Is a truce possible in the ad-blocking war?
- 03 May, 2016 01:22
The online advertising world is a war zone – increasingly bandwidth-intensive, intrusive ads are countered by the exploding use of ad-blocking technology, which in turn is countered by increasingly aggressive anti-ad-blocking technology.
But amid what looks like an arms race, at least some in the industry are arguing that something close to a win-win is possible: A settlement that would lead to users being willing to tolerate – perhaps even look at – ads that are much less annoying, intrusive and data-consumptive than they are now.
Not that it sounds like any kind of truce is pending soon. As Fast Company put it this past January, which marked the 10th anniversary of AdBlock Plus, a browser plug-in that has been downloaded more than 500 million times, “after a decade hoping that ad blocking would just go away, online publishers are starting to freak out.”
How much they have to freak out about is a matter of dispute. A study last year by Pagefair, a company that works with publishers to produce less intrusive ads, and Adobe, estimated annual revenue lost to ad blockers at $21.8 billion.
Critics immediately challenged that figure, contending that the study contained a “fundamental methodology error” that led to a “gross inflation” of actual losses.
Scott Meyer, CEO of Ghostery, a company that makes what it calls a “consumer privacy tool” that blocks targeted ads, said he thinks lost revenue is more in the range of $1 billion to $2 billion. “That number ($21.8 billion) is wildly overstated,” he said.
Beyond that, the Interactive Advertising Bureau (IAB) reported just this past week that, “U.S. digital advertising revenues reached an all-time high of $59.6 billion in 2015 … a 20% surge over the earlier record-breaking 2014 revenues of $49.5 billion – and … the sixth year in a row of double-digit growth for the industry.”
Still, some of the rhetoric surrounding the issue is more incendiary than that at a Donald Trump rally. The IAB, the trade organization for online ad companies, abruptly and without explanation canceled the registration of AdBlock Plus to its Annual Leadership Meeting in January.
In his keynote address at the meeting, IAB President Randall Rothenberg called AdBlock Plus "an unethical, immoral, mendacious coven of techie wannabes."
And he was just getting started. Instead of complaining about the money the ad industry was losing, he portrayed ad blockers as stealing freedom and choice from consumers.
“It has nothing to do with giving consumers control,” he said. “It has everything to do with lining the pockets of the for-profit, ad-blocking profiteers.
“They are the rich and self-righteous who want to tell everyone else what they can and cannot read and watch and hear. They are self-proclaimed libertarians whose liberty involves denying freedom to everyone else.”
He wasn’t the only one. Ben Barokas, CEO of Sourcepoint, a startup launched a year ago to help content sites track and defeat ad blocking, said at the conference that the attitude of ad blockers is, “we don’t give a (expletive). We’re going to continue our raping and pillaging of the content creators.”
There is even bad blood among those with different models for ad blocking. Meyer accuses AdBlock Plus of “extortion” because it unblocks or “whitelists” ads that meet what it calls its “Acceptable Ads” standard– in some cases for a price.
According to the AdBlock Plus website, it charges a “licensing fee” to the largest 10 percent of the companies whose ads qualify for its whitelisting service. That fee, it said, is “30 percent of the additional revenue created by whitelisting its acceptable ads.”
Meyer scoffed at that, arguing that, “they say 10 percent of the companies, but that’s 90 percent of the business.” He said the Ghostery business model doesn’t charge advertisers anything. It makes its money, he said, from a “data donation model” – users who agree to share their browsing data with Ghostery anonymously.
“We then package those data into a suite of solutions and sell them to companies that use them to make their sites cleaner, faster and safer,” he said.
Meyer also contended that AdBlock Plus is essentially a blunt instrument, blocking everything by default (except for whitelisted ads), while Ghostery doesn’t block anything, “until you configure it. It’s all in the hands of the consumer.”
Ben Williams, director of operations and communications at Eyeo GmbH, the company behind AdBlock Plus, called the accusations of “extortion” and the “profiteer” label, “slander, of course – talking points developed by a PR firm somewhere.”
He said the contention that AdBlock Plus doesn’t give consumers any control is dead wrong. He said they see ads that meet the “acceptable” criteria, but have the option to block them all if they wish.
“The thing is, most don’t – the opt-out rate is in the low single digits – which shows that we’re on the right path with the criteria we’ve developed with our users,” he said.
Yet another player in the ongoing conflict is the anti-ad-blocking industry, which includes companies like Sourcepoint. And a recent press release announced the merger of Adaptive Medias with AdSupply, which markets BlockIQ, “a technology that it claims detects and bypasses ad blockers, including industry leader AdBlock Plus.”
John B. Strong, chairman and CEO of Adaptive, and Justin Bunnell, CEO of AdSupply, in a joint statement to CSO, said consumers do have a choice – they can pay for ad-free content like that on HBO, or watch other sites, like CBS, for free because it is supported by ads.
It is essentially stealing from websites, they said, “to consume their products and then deny them payment. Would you not agree that streaming sites like Napster a decade ago were wrong to provide a way for consumers to cheat musicians out of their royalties? There is very little difference here.”
Rhetoric aside, the reality for the online ad industry is that many more than 500 million consumers (AdBlock Plus is not the only ad-blocker on the block) disagree with Rothenberg: They obviously view ad blocking as giving them freedom and choice, plus a measure of security, rather than robbing them of it.
Even some in the online publishing world agree, and say the ad industry is only getting what it deserves. Performance Pricings Holdings founder Ari Rosenberg wrote in Online Publishing Insider last fall that, “(When) consumer needs are paramount to those of the advertiser … consumers accept advertising” – what he called “an arranged marriage.”
The opposite is happening, he wrote. “The online display advertising industry is a catastrophic failure because the IAB has condoned and promoted publishing behavior that has led to this ad-blocking epidemic.
“Ad-blockers have given consumers a voice in the online ad world – and that voice is loud, it is clear and it is filled with venom.”
Consumers, he wrote, are fed up with targeted ads that make them feel like they are being stalked, with auto-play video ads, with large ads that slow the loading of pages and especially allowing the purchase of ads through exchanges, “so our computers get infected with malware.”
It doesn’t sound like there is much room for agreement. But, apparently there is.
Even Rothenberg, after he got through trashing “ad-blocking profiteers,” acknowledged that they had, “done this industry a favor. They have forced us to look inward at our own relentless self-involvement, and outward to the men, women and children who are our actual customers.”
And Scott Cunningham, general manager of IAB Tech Lab, began a blog post last October with a mea culpa.
“We messed up,” he wrote. “As technologists, tasked with delivering content and services to users, we lost track of the user experience.”
Cunningham was emphatic that, “digital advertising (is) the foundation of an economic engine that, still now, sustains the free and democratic World Wide Web.”
“But,” he wrote again, “we messed up … we over-engineered the capabilities of the plumbing laid down by, well, ourselves. This steamrolled the users, depleted their devices, and tried their patience.”
And, he added, it upset the “equilibrium of content, commerce, and technology,” and robbed consumers of, “a safe, usable experience.”
This is music to Meyer’s ears. “The online ad ecosystem is a mess, a Frankenstack, a disaster,” he said. “Thousands of companies are all trying to get access to get consumer data in one form or another, and consumers see it in pages getting slow and ads following them around the Internet. Data plans are being drained, batteries are being drained and bandwidth is getting eaten up.
“Not to mention that it is a scary new threat vector for malware.”
The IAB Lab’s proposed solution is what it calls the LEAN Ads program - Light, Encrypted, Ad-choice-supported, Non-invasive ads. The standards for such ads, Cunningham wrote, will be set by a nonprofit body with “many diverse voices,” including consumers, providing input.
All of which sounds at least something like the AdBlock Plus “Acceptable Ads” manifesto, the standards for which are going to be turned over to an “independent committee,” according to Williams, who added that ads that are allowed through, “are very safe because there are no ads served programmatically – malvertising is basically a byproduct of the uncertainty that programmatic ad buying creates.”
That does not mean the end of conflicts, however. Sourcepoint’s Barokas agreed that publishers and advertisers, “need to be constantly reviewing ad strategies to ensure they are not alienating audiences.”
But he maintained that too many ad blockers remain “blunt objects that punish publishers that offer even the most polite and relevant ad experiences.”
And he said he doesn’t think many publishers will “find comfort or solace in paying whitelisting fees associated with ad-blocking companies. “The only way for premium publishers to remain in operation,” he said, “is for consumers to agree to view ads in exchange for content.”
He likened the current situation to the disruption of the music industry in 1999. Napster, he said, “played a central role in raising awareness of changing digital consumption patterns,” which convinced the legacy industry players they would have to evolve to survive.
The result was services like iTunes and Pandora, which, “provided a user experience consumers were willing to pay for.” But the Napster model essentially disappeared.
Ultimately, Meyer said he thinks the ad industry has realized that even if their ads get through, it isn’t good if they are intrusive. “If the consumer doesn’t want to look at the ad, it’s not good for the company,” he said.
Dave Grimaldi, executive vice president of public policy at the IAB, conceded that the complaints about intrusive ads make, “a worthwhile point.” He said that the industry’s response, with LEAN ads, along with a DEAL (Detect, Explain, Ask and Lift or Limit) approach to consumers who are blocking ads offers a way, “to convey to visitors that ad blocking harms the free Internet.”