horstman: Looking at TV or video specifically, we can define the new [over-the-top] OTT services that are not ad-supported as ad avoidance, and these services appeal to a fairly broad demographic. But again, it does ultimately come down to economics—because high-quality programming requires a great deal of investment.
eMarketer: You've worked in “traditional” cable, and now with programmatic TV. What’s the biggest change you’ve seen in terms of how advertisers are trying to capture consumer attention with video?
Horstman: Targeting on TV has become quite sophisticated in the last few years. Traditionally, marketers could target on TV only through broad age and gender demographics. Today, marketers have a wealth of advanced data sets, for example, that marry credit card spending activity with TV viewership and packaged-goods purchases with TV viewership. With these advanced data, marketers can now find their desired audiences, often in unexpected places. For example, most people expect that active Sephora shoppers are likely to watch traditional female-skewing TV networks. In fact, CNBC and Bloomberg TV have very high composition of this audience. The advanced data sets are enabling marketers to capture consumer attention by placing the right ad in front of the right audience at the right time.
We also have the technology now at scale to execute TV campaigns using these advanced data sets.
Walt Horstman will be on a panel at eMarketer Attention! 2015, our October 27 event in New York.
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