By Robert Chatwani
Here’s a stark reality: ad blocking is not a passing fad.
In the second quarter of this year, there were 45 million people in the U.S. using an ad blocker, according to a widely circulated study from PageFair and Adobe. That is clearly no small niche community. Given Apple’s recent move to make ad-blocking software accessible on iPhones for the first time, consumer adoption of tools that prevent marketing messages from appearing on web pages is bound to keep gaining momentum, and it threatens the livelihood of any business that’s reliant on digital advertising.
While the threat to publishers has gotten a great deal of attention, they’re by no means the only ones with something at stake here. For online influencers like YouTube creators and Twitch streamers who can generate much of their income from revenue share through display and video advertising, the situation is serious — all the more so because their viewership tends to over-index among millennials and people who are tech-savvy. A study from comScore revealed that people who use ad blockers are more likely to be the types of high-value consumers marketers aim to reach: young and well off. Additionally, the challenge is more pronounced given the role of ad-blockers on mobile devices, which publishers are already having difficulty monetizing relative to web traffic.
The bottom line is that any business that relies solely on digital advertising should start diversifying their revenue stream as soon as possible, since there’s no telling how far the ad-blocking movement will go. That includes the YouTube creator who has amassed a sizable following by posting makeup tutorials, the popular Twitch streamer and, of course, the major news publisher.
It’s obviously alarmist to suggest that online advertising, a $60 billion a year business in the U.S. alone, will go up in smoke in the coming years. But for a social media influencer who has a comfortable five-figure income that’s mostly underwritten by ads, even a modest 20 to 25 percent decrease in ad revenue could change their financial outlook, and that outcome is looking increasingly probable.
So then the question is, how do you move from playing defense to offense when it comes to monetizing your traffic and your audience?
Here are three things that online influencers and publishers can do now to stem the tide of declining ad revenues.
Incorporating advertisers’ products or services into your content is a lucrative business, and there’s no way ad blockers can interfere with it. Of course, you should do yourself a favor and make sure that the integration aligns with the tone of your programming so as not to alienate your audience. The most successful partnerships are seamless because it makes sense for the content producers to use or talk about the sponsored products.
Start a commerce play
Merchandise your own brand and sell apparel and unique products.Your fans and followers like your content — give them a tangible way to show off that affinity via goods like T-shirts, stickers and phone cases. The concert tour shirt is a great example of how people express their entertainment passions via merchandise, and web-based services that no longer require upfront inventory commitments are a great way for web celebs to tap into this revenue opportunity with no financial risk.
For example, popular YouTube channel Fitness Blender launched a limited-edition T-shirt through our company Teespring, selling nearly 1,500 shirts directly to fans and followers, while sketch comedy YouTube channel Studio C used Teespring to sell over 3,000 t-shirts to fans of its faux soccer team series. In both of these cases, the sale of a single product generated tens of thousands of dollars in less than one week. You can also use Facebook ads — still largely unblockable on the iOS app — to market your products to potential buyers and target prospective customers based on their interests and affinities.
Clearly this concept is gaining traction in the industry. Vessel, the subscription-oriented digital video startup, has raised more than $134 million to develop its service. YouTube has already announced plans for an ad-free subscription service, and if you’re a Twitch broadcaster with a sizable following, you can enable channel subscriptions, which let viewers pay a monthly fee to access “special perks” like exclusion from slow mode and access to subscriber-only chats.
In the future, if digital currencies like Bitcoin get a lot more uptake than they have now, it’s possible that the promise of micro-transactions will finally come to fruition, meaning that people would pay some modest amount, perhaps only a couple of cents per view, to access content. For publishers and influencers with considerable scale, this would be a promising business model to upend the ad paradigm.
But, for now, brand integrations, commerce and subscriptions are a good place to begin.
Robert Chatwani is chief revenue & marketing officer for Teespring, an e-commerce platform that enables individuals to design and sell custom t-shirts with no start-up costs. Previously, he spent more than 12 years at eBay, where he most recently served as chief marketing officer and was responsible for driving buyer and seller growth for all aspects of its marketplace business, including brand and online marketing.