Digital media companies are dealing with a bunch of problems plaguing their advertising-based business models. A growing number of people are blocking the ads running on their sites, forcing publishers to find ways to get those people to unblock their ads or pay one of the ad blocking companies to do so. And the share of their audiences that aren't blocking ads aren't always seeing their ads to the chagrin of their advertisers. And then there's a portion of the audience that are computers disguised as people that are created to filch advertisers' money with the added effect of scaring off those advertisers from putting more money on the table.
Google is among the biggest of digital media companies grappling with these issues to protect its own business and that of the publishers who use its ad technology to run ads on their own sites. During the Interactive Advertising Bureau's Annual Leadership Meeting this week in Palm Desert, Calif., Ad Age sat down with Google Senior VP-Ads and Commerce Sridhar Ramaswamy to discuss the rise of ad blocking, why Google pays AdBlock Plus maker Eyeo to unblock its ads and to what extent the Google-led Accelerated Mobile Pages project is addressing the biggest issues plaguing publishers.
The transcript has been edited for length.
What are you seeing in terms of trends among Google's audience when it comes to ad blocking?
For the longest time, ad blocking was sub-scale, meaning it was relatively small. And some publishers, for example, in Germany, who tried to be more aggressive with ad blocking, found that generally attracted more attention. But what we have seen of late is that it's increasingly a mainstream phenomenon. And of course with Apple making moves to have ad blocking also go to mobile and also our own observations about how the mobile ad experience has gotten worse for several sites, we think this is actually a great time for the industry to be talking together and figuring out what are better ad standards. The fact of the matter is that when you want to read a short article on something and you click on a link, you're not expecting to have an ad that completely covers the screen [and] have to hunt around for the X. I think there are a number of experiences that are not great, so I think we need to come up with a better ad standard. The IAB has one; it's called LEAN. We are talking to them. We are talking to a number of other people. It's more than a standard. We also need to figure out how we can ensure the publishers that follow that standard don't have their ads blocked. So I think there's a lot of ecosystem work that needs to happen. But I think doing this is critical for our future and for the future of the advertising industry.
What specifically is Google doing?
You'll see more details come. But we're working on figuring out what are standards we can all agree with in terms of this better ads experience. Aspects include latency, how many requests are fired and what kind of experiences are OK and not OK and so on.
Have you noticed any differences between ad blocking and the people who use ad blockers on mobile versus desktop?
It's very early.
Google reportedly pays AdBlock Plus maker Eyeo to unblock its ads as part of the Acceptable Ads Program. Is that true, and if so, why?
So we are part of their Acceptable Ads Program. This is AdBlock Plus's Acceptable Ads Program. And the program requires that we pay them. The program only covers a portion of our ads.
Why participate as opposed to leading the charge against it? IAB CEO Randall Rothenberg has criticized that program. Why not be on that side of things?
It's not an either-or, though. We are doing both. We get affected both ways.
There are other issues affecting publishers today like viewability and fraud. Google's Accelerated Mobile Pages product (AMP) seems to offer a clean slate for publishers and advertisers to address these issues. How do you think about AMP and the opportunities within AMP to tackle these bigger issues?
This is where we can leverage the work that we have already done in terms of viewability and make sure it's kind of built in, say, natively into AMP. There's a little bit of a game of cat-and-mouse when it comes to these kinds of standards. For example, with spam detection, one has to be careful with how many details one reveals, not because one doesn't want to reveal the details but because doing that encourages spammers to come up with some other schemes. So you have to be careful of how exactly you shift the technology. But I feel pretty confident the work we're doing in Active View can be very directly and easily adapted to something like AMP.
I think it sets a clearer expectation and baseline with advertisers. It removes a set of fears around whether they are wasting money. And having it be the default for display advertising certainly sends a strong message that we get them clean traffic. I think this is one of the big advantages that Google can bring to the table, which is that we do hold ourselves to very high standard when it comes to quality of traffic that advertisers get. In that sense, it sets the conversations on a very positive tone.
It's been a few years since Google rolled out Enhanced Campaigns to get search advertisers to pay more for mobile search ads. Mobile search ad rates have been going up, so it seems like Enhanced Campaigns is working. But I don't hear about Enhanced Campaigns that often.
Enhanced Campaigns have more than achieved their purpose. The goal of Enhanced Campaigns was to really put into practice the idea that mobile needs to be a fundamental part of every digital advertising campaign, including search. And it has more than achieved that. Now we no longer have conversations with our advertisers about should you be having a mobile campaign. The attitude has shifted to: of course. To be honest, the strength in mobile search advertising, especially that you've been seeing, I would trace back to Enhanced Campaigns and a resetting of this conversation where mobile went from being a special case that advertisers needed to think about to being that's the mainstay. And you'll see another shift in the years to come where mobile will be the predominant portion of traffic that advertisers get. So there will be another round of thinking of how should campaigns reflect that structure.
Do you need to make any tweaks to the program? Have you made any tweaks to Enhanced Campaigns?
No, but these are questions that we actively think about. For example, if the volume that you get from mobile search queries is 75% of all your clicks and conversions, does it make sense to have desktop as the default? Active topics.