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The Potential Impact of Google's New Interstitial Penalty


Google's August 23rd announcement outlining a new and upcoming penalty on mobile sites employing interstitial ads had everyone talking. Intuitively speaking, we all got the sense that this was big news. After all, how many of us at one point or another have wanted to throw the darn phone at a brick wall after trying to get past a mobile interstitial ad? Even if your frustration at bypassing interstitial ads has not been that extreme, it does almost feel like that it would be easier to steal gold from Fort Knox than it is to not only locate, but press the microscopic "X" which tells such ads it's time to vacate the mobile screen premises. That's really the point though. By the mere fact that most of us have had frustrating experiences with the ad form, it's safe to say that interstitial ads are not uncommon on mobile. If they were, would Google's announcement really be big news? But how common are the ads? How much revenue is generated by them and how much are people spending on employing the buggers? Put simply, how impactful is this upcoming penalty and how deep of a hit will this be to advertising income? 

Interstitial Ads on Mobile to be Penalized
Google's examples of intrusive interstitial ads on mobile 



The History of Google Interstitial Penalties



Before jumping into the impact that the January 2017 penalty on mobile interstitials may have on advertisers and the industry overall, getting a bit of context is important. The upcoming penalty is not the first on mobile interstitial ads by any means. In fact, there is a long, complicated, and somewhat muddied history of Google penalizing the ad format on mobile. Understanding it helps make a bit of sense of the recent progression of events and the context in which it falls. 

Interstitial Penalty on Ads Calling for App Download 



On July 23, 2015, just over a year before the recent announcement, Google published what it called a "case study" on interstitial ads relating to app downloads. Google essentially took an interstitial ad it produced calling for the download of the Google+ app and performed an analysis on its performance. To make a long story short, Google determined that the intrusiveness of the ad in fact turned people away from downloading the app. Google ended their "study" by saying, "...sharing this with the hope that you will reconsider the use of promotional interstitials. Let’s remove friction and make the mobile web more useful and usable!"  Then, on September 1, 2015 Google took "removing the friction" into its own hands and announced it would penalize mobile sites using interstitial ads aimed at garnering app downloads. This penalty went live on November 2, 2015, a day later than it was initially set to roll out. The 2015 penalty did raise the question of, why not penalize all mobile interstitial ads? A question, which for whatever reason had to wait until August 2016 to be answered

Yelp Interstitial for App Download
A mobile interstitial ad calls for the download of an app 


A Bit of Interstitial Controversy 



The penalty on interstitial ads related to app downloads was not easy for the industry to swallow, which is important to consider in context of the upcoming, and much broader interstitial penalty. In addition, Google's "case study" was seen by some as missing the point that websites value the increase in downloads of their app, obtained through the interstitials, much more than the happenstance mobile traffic they may be losing because of the annoying ad form. Some industry leaders, such as YELP CEO Justin Stoppelman, have been pretty vocal about the "fairness" of Google's 2015 app associated interstitial penalty. There is a lot at stake with interstitial ads, and obviously, like Transformers, there's more than meets the eye. 


Are Interstial Ads Spammy and How Annoying Are They Really? 

 

Why though are company CEOs, etc. up in arms about what has to be one of the most annoying and spam-like ad formats out there? To better understand where the backlash to the war on mobile interstitial ads comes from it would be prudent to first analyze our own conceptions of the ad format. To be perfectly honest, when Google announced that it would be penalizing mobile interstitials, my first reaction was "Yeah!" followed by "Why did this take you guys so long?". But as I began looking into the issue, seeing how upset some in the industry were, and who in fact has been using the format, I thought to myself, "well golly, if these ads are so prevalent and employed by real sites, then this penalty is going to be huge." So then, are interstitial ads inherently as spammy as we would like to think? 


Mobile Interstitial with Close Icon Hard to Locate

A
 mobile interstitial ad with a "close button" offset in an unexpected location 


Do Only Small, Sketchy Companies Use Interstitial Ads? 



Do you know why advertisers and sites (quality ones that is) use interstitial ads on mobile? Because there's such a limited amount of real estate, it's hard to get noticed. This is why quality sites such as Hulu use interstitials. This is why YELP uses them and why social media apps like Snapchat use them as well. For crying out loud, Twitter outright tells you how to develop one! Even TGI Fridays, the popular family restaurant, has launched an ad campaign employing interstitial ads, and what's not to like about a full screen ad imploring you to buy "slow-cooked, fall-off-the-bone tender baby back ribs!" 


Hulu Interactive Interstitial Ads
Major brands such as "Hulu" offer the ability to purchase mobile interstitial ads


Annoying, Any More Annoying Than Other Ads? 



In the specific case of mobile interstitial ads, a 2013 study published in the International Journal of Mobile Marketing asserted "Interstitial ads are more acceptable as compared to banner ads in the case of game-based apps. Therefore, mobile professionals can develop interstitial ads rather than banner ads."
In other words, there is, when employed correctly, a legitimacy in the desire and in the actual use of interstitial ads. I can see it now, you're sitting there scratching your head, everyone hates interstitial ads on mobile inherently, don't they? Actually, some supporters for the use of the ads say it's a matter of functionality.

In his 2015 Search Engine Land article Yelp CEO, Jeremy Stoppelman said, "Some interstitials perform poorly and can be hugely annoying to consumers, but they don’t have to be. Developers can strike a balance between providing useful content in an interstitial and promoting their app." A 2015 ClickZ article outlining problems with interstitial ads (among other formats) backhandedly corroborates this point. In discussing his frustration with interstitials the article's author Mike O'Brien says, "It was disruptive, but what made it exceptionally annoying was how I couldn’t figure out how to get rid of it." 

I know what you're thinking, "but even if I could find the darn X, they would still be disruptive." That's true, no doubt. However, the question of ad disruption is not a new one. In fact, way back in 2002 a study out of the University of Michigan, on how disruptive ads actually are, found that digital pop-up ads are about as annoying and disruptive as TV commercials.  I don't see anyone complaining all day long about TV commercials, do you? They're like that guy driving too slow that you can't manage to pass, an annoying part of life we all have to swallow. 


Do Interstitial Ads Have Official Sanction?



To bolster the legitimate use of mobile interstitial ads, both the IAB (Interactive Advertising Bureau) and the MMA (Mobile Marketing Association) include the use of interstitial ads within their official guidelines. The MMA in fact, when discussing mobile application interstitial ads, lists guidelines similar to what YELP's CEO mentioned, "At any time the interstitial ad is displayed in full, the user should be able to click to continue past the ad into the content. A preliminary recommendation for interstitial ad display time is that the units disappear after a maximum of 5 seconds." Abiding by the a priori notion that interstitial ads are inherently intrusive would make such guidelines an absurdity. 


Legitimate Sites Use Mobile Interstitial Format
Legitimate, non-spammy sites, such as Fandago, regularly employ mobile interstitial ads



What Legitimacy Adds to the Interstitial Ad Penalty Equation 



Why am I telling you all of this? Think about pharmaceuticals for a moment. Say the FDA or some other government agency wanted to ban a certain drug that was already considered to be unsafe and hazardous. The practical impact of such a move would seemingly be minimal. Now imagine that the same governmental agency wanted to ban paracetamol, the active ingredient in a drug widely considered to be a legitimate pharmaceutical, Tylenol. What would the practical impact of banning paracetamol be when compared to banning something already perceived as dangerous? If the mobile marketing industry views interstitial ads as a legitimate form of mobile advertising, Google's upcoming penalty will be far more impactful than if the industry viewed the ad format much as the everyday person does – as spam. 



Mobile Interstitial Ad Performance 



Keeping in mind the fact that interstitials do have a place on the mobile web, it's pertinent to understand how they perform. A mobile marketing technique is only as big as its performance, so how then do mobile interstitials stack up? Just how big and how powerful are these ads and just how significant would a Google penalty on them be? Is Google about to penalize an under-performing peon or are they going after a golden Goliath?

Video Interstitial Performance on Mobile 



Delving into mobile interstitial ad performance, we start to get into the real meat of the data analysis. Surprisingly enough, the data is not terrible, not terrible at all. Interstitials are of course a common form of ad on mobile, in fact the MMA indicated in a 2014 report that 17% of all mobile ad video impressions could be chalked up to interstitials, making it the second most impactful form of video advertising on mobile. The report also showed that non-skippable interstitial video ads had the second highest CTR when compared to other forms of video ads on mobile. Again, this is just video interstitial ads, there are still other forms of interactive interstitial ads 

The Engagement Rate of Mobile Interstitial Ads 



Like video interstitial ads, engagement rates are where the ad format puts up impressive numbers. A 2015 IAB study conducted with the ad trafficking and tracking firm Celtra, showed that mobile interstitial ads not only had a high viewability percentage (just 2% lower than banner ads), but were the ad format with the highest rate of ad engagement (the study measured performance for Q3 in 2015). Interestingly, the study also showed that the ad format had the highest user-initiated video play rate as well.

What really caught my eye was the ad engagement rate on mobile web browsers versus that within apps. Interstitials have long been thought of as the ideal format for in-app advertising. However, the 2015 IAB study showed that in-app interstitials had a leading ad engagement rate of 2.4%, more than any other format. Not bad, but not as good as its mobile web counterpart which had a whopping 5.1% ad-engagement rate, a rate which was four times greater than that of the next highest performing ad format. Thus, the age of interstitial ads has spread past apps and has come to dominate engagement on the mobile web. 

The tale of mobile interstitial ad engagement has only continued. In Celtra's Q1 report for 2016, the ad engagement rate for interstitials was about 2% higher than the next best performing ad format (the study included desktop as well, but desktop only comprised 5% of results). 


Pandora.com Mobile Interstitial Ad
Mobile interstitial ads present large content that results in higher engagement rates 


A High Performance Ad Format 



Beyond the bore of numbers and percentages, my point here is simple. Google is not about to effectively call for the removal of an ad format that is basically an underachiever anyway. Interstitial ads are prevalent, and they are prevalent because despite how annoying we may find them, they do garner engagement and "click throughs." Thus, the impact of removing a high performing ad format is significant. Having now established that, yes, a penalty on mobile interstitials is significant, it behooves us to ask, just how significant? 


The Financial Impact of Google's Penalty on Interstitial Ads

 

Getting to an exact number of how much is spent on mobile interstitial ads is not exactly simple. First off, the IAB lumps the ad format within its "Rich Media" category. What percentage of Rich Media is comprised of interstitial ads? The IAB doesn't tell you. There's no neon sign blinking somewhere that says what percent of rich media ads are interstitials (and how weird would it be if there were such a sign?). Not getting into all of the complications of how I arrived at how much was spent on this "intrusive" ad format, I'm just going to throw the number out there.... 5.59 billion dollars globally.

(See how I arrived at the 5.59 billion dollar figure.)


What the Numbers Tell Us 



Numbers don't lie, they only tell half-truths at times. To use mafia terminology "the interstitial business" is worth billions of dollars. It's also a business that has the arrow of Google aimed right at its heart. So how big of a deal is Google's upcoming intrusive interstitial ad penalty? It's about as big of a deal as 5.59 billion dollars would be to Tony Soprano. So unless you're a Gandhi-like persona, and you've given up on the material life, an interstitial penalty could have the potential to really shake things up a bit. 

Mobile sites, such as AOL, who offer  ads like the above may lose significant ad revenue with the upcoming penalty




The Future of the Mobile Advertising Industry and of Interstitial Ads 

 

It's clear that the impact of Google's upcoming interstitial penalty is going to be pervasive. It's going to touch a lot of people in the one place no one wants to be touched... their pocketbooks (get your mind out of the gutter!). The question is how will this play out? Will Google's penalty meet strong opposition? Will this be the first of many penalties on different ad formats, further impacting the industry? Will advertisers comply with the penalty?  

Penalizing the interstitial ad brings Google into complicated territory as digital marketing expert Mordecai Holtz, and Co-Founder of Blue Thread Marketing, points out, "Google is saying that the user wants the information, and the optimal experience." But what happens when the two don't meet? What if great and undeniably useful content is covered by an intrusive interstitial ad? I don't want the ad, but I do want the content. Google may need to be careful just how much of a ranking loss it will impose on mobile sites carrying the interstitial. That's not to say Google can't pull this off correctly, it's just a bit tricky, as Holtz further notes, "... there is a fine line between just issuing a penalty and learning how to play the game without being the good or bad cop. The gray area is where success happens." 

Sites Need to Walk a Fine Line as Well 



On the other hand, websites themselves will need to be careful with their interstitials. A penalty that results in a loss in rank is obviously a significant concern for a site. Though, as noted above, mobile interstitial ads offer a site a significant amount of income, income that people are clearly not going to be happy to part with. Ultimately speaking, a middle ground will need to be found as Holtz pointed out in my discussion with him, "People are going to learn how to either bypass the rules or learn to play within the rules." 


Technical Workarounds: Bypassing Google's Interstitial Ad Penalty 



The idea of "bypassing" the rules has precedent when it comes to interstitial ads. Predicting the future here does ironically have a bit of a history considering that Google has already penalized certain forms of mobile interstitial ads, i.e. those related to "app download." From a technical point of view, there were a variety of bypasses implemented to get around the then new Google penalty. Ironically, one of the strategies that emerged after the 2015 penalty on app associated interstitials came from Google themselves. At the time, Google offered mobile users looking to download Google Docs what seemed to be an interstitial, but was actually the web page itself. 

Whatever tech tweaks catch on, I think you can be sure of one thing, the Google penalty won't be the end of full page ads on mobile. They may be few and far between (although based on spending numbers probably not much fewer and further between), from a technical standpoint, they may not be interstitial, they will most likely not be as intrusive, but they will be there... somehow, people are literally betting a lot of bottom dollars on it.  


Google and the Great Ad Debate 



A final point to consider is that all of this talk about interstitials, its penalties, its performance, its revenues and so forth, while presented by Google within the vacuum of intrusiveness, is actually a small part of a much bigger ad picture Google is currently dealing with. As ad blocking only builds more and more momentum, Google is left with the task of working towards creating online ad balance and harmony. In fact, it was quite recently that AdBlock Plus rolled-out a platform making it easier for its publishers to get an ad white listed as part of the Acceptable Ads Program, which aims at allowing non-intrusive ads to show, while blocking those considered to be intrusive.

Animals Butting Heads

This non-intrusive ad culture is very important to Google. So long as ads remain intrusive, ad blocking technology will continue to soar, threatening Google's ad revenue. Google penalizing mobile interstitials, while being presented as a way to keep users happy so that they continue to engage with Google as a search engine, might really be more about keeping users happy so that advertisers can continue to engage with the search engine without the threat of ad block. Ironically, in such a context, Google penalizing advertisers is in a sense a backhanded way to save the digital marketing industry from ad blocking technology, and in the process its bankroll. If correct, the penalty on mobile interstitial ads could be just one of many advertising shakeups Google has planned in store for the industry in the near, and even not so near future. Will Google ultimately be successful in making the digital ad ecosystem non-intrusive without stepping over any lines? You tell me... 

About The Author
​Mordy is the CMO of Rank Ranger as well as the host of The In Search SEO Podcast. Despite his numerous and far-reaching marketing duties, Mordy still considers himself an SEO educator first and foremost. That's why you’ll find him ​regularly releasing all sorts of original SEO research and analysis!




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