There's been a lot of talk lately -- and more than a little hand-wringing -- about the rise of online ad blocking. In part, that's because of a recent study that shows what appears to be a dramatic increase in the use of ad-blocking software. It might also have something to do with the news that the next version of Apple's mobile Safari browser will be able to block ads automatically (except for Apple's own ads, of course), which threatens to make ad blocking mainstream.
For at least some players in the media industry, this looks like a cross between a Class 5 hurricane and a neutron bomb headed straight for their balance sheets. It's not enough that they are struggling to make money as print advertising continues its free fall into oblivion -- now digital ads, which already provide orders of magnitude less revenue, will be obliterated.
According to the study, which was done by Adobe Systems and Page Fair, the use of ad blocking software has increased 41% in the past year alone, and cost publishers $22 billion in lost revenue. Of course, it's worth mentioning that Page Fair's business is helping publishers get around ad blockers, so there is perhaps an incentive to see the problem as larger than it might actually be. In any case, blocking is a big enough phenomenon that dozens of large players pay AdBlock Plus to have their ads whitelisted, a feature the software company cleverly offers.
I'm not quite as sanguine about the long-term impact of ad blocking as Felix Salmon, who wrote at Fusion recently about how the anxiety over it is misplaced, and most publishers will be fine. Plenty of ads get missed for a variety of reasons, he says. All ad blocking really does is automate this kind of shrinkage, which the ad industry more or less takes for granted (as it also does with rampant click-fraud).
That may be true, but I think there's little question that such issues help keep the price of digital advertising low. And that in turn makes it difficult for anyone but the largest of digital publishers to actually make a living from such ads, since it takes a billion pageviews before you are making anything like a decent return. At the very least, ad blocking doesn't help.
You can see the stress that this creates, particularly for small publishers, in some of the responses to a recent blog post by Marco Arment, co-founder of Tumblr and Instapaper (a tool for saving web pages that is now owned by Betaworks). In a piece entitled "The ethics of modern ad blocking," Arment wrote about how he doesn't feel any qualms about using ad blockers, despite the fact that by doing so he is at least affecting the livelihood of the sites that he reads. In the end, he says, publishers have made their beds and should be forced to lie in them:
"Publishers don’t have an easy job trying to stay in business today, but that simply doesn’t justify the rampant abuse, privacy invasion, sleaziness, and creepiness that many of them are forcing upon their readers, regardless of whether the publishers feel they had much choice in the matter. Modern web ads and trackers are far over the line for many people today, and they’ve finally crossed the line for me, too."
A number of critics, including Awl publisher Choire Sicha, pointed out that the Instapaper software Arment developed automatically removes advertisements from the web pages it saves (as does Apple's Reader software, which is built into Safari), implying that he is no friend to publishers to begin with. Sicha suggested that if everyone used ad blockers then many publishers would go out of business, and that not everyone can simply charge their readers to generate revenue.
There's no question that many publishers both large and small are caught in a Catch-22 kind of situation: They rely on advertising for their financial well-being, but in order to cater to advertisers who want to see large numbers, many feel they have to pump out as much shallow click-bait as they possibly can. That in turn makes their sites even more reliant on advertising, because no one in their right mind would actually pay to subscribe to a site that publishes that kind of content.
Meanwhile, the continuing decline in rates for most forms of digital advertising causes these publishers to make even more Faustian deals with sketchy ad networks, click farms, popup manufacturers and recommendation engines like Taboola and Outbrain. And that in turn causes reader churn, low engagement and poor clickthrough rates, and probably increases the growth of ad blockers.
One tangible result of all this sturm und drang is that it is increasing the demand for "native advertising," which looks like normal content and thus is theoretically impervious to ad blocking. For those who see native advertising as something evil, this probably isn't a good thing -- but the benefit of good native advertising is that readers don't see it as advertising, they simply see it as useful or interesting content (if it's done properly, that is). And therefore they don't want to block it.
In the end, I can't help but agree with Arment to some extent. Publishers may argue that they are being forced by advertisers to engage in all of these popup and click-farm tactics, but who made them sign those deals in the first place? In the end, readers likely won't shed a tear as they turn on their ad-blocking software or click away to some other site that doesn't treat them so shabbily. And whose fault is that? You have to dance with the one who brought you.