Public's love for ad blockers infuriating publishers

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Just a few days after Apple's latest operating system iOS 9 was released with an ad blocking function, apps that promise to limit intrusive and unwanted advertising are leading the company's app store. Apps including Peace, Crystal and Purify Blocker that purport to clean up the mobile browsing experience are among the top five paid downloads. (Peace was removed from the App Store on Friday.)

On Sept. 8, Apple allowed one of the largest ad blocking companies. Adblock Plus, to put its Adblock Browser in its app store. It then strengthened its position the next day when it announced iOS 9 would also include the controversial programs that are infuriating some publishers and advertisers, who claim that ad blocking is cutting into their revenue.

"Ad blockers are a necessary tool for users because the ads landscape is broken," said Ben Williams, Adblock Plus communications and operations director. "Ad blockers are a symptom of that broken scene, and they are a user's only defense against ads that track them, endanger their security with threats like 'malvertising' that annoy them."

According to an Adobe and PageFair report, about 198 million people around the world use ad blocking software, with the number growing 41 percent over the last year. In the U.S. alone, 45 million people use ad blockers.

Ad blockers are programs that block digital advertising, which can be as simple as banners that appear on the side of your screen to brand-sponsored advertorials or "native content."

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Williams said part of the reason why users feel compelled to download ad blockers is because digital advertising can cause a horrific user experience. Popups and glitches prevent people from getting to the articles they want with media outlets deluging their readers with tons of ads. He believes that with more people using ad blockers, it will force the advertising and publishing industry to work together to overcome these problems.

"Our mission is not to destroy ads—it is to encourage better ads," he said. "That's why we developed standards for better ads with our users and give companies who uphold them the chance to let their non-intrusive ads through. This is our vision: a compromise whereby we encourage better ads and eventually eliminate the bad ones."

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But, with more people using ad blockers, it means less revenue for publishers trying to sell digital ad space. Considering that most editorial content online is free, ad blocking opponents say that it's cutting funds needed to create quality content. Adobe and PageFair estimated the software will end up costing publishers about $22 billion this year.

"The publisher loses control of the context in which the content is delivered, and they lose control of the ability to monetize it and package it with other things on the site," said Sourcepoint CEO Ben Barokas. "Adblock Plus and many of the other upcoming apps that are going to be in the app store, what they fail to realize and what they fail to put forward is without the advertising revenue these publications will die."

Adblock Plus home page
Source: Adblock Plus

Brian Mandelbaum, CEO of video advertising platform Clearstream, doesn't buy the ad blockers' argument that their products can improve the entire industry. He believes the part of being an online media consumer means having to deal with online bugs, which is why we see so many digital companies like Facebook or Twitter constantly updating their apps.

"It's a very heavy-handed statement that because one ad has a poor experience or even two ads means the entire industry needs to be swept under the rug," he argued.

Barokas said that he has no problem with Apple allowing the apps into its store because users should have the choice to optimize their experience. However, he takes issue with how it derives some of its revenue.

Like most ad blocking software, Adblock Plus is free to download. It makes its money by charging media companies to be included on its "whitelist," an approved list of outlets allowed to show advertising to Adblock Plus users. Adblock Plus claims it vets these companies and determines that they have premium advertising experiences, which is why their ads still appear. It charges the top 10 percent of the companies a fee.

"I don't think agree that ad blockers can dictate the industry," Sourcepoint's Barokas said. "It's a conversation between publishers and users, and ad blockers sticking themselves in the middle to extort revenue from publishers is incomparable."

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Adblock Plus' Williams, however, compares the fee to taxes.

"As for who pays, are income taxes extortion because the 1 percent pay more?," he said. "We have a simple agreement with a handful of companies who help us sustain our model of creating an Internet with acceptable ads. If they thought it was extortion, they obviously wouldn't pay us a dime. Besides, we'd be pretty poor 'extortionists' if we let 90 percent off for free."

Barokas favors models like those provided by Sourcepoint that help publishers create compensation models for their content, including paywalls. He believes that if users don't want to deal with advertising, they should be willing to pay for the premium experience.

Recently, some publications have been taking a stand. For example, The Washington Post prevents users from reading content on its site if the reader has ad blockers. People have the option of signing up for its email list or turning off the software.

"It's not about the ad block users: It's about having conversations about choice around that compensation," Barokas said. "I think that's where we're going. There's going to be transparency in the give-and-take that comes from giving content and paying for content."

Correction: Purify Blocker is an ad-blocking app. An earlier version misstated the name.