The relationship between advertisers and consumers has always been a contentious one. There have always been consumers trying to avoid advertising in its many forms, going so far as to strip out the advertising inserts from the Sunday newspaper, or recording television shows on DVRs in order to fast-forward through the commercials.
In the aggressive world of online advertising, consumers’ avoidance of ads has escalated from a cat-and-mouse game to all-out war. More and more consumers are using technology, in the form of ad-blocking software, to block ads and adware they find annoying, obnoxious and invasive.
eMarketer estimates more than 26% of U.S. Internet users currently employ an advertising blocker, and forecasts 32% of Internet users in the U.S. will do so next year. Given that eMarketer estimates there currently are 256 million Internet users in the U.S., that means over 66 million Americans using ad-blocking software today.
Annoyance and privacy are at the heart of consumer usage of ad blockers. According to the 2016 Digital News Report from the Reuters Institute for the Study of Journalism, when asked why they were using ad-blocking software, 68% of Americans said they were fed up with the volume and distracting nature of advertisements in general; 55% said they dislike ads that follow them from site to site.
Research by the Internet Advertising Bureau (IAB), a trade group representing the online advertising industry, indicates the ads considered to be most annoying were those that interrupt the user experience, such as interstitial Web pages, auto-play videos, and especially pop-up windows (not to mention ransomware found in ads).
One company coming to the rescue is Adblock Plus, owned and operated by Cologne, Germany-based Eyeo. Ben Williams, a spokesperson for Eyeo, says Adblock Plus can be found on 100 million active devices globally, and has whitelisted 700 publishers in its software.
Adblock Plus’ preloaded whitelist filter is turned on by default and allows only pre-approved ads to be presented; users can manually opt out if they wish to see no ads at all. The displayed ads meet the "acceptable ads" criteria of Adblock Plus, meaning they match size requirements and tracking provisions, and have been deemed not too annoying or intrusive.
To identify ads to block, Adblock Plus, like almost every other ad blocker, uses open source filter lists, which detect indicators in the code of a source such as a Web page or Facebook feed that identifies where the ads are, and then blocks them out.
In August, a fight broke out between Facebook, which derives over 95% of its revenues from advertising, and ad-blocking software companies, after Facebook announced it was taking measures to block the ad blockers. Within hours, a workaround was announced on the open source filter lists that thwarted the ad-blocking changes Facebook had deployed. In response, Facebook removed other ad indicators from its code, which was countered again and again with countermeasures from both sides.
"We have found a workaround against @facebook's workaround against the adblocker's workaround against @facebook's circumvention," wrote Adblock Plus senior manager Job Plas on Twitter, capturing the absurdity of the situation.
"We are at a point now where it is a standstill because Facebook ads in the feed are currently being shown, but almost all of the information that would alert someone to the fact it is an ad has been removed," says Williams. "At this point we need to change the Adblock Plus extension itself—the way the ad blocker works—it doesn’t involve a change in the open source community."
"It’s a tech arms race in which Facebook is in a better position than most to at least win some battles," adds Jason Kint, CEO of Digital Content Next (DCN), formerly the Online Publishers Association, a trade organization of digital publishers.
Content publishers have an immense vested interest, as the financial consequences of consumers blocking Internet ads are substantial. Juniper Research predicts digital content publishers could lose nearly $28 billion worldwide by 2020 due to ad blockers, with about a quarter of those losses—over $5.4 billion—sustained by publishers in the U.S. alone.
Adding to the eroding earnings of online publishing is the migration of consumers to apps and social media news feeds, instead of direct visits to the Web sites of digital publishers. This means ad revenue the publisher would have received is now being collected by a news aggregator. The result has been the concentration of digital advertising dollars being overwhelmingly channeled through Google and Facebook, making it even more difficult for online publishers to earn a living. One recent estimate surmised up to 85 cents of every new online advertising dollar was funneled through Google or Facebook in the first quarter of 2016.
"The duopoly of Facebook and Google needs to be supportive of the open Web if they plan to be a part of the solution," says DCN’s Kint. "There is work to do across the entire industry."
Digital content publishers have access to three basic weapons with which to respond to ad blocking.
First, they can appeal to readers to whitelist them in their ad-blocking software, so ads can be displayed and consumers can access the desired content.
Second, publishers can outright block users with ad-blocking software. For instance, in early 2016, WIRED said that on an average day more than 20% of readers were blocking ads on its site, so it would block those using ad-blocking software from entering its site. The Conde Nast publication offered two remedies for those using ad-blockers: add WIRED to their ad-blocking software’s whitelist of approved sites, or pay a $1/ week subscription fee to access a version of the site that is advertisement-free.
Other publishers denying site access to readers using ad-blockers include The Washington Post, which experimented with a pop-up box on its site encouraging users to become paying subscribers, and Forbes. This practice is likely to become more widespread, as the Internet Advertising Bureau provides publishers with ad-blocking detection scripts so they are able to serve up messaging, asking users to turn off their ad-blockers or white list the site.
The IAB has several other initiatives underway to help advertisers produce better ads. The LEAN (Light. Encrypted. Ad Choices Support. Non-invasive/Non-disruptive) Ads program was launched to educate publishers and advertisers about advertising choices, and the IAB recently introduced the Coalition for Better Ads, which includes Google and Facebook as members, to create standards for online advertisers to improve the consumer ad experience.
"It can’t be emphasized enough that the industry has spent billions of dollars on ad tech in the past decade with little regard for the consumers," says Kint. "This needs to change. Google, the IAB, and all ad tech companies are in a position to help here."
However, the industry’s track record at creating consumer-friendly ads is minimal, and there has been little reason for the industry to look beyond its own self-interest until the advent of ad-blocking software.
The third option available to online publishers to combat ad blockers is to partner with ad-blocking companies to be automatically whitelisted in the ad-blocking software, typically by paying a fee.
This is the model Adblock Plus follows, endeavoring to forge a middle way, and it has numerous large paying clients, including Google, Microsoft, and Taboola (self-described as "the world's leading content discovery platform").
However, this practice has customers and critics howling in protest, spewing vitriol that the business model equates to extortion. How can Adblock Plus claim to be blocking ads when it is accepting money from advertisers to display them?
"There are a lot of people who have mischaracterized the way acceptable ads work," responds Eyeo’s Williams. "What we are trying to do is controversial, and we own that. We are trying to let some ads through, and it is our way to monetize."
In September, Eyeo launched an online advertising marketplace, or ad exchange, called the "Acceptable Ads Platform." Advertisers can now more easily place "acceptable ads" that pass through the filters of Adblock Plus via an automated process that is almost instantaneous. Previously, advertisers had to be vetted and approved by Adblock Plus through a process that took about 10 working days.
The new Adblock Plus ad exchange represents an additional threat to online publishers because it makes it so much easier for advertisers to use Eyeo’s service, giving it the potential to scale exponentially. The prize is the coveted eyeballs of those who use ad blockers, as users of ad-blocking programs tend to skew younger, are better educated, and are obviously tech savvy, according to PageFair, which helps content publishers combat ad blocking.
Others in the industry disagree. "The real issue isn't about ad blocking, but whether consumers have a right to decide for themselves whether they want to be tracked, targeted, and profiled by ad-tech," says Roi Carthy, Chief Marketing Officer at Shine Technologies, a network-level provider of ad-blocking solutions for telcos.
Carthy believes the advertising industry will evolve to the point where commercial surveillance for the sake of monetization does not outweigh consumer choice. "In fact, that's the real opportunity here."
John Delaney is a freelance technology writer based in Brooklyn, NY
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