Billions of advertising revenue is thought to have been lost from ad-blockers.
Image: Lee Woodgate/Getty
Ad-blockers may seem like an answer to an internet user's prayers. No annoying pop-ups, no promos before videos and no concerns about accidentally clicking on a virus. But for ad-driven websites, they're a revenue leech that needs to be pried off.
This is becoming one of the internet's biggest debates. More countries are cracking down on ad-blockers—the EU's European Commission even proposed a rule this week that would allow media companies to ban users who use ad-blockers. The debate is no longer on the fringes with tech's biggest names, including Facebook, weighing in.
"Ads support our mission of giving people the power to share and making the world more open and connected," Facebook Vice President of Ads & Business Platform Andrew Bosworth said in an August announcement last year.
As of 2015, 500 million devices worldwide had an ad-blocker installed, including 181 million desktop users with an active ad-blocking plug-in or used a browser that automatically blocked ads, according to PageFair, an industry leader among advertising recovery—i.e. anti ad-block— companies.
That led to an estimated loss of billions of dollars among websites and online services that rely on advertisements for their primary source of revenue. Nearly every corner of the internet relies on advertising to avoid charging consumers—everything from music streaming to video hosting to news outlets.
So how do anti-ad-blocking tools work? First, these companies run analytics to help websites understand how much revenue is being lost to ad-blockers. Then the companies offer their customers tools that can ask users to accept advertisements, give online users a choice about which ads are removed or allow website users an ad-free experience if they pay a fee—depending on which anti-ad-blocking service used.
It is "really an access control system," said Dan Rua, CEO of Admiral, which builds software to strip away ad-blockers. By giving users options and explaining the need for ads, consumers don't feel like they're being blindsided.
Getting around ad-blockers could open the dam for a lot of money, especially for struggling industries like free training (think sites like Coursera) and gaming websites. Facebook's decision last year to create tamper-proof ads that can't be removed by ad-blockers is expected to yield an additional $720 million this year in advertisement revenue for the social media giant, according to the PageFair analysis.
To see the whole problem, you have to look at how the internet is affected by ad-blockers, Rua said. It's a matter of whether the internet can continue to remain free and open to anyone. "There's billions being lost across the industry," he said. "Nine out of 10 sites that people visit are free, and that's only because of advertisements working."
Different sections of the internet are affected more than others—for example, about half of the traffic to technology and gaming websites come from users with ad-blocking tools installed—but the big picture is startling, said Matthew Courtland, spokesman for PageFair.
"Adblock threatens the sustainability of the open web and internet as we know it," he said. "If revenue is not flowing back to publishers, then the quality, diversity, and interesting content that makes the internet so wonderful will gradually die, and all that will be left will be a smaller number of publishers creating provocative 'viral' content for walled gardens."
At the same time, ad-blocking businesses say they're protecting the spirit of the open web by keeping power in users' hands. By allowing companies to force ads on consumers, they're breaking the spirit of the free internet, said Adblock Plus spokesman Ben Williams.
"When you try to wrestle the control out of the users' hands, it is something that is anti-web," he said.
Some users don't even realize ad-blockers are installed on their devices since browsers like UC Browser, which is popular in China, come installed with ad-blocking software, according to PageFair. And others install it right away as a protection against malware.
On the other hand, Williams said partial ad-blocking, which is Adblock Plus's primary model, is a more defensible way for companies to recoup revenue without stripping power from internet users.
"I think there are better ways to help publishers get lost revenue back," he said. "You can actually work with ad blocking companies to show ads that users have approved, and doing so you work directly with users, so I think that's a much more healthy and sustainable approach."
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