Reasons for ad-avoidance and its effect on website publishers

Table of Contents

List of Figures

List of Abbreviations

1 Introduction

2 Background
2.1 Consumer attitudes towards advertisements
2.1.1 Influencing factors on ad-acceptance
2.1.2 Influencing factors on ad-avoidance
2.1.3 Ad-avoidance techniques of consumers
2.2 Ad-blockers
2.2.1 Reasons to use ad-blockers
2.2.2 Consequences and impacts of ad-blockers
2.2.3 Reactions to ad-blockers by content publishers
2.3 Acceptable ads: a redefinition of the online advertisement model

3 Discussion
3.1 Influencing factors on ad-avoidance
3.2 The impact of ad-blockers
3.3 Alternatives to ad-generated revenues
3.3.1 The importance of content quality
3.3.2 Bundling as a profitable strategy

4 Conclusion and Implications

5 Limitations

References

List of Figures

Figure 1: Acceptable ads criteria

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

As early as 1948, the American Marketing Association defined advertising as “any paid form of non-personal presentation and promotion of ideas, goods or services by an iden­tified sponsor”. To approach the audience, advertisers buy time or space in different forms of the media such as the radio, television, newspapers, magazines, and the internet (Jaishri and Shruti 2006). While advertisements form an integral part of conventional media, the development of the internet provides a new platform for communication. Since 1994, websites have been selling media space to advertisers, which helped the financing of website content production by placing advertisements (ads) online (Evans 2009). Es­pecially publishers of online content, printed or online newspapers, magazines and online journals, referred to as publishers in the following, finance content online mostly with means of advertising.

However, understanding the potential to reach the majority of consumers through online marketing, advertisers flooded the web, hoping to increase advertising revenues online. As a result, the quantity of advertisements on websites has been growing drastically. Pu­jol, Hohlfeld and Feldmann (2015) report that users tend to feel disrupted and annoyed, particularly when advertising is considered to be disturbing or very penetrant. With the increasing prevalence of online advertisements, the demand for internet browser plugins that prevent the distribution of online advertisements, so-called ad-blockers, has grown continuously among web users in the past years. By 2018, already 600 million devices with ad-blockers existed worldwide (Scott 2017). This means that approx. 50 % of all internet users have ad-blockers installed, and the numbers are constantly increasing (PageFair 2017).

The ad-blocker software can be downloaded by consumers and aims to reduce and filter the advertisements that users are exposed to by blocking ad requests on websites (Kamps and Schetter 2018). Within this process of ad-blocking the website's layout and content do not change (Internet Advertising Bureau [IAB] 2015).

The first ad-blocker mass product called AdMunchner was able to identify web page im­ages of a specific size and code and consequently prevent them from being shown. It was pre-installed on a windows device and was able to block images in all applications (Kudryavtseva 2017). In 2002, Henrik Aasted S0rensen from Copenhagen developed a more efficient extension called AdBlock, which filtered ads based on the web address of the image and was the first widely used ad-block extension (O'Reilly 2015). By 2006, AdBlock Plus, a free web browser extension, was developed by the German company eyeo GmbH. It is a well-established software that allows users to individually create filter lists for ads (IAB 2015).

Ad-blockers intend to protect user interests and ensure that web surfers are not distracted by dominant ads. However, they also have the potential to essentially change one of the core elements on which the web is built - free content, financed by the online advertising industry (Pujol, Hohlfeld and Feldmann 2015). The increasing use of ad-blocking soft­ware costs the advertising industry around 21.8 billion US-Dollars, with upward trends (PageFair 2015). Therefore, ad-blockers appear to provoke a conflict between publishers and users that has yet to be resolved.

This literature review summarises current research on general attitudes towards the pres­ence of advertisements in the media. It analyses reasons for and methods of ad-avoidance, focussing on ad-avoidance using ad-blockers on the internet. The detrimental effects of ad-blockers on website revenues and quality underline the ongoing conflict of interests between website publishers and ad-blockers. Furthermore, the thesis at hand summarises publishers' reactions to ad-blockers and provides an outlook on possible solutions to the conflict.

2 Background

2.1 Consumer attitudes towards advertisements

According to Pollay (1986) advertisements are an intellectual submission that are omni­present, almost inescapable and implanted into our minds, which is why ads are widely accepted. Media users do, nevertheless, complain about being exposed to advertising clut­ter, which may be defined as the presence of a large volume of advertisements (non­editorial content) in an editorial medium (Ha 1996). Consequently, clutter represents a consumer's feeling that advertising in a medium is excessive (Speck and Elliott 1997). If the number of ads exceeds the accepted level, users fear manipulation, which is why ad­vertisements are often subject to criticism (Pollay and Mittal 1993). Therefore, beside the factors that create acceptance for advertisements, reasons for which people actively avoid them have always been a matter of interest.

In the 21st century, the majority of people that are exposed to advertisements in the tradi­tional media also have access to the internet. The internet is considered to be a convergent medium for all other media and is used for task-performing purposes rather than solely as an entertainment medium (Cho and Cheon 2004). Anything, such as newspapers, TV shows or the radio, can be accessed online (Miller 1996), which bears potential for ad­vertisers to reach an even greater audience than before. While technological advances and digitalization allow for more personalized advertising and the targeting of customers, un­derstanding attitudes towards online advertisements and the reasons for ad-avoidance is of increasing importance (Anderson and Gans 2011).

2.1.1 Influencing factors on ad-acceptance

Attitudes towards advertising are multidimensional and influenced by several factors (Muehling 1987). On the one hand, the media user's individual predispositions for adver­tising may influence attitudes. On the other hand, attributes of the advertisement itself influence acceptance by its audience.

Consumers traditionally engage with media such as the TV, radio or social networks to relax, “kill time” or escape from worries (Barwise and Ehrenberg 1988). Therefore, a relevant aspect that increases the value and acceptance of advertisements is seen in the entertainment experience or hedonic pleasure that may also be generated by ads (Pollay and Mittal 1993). The ability of advertising to entertain may enhance the experience for consumers thereof (Alwitt and Prabhaker 1994) and consequently lead to a positive atti­tude towards the ad (Shimp and Preston 1981).

Some authors suggest that the mood of the viewer of an ad, defined as the consumer's affective state at the time of exposure to the ad stimulus, also influences the perception of an ad (MacKenzie and Lutz 1989). Apart from the user's emotional state before being exposed to advertisements, emotions created by ads generally influence ad-acceptance. A warm, positive, happy mood, for example, can be created with words like “love” or “care” or if the commercial is amusing (Aacker and Brozzone 1985). Similarly, ads that harmonize with the culture of the audience are more likely to be accepted. By representing a societies' core values and beliefs they contribute to the creation of positive consumer attitudes (Ducoffe 1996).

Moreover, the length of an ad is thought to have an impact on ad-acceptance. Siddarth and Chattopadhyay (1998) state that ads that are 15 seconds long are approximately 50% more effective than ads lasting 30 seconds, partly because they offer less time to be skipped. Consequently, those ads are likely to be more accepted and continue to be watched.

Audiences' perception of whether new, accurate and useful information about products or services is developed also influences the general attitude towards advertisements (Nor­ris 1984). If an ad shows low credibility, such as misleading, exaggerated or confusing content, ad-acceptance is lowered (Resnik and Stern 1977). Also, ads that provide limited purchase information are less valued (Shimp and Preston 1981). Therefore, according to Andrews (1989) ads should present products accurately, and any claims made of an ad should be truthful and believable in order to be approved.

Nonetheless, ad-acceptance is influenced by the relevance of the ad to the context in which it appears. Ads that adhere to the genre or theme of the program that precedes them, are more likely to be of interest to the viewer (Cannon 1982). High relevance to the TV­program being viewed, for example, increases the probability that the advertisement is accepted, actively watched and increases recall of the product, service or the ad itself (Elpers, Wedel and Pieters 2003). In contrast, if an ad is considered to have low relevance and if information about a product appears superfluous, it incurs negative attitudes and may lead to ad-avoidance (Bracket and Carr 2001).

Advertisements may also provoke a positive or neutral reaction without having to be con­sciously appreciated (Duff and Faber 2011). The reaction is described as a mere exposure effect, which predicts that a particular stimulus, even at a subconscious level, may result in an enhanced attitude toward the stimulating object (Zajonc 1968). If advertisements are seen but not explicitly processed, as it is the case with billboards, brand logo place­ments and internet banner ads (Matthes, Schemer and Wirth 2007), the mere exposure leads to an increased positive effect due to recognition the next time the ad or the adver­tised product are encountered.

2.1.2 Influencing factors on ad-avoidance

Ad-avoidance can be defined as “all actions by media users that differentially reduce their exposure to content” (Speck and Elliott 1997, p. 3). The main reason for ad-avoid­ance seems to be the fact that advertisements are often considered irritating, annoying and disruptive. According to Aacker and Bruzzone (1985), irritation is the extent to which advertising causes displeasure and momentary impatience. The perception that interac­tions with the desired content are interrupted and distraction from the mediated content is created (e.g. commercial breaks when watching a movie) is a significant cause of ad- avoidance and also known as the perceived intrusiveness of an ad (Bauer and Greyser 1968). Intrusiveness occurs when consumers are interrupted by advertising practices and it triggers reactions against the ad. Consequently, it elicits both irritation and avoidance of advertisements (Li, Edwards and Lee 2002).

The greater the engagement with the content of the program, the greater is the perceived interruption through advertisements. The disturbance is felt even more significant if the interruption occurs unexpectedly, such as a commercial break during a movie (Li, Ed­wards and Lee 2002). Those ads are considered annoying (Pollay 1986) and perceived as an unwanted, distractive and irritating influence (Ducoffe 1996). Irritation is increased if a situation in an ad is unrealistic or overdramatized, or if an uncomfortable tension is created by the ad (Aacker and Bruzzone 1985). Moreover, the perception of intrusiveness of an ad depends on the reason for using a medium and is particularly strong when a media user has limited time to accomplish a task, as ads delay the completion thereof (Rejon-Guardia and Martmez-Lopez 2014). Similarly, ads that are not related to the con­text in which they appear are considered more intrusive (Li, Edwards and Lee 2002).

In the same way, online ads are considered to be more annoying, disruptive and intrusive than ads in the traditional media, because users are considered to be more engaged with the content on the web (Goldfarb and Tucker 2011). Cho and Cheon (2004) suggest that users consider the internet a tool for completing tasks (research or purchasing). This higher concentration on the use of the medium leads to a stronger perception of disturb­ance and intrusiveness by sudden interruptions, which may result in undesirable outcomes such as aggravation, and consequently ad-avoidance (Krugman 1983).

The unexpected appearance of pop-up ads, for example, creates a feeling of intrusiveness especially when users consider advertising messages to interfere with their motivation for visiting a specific website (Edwards, Li and Lee 2002). As a result, apart from hindering users from consuming the intended content, annoying ads are also perceived to reduce reputability and stability of a website (Goldstein, Mcafee and Suri 2013).

TV-viewers are often annoyed when commercial breaks occur too frequently, also re­ferred to as ad-clutter, and consequently avoid exposure to advertisements (Siddarth and Chattopadhyay 1998). Along with that, web users complain about ad-clutter, such com­plaint often being subjective and influenced by different factors (Ha and McCann 2008). Currently, one finds an overload, particularly of online ads, with too many brands within the same medium competing for the consumers' attention. This leads to a decrease in attention that may be paid to each ad, reducing an ad's efficacy. It also results in a de­crease in value of the ad and an increasingly negative attitude towards advertisements in general (Bogart 1985). Such an overload may lead to the consumer feeling manipulated by advertisements, resulting in avoidance of the ad (Cho and Cheon 2004).

Understanding the purpose and intention of an ad increases trends towards ad-avoidance, as media users attempt to withdraw themselves from exposure to manipulation (Campbell 1995). Persuasion knowledge is the consumers' recognition and understanding that a spe­cific ad intends to persuade, which leads to increasing scepticism towards advertisements in general (Friestad and Wright 1994). If persuasive intentions are recognised and con­sidered to be dominant and intrusive, ad-avoidance is enhanced (Obermiller, Spangen­berg and MacLachlan 2005). This phenomenon is supported by the psychological reac­tance theory, which implies that users attempt to restore intellectual freedom and control over a situation by resisting the intrusive element and by evading ads that are forced upon them (Brehm 1966). Therefore, resistance to an advertisement is increased if it is per­ceived as intending to direct or control one's choices. Similarly, consumers are found to react negatively towards ads when they are denied the liberty to view the originally in­tended content (Baeck and Morimoto 2012).

Security and privacy concerns are another reason for scepticism towards online adver­tisements. Some ads contain viruses and consumers are afraid of allowing access to these so-called malvertisements. Also, tracking of online behaviour through the use of cookies threatens privacy (eyeo GmbH 2018). Users perceive this as an invasion to privacy and personalized advertisements thus provoke feelings of being observed. Consequently, the targeting of ads to a specific audience enhances viewers' perceptions of intrusiveness (Edwards, Li and Lee 2002). Van Noort, Kerkhof and Fennis (2008) conclude that in­creased privacy concerns increase consumers to focus on prevention against possible threats to security. As a result, many factors have negative influences on user attitudes towards ads and ultimately lead to an increase in ad-avoidance.

2.1.3 Ad-avoidance techniques of consumers

A demographic analysis of people ignoring ads states that the desire for ad-avoidance increases with income and education and it is more prevalent around male and young, affluent consumers (Bracket and Carr 2001).

Some users avoid ads in general, not just because of their content, and employ several techniques in order to do so (Cronin and Mennelly 1992). TV viewers can avoid exposure to commercial breaks through cognitive, behavioural and mechanical means (Speck and Elliott 1968). Cognitive avoidance is marked by ignoring the ad actively, by removing it from attention, e.g. by focusing on something else, or talking to another person (Clancey 1994). Leaving the TV room during commercial breaks or turning the page of a newspa­per or magazine are behavioural avoidance strategies. Switching TV channels during commercial breaks (known as zapping) is a mechanical avoidance strategy. It involves the active decision of a user to avoid exposure to advertisements by moving to another channel or program (Kaplan 1985) and is influenced by the perceived value of the com­mercial, as well as alternatives (Schumann, Petty and Clemons 1990).

New avoidance techniques for TV viewers were developed with the help of ad-avoidance technologies such as Video Cassette Recording systems that delete commercial breaks while recording TV programs for later viewing (Anderson and Gans 2011). This mechan­ical avoidance strategy, known as zipping, allows intentional ignoring of commercials (Cronin and Menelly 1992). The digital video recorder TiVo, for example, made it pos­sible to zip advertisements by clicking a fast-forward button and to skip over commercial breaks (Speck and Elliott 1997). Consumers often engage in block zipping, which entails skipping over several ads at once (Siddarth and Chattopadhyay 1998).

Similarly, several strategies for avoiding online ads are observed. Banners and pop-up ads are ignored and actively avoided by scrolling down or by closing the pop-up ad (Cho and Cheon 2004). “Banner blindness” describes the phenomenon that users tend to avoid focussing their eyes on anything resembling a banner ad. This progressive reduction of attention to ads results in a lower Click Through Rate (CTR) on websites (Benway 1998). The CTR summarises the number of clicks on a particular advertisement compared to the number of total ads displayed (Gupta and Pal 2018). It is used to analyse the degree of ad-acceptance and consequently, the effectiveness of an online advertising campaign. Although online ads can be avoided using cognitive and behavioural strategies, the most prevalent form of ad-avoidance used on the internet is the installation of ad-blockers. Web users are increasingly reducing their exposure to online advertisements by using these plugins (Anderson and Gans 2011).

2.2 Ad-blockers

With continuing technological improvements, several methods for avoiding an overload of online advertisements have been developed (Alwitt and Prabhaker 1994). An acknowl­edged solution to reduce exposure to ads on the internet is the installation of ad-blockers. Currently, multiple ad-blocking technologies exist; however, the most common approach is the installation of web browser extensions (Gervais et al. 2017).

Pujol, Hohlfeld and Feldmann (2015) define that the ad-blocking plug-ins are driven by one or more lists that set up rules to identify the content to be blocked (blacklist) or to be allowed being displayed (whitelist). Mostly, those filter lists are part of the ad-blocker software, and they can be extended by the users individually (Wills and Uzonoglu 2016). In order to be put on a whitelist and consequently be displayed, ads need to be submitted for approval. O'Reilly (2017) explains that some ad-blockers offer the ad-verification service for free, while others charge a fee for ad approval.

2.2.1 Reasons to use ad-blockers

The reasons for which internet users install ad-blockers are variable. Mainly, the aim is to reduce distractions and interruptions caused by advertisements. This is of significant importance for those users who wish to accomplish a task in a limited amount of time. Ad-blockers are used to inhibit targeted ads (Goldfarb and Tucker 2011) and to restore a sense of privacy while surfing the internet. Furthermore, they are downloaded to increase security by preventing “malvertisements” from accessing the computer (PageFair 2017). In addition, ad-blockers reduce data use and increase the loading speed of websites. Kamps and Schetter (2018) conclude this to be a predominant reason for ad-blockers use on mobile phones, as roaming is often limited. Therefore, ad-blockers are not only in­stalled to increase user experience, security and data privacy but also to reduce use of data (eyeo GmbH 2018).

2.2.2 Consequences and impacts of ad-blockers

However beneficial ad-blockers may appear to the individual web surfer, their increasing use has several detrimental effects on the future of website sustainability. Publishers sell website space to advertisers to monetize content and receive payments depending on how many users are attracted and reached by the ad (Lambrecht et al. 2014). A reduction of online ad display leads to a reduction in ad-generated profits for publishers. Thus, the revenues generated by online advertising are reduced, which incurs serious economic costs (Pujol, Hohlfeld and Feldmann 2015). Several reports show that the monetary im­pact of increasing ad-blocker use is significant. The cost of ad-blocking worldwide has risen from 7.2 billion US-Dollars in 2013 to 41.4 billion US-Dollars in 2016 and losses due to ad-blockers are rising continuously (Statista 2018).

Apart from the financial impact caused by ad-blockers, they also affect website quality. Fisher (2010) states that reduced website revenues lead to employees being discharged. A decrease in personnel resources results in fewer updates of content, which unambigu­ously may affect the quality of a website. Therefore, while fewer distractions through online ads lead to users spending more time on a website, website demand is increased although financial shortcomings hinder investments into website content.

However, a decrease in website quality lowers the amount of website visitors in the long­term (Shiller, Waldfogel and Ryan 2017). The detrimental effect that ad-blockers may have on the sustainability of websites is evident. The presence of ad-blockers leads to a decrease in revenues generated by affected websites. Consequently, in order to retain in­come and keep advertising turnover rates constant, websites increase the number of ads presented to users who have not installed ad-blocking technologies (Anderson and Gans 2011). However, an overload of ads sends the message that a website lacks stability or safety and may, as a counter-reaction, encourage even more users to install ad-blockers perpetuating a vicious cycle (Goldstein, Suri and Mcafee 2014).

2.2.3 Reactions to ad-blockers by content publishers

Display advertising is the primary source of income for publishers who receive payments from advertisers for placing ads on their websites (Goldstein, Mcafee and Suri 2013).

[...]