Visits to online news sources have surged in recent weeks with millions across the globe seeking updates on COVID-19. At the same time, media outlets have been warning of the financial problems they face from falling online advertising revenue during the pandemic.
On the face of it this appears to be a strange phenomenon. High readership would normally be expected to result in online advertising space going for a premium but instead demand, and therefore revenues, are falling.
One of the reasons for this fall is the operation of ‘blocklisting’ – a practice used for reasons of brand protection and transparent funding on the web. Whilst blocklisting is not new, the current pandemic appears to be showcasing the potential negative consequences of the practice and is having a damaging effect on news publishers at a time when they are being relied on more than ever for important public health messaging.
The COVID-19 Effect
At the time of writing approximately 20% of the world’s population are living and working under some form of lockdown or stay-at-home order. As people adapt to their new routines online news publishers are seeing huge rises in the number of people visiting their sites for updates, guidance, distraction and support. This has been particularly stark for the traditional outlets, including the BBC, The Guardian and The New York Times.
A decline in advertising revenue, on the face of it, therefore seems to be a strange phenomenon. Advertisers are vying for the largest possible audiences and publishers could reasonably have expected to be inundated with offers. Not only should online advertising space be oversubscribed, but spaces should be going for a premium.
The reason that we are seeing the inverse is due, in part, to the operation of blocklisting. This practice, which sees advertisers list keywords that, if they appear in the article to be published online, will disqualify their advert from appearing, is supressing the demand side of the equation. Advertisers want the audience, but not when that audience sees their carefully curated brand sitting next to stories of disease, economic turmoil and death.
When one issue dominates the news as COVID-19 has over the past few months, blocklisting can quickly cause advertising revenues to plummet.
The practice of blocklisting has a dual function. The first is an attempt to ensure that advertisers are not inadvertently funding illegal or harmful actors online. This issue has been highlighted before, most prominently via a front page splash in The Times in 2017. This article showed adverts for top-end cars sitting alongside terrorist content and noted that part of the fee would have been paid to the host of this content. In this way, big brands were at risk of inadvertently funding terrorist groups, conspiracy theorists and other illegal or unpleasant actors.
The second function is to protect the brand’s image and ensure that the advertising is as effective as possible. Modern advertising is highly sophisticated and is an attempt to carefully curate entire cultures or emotions around a brand. Protecting this image is a key concern and ensuring that it does not appear alongside certain types of content is necessary in order to offer this protection. Even where the accompanying content is not harmful, it may still undermine or detract from the content of the advert and therefore make it less effective.
It is important to appreciate that a majority of online adverts are now the result of programmatic advertising. These are algorithmic based programmes that seek out advertising space, bid for them in an auction-style process and then display the required advertising automatically. The program will generally then aim to collect as much useful data on the viewers of that advert as possible in order to intelligently refine the process for the next round of bidding.
Blocklisting is embedded in this programmatic process and can therefore initiate an automatic response to the content of the news. The inclusion of COVID-19 and other related terms on blocklists means that fewer bids are made on advertising on these pages, causing the advertising space to be sold for a cheaper price.
This is not a phenomenon that is unique to COVID-19 but the sheer domination of the story has demonstrated the effects of blocklisting in a way that no other news event has done previously.
The impact on news outlets – a prompt for Government regulation?
The Government has been concerned about the relationship between news outlets and advertising for some time and the issue formed a core part of the 2019 Cairncross Review, which we reported on here.
That looked predominantly at what it termed ‘public interest’ news and the requirement to support editorially high-quality content accessible to all. One of its key findings was that programmatic advertising creates a market that is “complex and opaque” with “a lack of transparency across the advertising supply chain“.
In response, the Government has launched a Call for Evidence to help it consider how online advertising is regulated. The deadline for submissions has recently been extended to 4 May 2020. This is being supplemented by a number of additional reviews which include:
- A study into Online Platforms and the Digital Advertising Market in the UK being undertaken by the Competition and Markets Authority;
- A review into Bias in Algorithmic Decision Making being undertaken by the Centre for Data Ethics and Innovation; and
- A review into Adtech and Real Time Bidding being undertaken by the Information Commissioners Office.
With the Government currently leaning heavily on the established news outlets to report on the important public health guidance that is being issued and updated daily, the damaging effects felt by these news publishers may be the prompt to implement measures to regulate the relationship between news and advertising.