The war surrounding ad blocking software has cost advertisers and online publishers nearly $22 billion in blocked ad revenues in 2015. Caught in the middle are 198 million-plus users blocking ads for a slew of reasons, not the least of which is to escape online tracking.
It is a war of parallels. As online advertising revenue dips, the popularity of ad blockers grows. Nearly 200 million active monthly users applied ad blockers on Desktops by mid-2015, said Johnny Ryan, head of Ecosystem at PageFair, an anti-ad-blocking solutions provider.
By March 2016, 419 million people were using mobile ad blockers, mostly in Asia. And in the past year, adoption of ad blockers grew by 41 percent globally, according to a recent PageFair study.
Ads can be annoying. They can obscure content and can be “data-heavy and cost a user to download … and lengthen the process of loading a page,” said Ryan in an email.
“Part of the people’s desire to use ad blockers is to safeguard their privacy as well as clean up a cluttered experience, or simply just take control of their browsing experience and … see the things that they want to see,” said Mitch Stoltz, senior staff attorney with the Electronic Frontiers Foundation.
What happens in the background when a user encounters online ads is that “networks that deliver them are collecting vast amounts of information about consumers using the Internet and aggregating vast amounts of information across multiple websites,” said Stoltz.
That means that visits to multiple websites, buying and reading habits – all “have the potential to be combined into very comprehensive profiles of a person’s life and preferences and activities,” he added. “And then that information is sold.”
For advertisers, blocking the data flow is a problem. Online privacy is a “significant issue” for the advertising industry, said Ryan, because “large quantities of capital and other resources are being invested by agencies into the further development of personalized advertising.”
Advertising is an essential piece of the online economy, said Chandler Givens, CEO, Co-founder of TrackOFF, a company that makes consumer privacy tools. Ad blockers blacklist Internet addresses that serve ads and related assets.
If people want to continue to receive free services online, said Givens, then “the trade-off is going to be that they have to be willing to … encounter advertising.”
According to PageFair, online publishers of all sizes have been impacted by ad blockers. “As of mid-2015, news sites were suffering a 10 percent rate of ad blocking,” said Ryan. “However, this figure is much higher for news sites that heavily feature video, where rates can reach 60 percent in some cases.”
Citing a 2015 survey of UK publishers, Ryan said 65 percent of publishers viewed ad blocking as a threat to their business model, and one in five saw it as the most significant problem they faced.
“The pendulum has swung too far in the direction of allowing advertisers to do whatever they want to market to consumers,” said Givens, recalling that in recent years, the U.S. Federal Trade Commission argued that the ad industry, which claims self-regulation, “really has to do a better job about taking into consideration things like the privacy of consumers.”
While cautioning that it’s not just ads that collect data about online users, he noted the non-binding Do Not Track Initiative, which lets online users opt out of being tracked on sites they don’t visit.
“It’s at the discretion of the ad agencies whether or not they want to abide by that … or not,” he said. “And most chose not to. Nothing is really going to change in this area either unless there is meaningful reform that will probably come from the legislature.”
Advertisers should obtain the consent of consumers before collecting personal data, he said, and should, in turn, disclose in the provision of their ads what they are collecting.
“The balance is going to be determining how pervasive these ads are and how much information they are able to collect about individual users and what’s fundamentally fair,” he said.
Givens said some envision a future where users can “ratchet up or ratchet down the amount of information that is collected about you in exchange for discounts. … It’s a market solution to the problem … Who knows if it will happen, but I don’t think it’s that far off.”
That’s only one model. PageFair provides an approach that ironically serves advertising to the parts of the Internet that block ads. “The Blocked Web,” said Ryan, “is entirely uncluttered and offers marketers a singular opportunity to cut through the noise online.”
He said advertisers “have not yet fully understood the deeper significance of ad blocking, which is the opportunity to reach users on the Blocked Web.”
“Rather than simply ‘reinsert’ the same ads that caused ad blocking in the first place, one has to use premium and respectful advertising … that solves privacy, performance, ux [user experience] and security consumer issues.”
It is this parallelism – the ability of agencies to leverage the new opportunity of advertising beyond blocking, without cannibalizing their status quo business – that will give publishers an opportunity to sustain themselves beyond ad blocking – PageFair’s Johnny Ryan
Whatever the model, Stoltz cautioned that users “should be able to alter the way that they consume or view web content. … To say otherwise, is to say that as soon as you visit the website of a newspaper, that website takes over your computer.”
Stoltz voiced support for “good faith attempts” to move away from the “purely advertising-driven Web” to one that is “more respectful of people’s privacy.”
“The guiding principles,” he added, “should be that the user should be informed and in control and able to use the technology of their choice to control their Internet experience. And we shouldn’t discourage experimentation and new business models.”