My father keeps full a handy sack of thoughtful maxims, and my childhood was filled with repeated phrases like, “You’ve got to go along to get along,” and “Choose your battles.” One was ingrained into my psyche at a very early age, and I find it continually relevant in the digital age: “There is no such thing as a free lunch.”
If you think the Internet is a complimentary lunch buffet, I got some bad news for you. I wince every time a digital thought leader makes a comment about the “free Internet.” The transaction between most Internet content providers and users is something I’ve always referred to as the “unspoken handshake” – users pay for their content consumption with personal data as well as by allowing advertisers the opportunity to reach them.
The use of ad blockers nullifies this agreement. With the growing concern over ad blockers’ effect on publisher revenue, highlighted by Apple leaving the door open to ad blocking in upcoming versions of Safari, this is probably the right moment to debate the handshake – truly formalize it and effectively kill the notion of the free Internet.
Ad blocking capability on Safari is the latest bit of bad news, following a German court ruling that the AdBlock Plus extension (made by Eyeo) is not “anti-competitive.” This was a big blow for the two prominent German publishers who brought the action as well as a worrying precedent for the entirety of Europe, where use of ad blockers is already rampant – Germany in particular records ad blocking extensions on 40% to 50% of browsers.
The numbers don’t look pretty in the U.S. either – 28% of users pack an ad blocker according to a 2014 Adobe-PageFair study (PDF), but use seems to vary based on content vertical. Gaming sites have long had high ad-blocking numbers, as more tech-inclined audiences have a higher propensity to use extensions. And guess what generation grew up with the Internet? Yup, 41% of Millennials are reportedly using ad blockers.
AdBlock Plus is the major player on the block, with 40-50 million active monthly users according to Eyeo communications and operations director Ben Williams. However, the product has seen stiff competition of late from upstart challenger Ublock, which is reportedly less reliant on user memory though pubs reports it blocks non-ad-related services like analytics.
If you’ve got the cash, you can pay AdBlock Plus to pass on through your ads like Google, Amazon and others have done in a scheme that pretty much amounts to blackmail: 30% of ad revenue gained by being on the company’s precious whitelist. And here you wondered how free software makes money!
It also makes me curious – why would users employ an ad-blocking extension that lets through ads? Well, AdBlock Plus actually offers a few levels of blocking: all ads or just “unacceptable” ads – you can read about those in the “Acceptable Ads Manifesto,” but they include ads that are “annoying,” “distort… page content” and other vague descriptions. (A source suggests that AdBlock Plus is currently backlogged with publisher inquests.)
Premium pubs are seeing varied numbers of blockers coming through, but it’s definitely on the rise and raising alarms as viewability and bot traffic are cutting into inventory.
But why the uptick in blockers now? Have ads grown more annoying? Well, a bit, with the proliferation of video – particularly auto-play video-in-display ads with sound on. (Coincidentally, Google is adding a program-pausing feature to Chrome that will basically kill such advertising – as well as Flash.) Content recommendation ads sport a lineup of sponsored content that’s barely removed from belly fat and one-strange-trick bullshit. And then consider that ad blockers are easy to install and tend to be a top extension in most browser marketplaces.
What’s more worrisome is mobile, where publishers have notably struggled with their revenue strategies, is the next frontier for ad blocking. AdBlock Plus recently launched a fully armored browser for Android. The mobile carriers themselves are interested in ad-blocking technology as Shine CMO Roi Carthy suggests units like popups and auto-play video can account for 10% to 50% of network traffic.
And then Apple announced that the upcoming version of Safari could support ad blocking. This is a real kick in the gut as publishers have especially struggled with the mobile web and, according to StatCounter, Safari accounts for 55% of mobile traffic.
Hey, you know what’s showing a lot of promise on mobile? Native ads and other in-feed units. In fact, at OPS two weeks ago I was quite impressed hearing about units that fit seamlessly into the mobile content array and can be transacted on programmatically. So increased native units should be a way to get around those pesky ad blockers, right?
Well, according to Monday Note, ad blockers have developed capabilities to detect units labeled as sponsored and stamp them out. In addition, AdBlock Plus has put the kibosh on content recommendation widgets.
There are services out there that have ways of evading ad blockers – interesting ones at that. PageFair can be used to measure ad blocking activity and then substitute blocked spots with affiliate ads. Publishers that build or employ third-party ad-block detectors can potentially switch in text ads when display units are blocked. Content-to-commerce solutions, which use affiliate linking, also escape the ad block knife.
Other products promise to straight up ignore or bypass ad blocking extension. That gets into seemingly murky territories – should publishers feel bad for subverting user wishes? I argue no, because ad-blocking users are effectively stealing content.
The Spoken Handshake
It’s always seemed curious to me that people just expect Internet content to be free – it probably has something to do with the intangible nature of digital media. I’m guilty of this mindset as well, as a few strongly worded letters from my old cable company will point out. (I swear I’ve turned over a new leaf… Now that I have HBO Now.)
In effect, this misconception of a free Internet devalues content, so content makers deliver low-value content. Theoretically the content behind paywalls should be better, but you’ll notice that most brands pushing paywalls (e.g., Wall Street Journal, New York Times) are well established. How are varied upstart and niche pubs supposed to drive enough traffic (and revenue) to insert a paywall?
But people are willing to pay for content, Gavin – look at the freakout among users when Netflix was simply testing ads (for its own shows, nonetheless – HBO Now shows pre-roll clips for HBO originals on its originals). An informal survey (of a whole 100 Netflix users!) from Exstreamist found 79% (or 79 people) said they’d rather pay more for the service than be subjected to (oh, the horror) advertising.
I’m going to lay a hard truth on you – people are whiners, people love to whine about advertising and people that fill out surveys tend to be the whiniest whiners on the whine-path. If Netflix raised its subscription rate to $30 tomorrow but said you could keep paying $10 if you occasionally had to view commercials, I bet more people would jump on the latter option.
Still, this is a prime time to test user willingness to pay cold, hard cash for content – hence Google’s Contributor gambit, offering reduced ad loads for a monthly fee. It’s an interesting subscription model, though completely experimental. Spotify and Pandora have proved freemium digital content models can work.
But the majority of digital publishers can drive a lot more revenue from ad dollars. Some sites are building off cookie warnings to first-time visitors and using pop-ups to ask for users to turn off their ad blockers because content is ad-supported. I think we all have a sinking feeling about how effective those pleas will be. Monday Note reports that Schibsted in Scandinavia is encouraging sites to shut the gates to browsers carrying with ad block extensions – I think all sites should follow its lead.
Blocking content could lose you segments of your audience – then again, you can’t monetize the audience you’re losing. Ad-blocking users may boost your traffic figures, but if you can’t actually serve them advertising, you’re not being honest to your clients about your reach.
No, for too long we’ve been silent about the unspoken handshake – the deal that users get content while pubs record data and offer advertisers their attention. Through ad blockers, (some) users haven’t kept up their end of the bargain, but most publishers also haven’t given them an alternate way to pay for the content they consume: money. Dollars, euros, pounds, yuans, etc.
I’ve long advocated for such a dual approach – offer site visitors the option to pay for content with advertising and data (and further I look to a day when consumers can truly take agency of transacting on their data), or ask them to pay in monies. If neither option appeals to them, refuse to show them content.
This is why the launch of Sourcepoint caught my attention: this new company from Ben Barokas is truly trying to bring the unspoken handshake upfront by prompting a user visiting a site to turn off their ad blocker or pay cash for an ad-free edition. I’ve been waiting a while to see such an offering and I imagine other providers will step up with such services in SourcePoint’s wake. At the same time, adoption of the spoken handshake will be wary because publishers will fear a consumer revolt, and how do you price that subscription?
Another Long Debate
The conversation about ad blockers will only get more intense over the coming months – I imagine our session at the Publisher Forum in Charleston will be quite heated. And hey, I hear the IAB is forming a committee! I bet you guys can’t wait for the deluge of panels and possibly whole conferences.
Still, don’t let your ad-blocking worries consume you because while recent news has brought the issue to the trade headlines, it hasn’t become a serious threat to premium publishers yet. You can prepare by learning about workarounds like PageFair, ClarityRay (recently acquired by Yahoo!) and AdDefend and the struggle is leading to a better Internet for all parties – yes, even users.
There is one immediate takeway for publishers – be smart about what kind of advertising you allow on your site. Quality assurance has never been so important, or difficult when it comes to programmatic. Basically, don’t be a part of the problem – eschew units that might irritate more users into joining the ad blocking mob.