In a tribute to David Letterman at the end of May, fellow late night host Conan O’Brien encouraged his own viewers to go watch Letterman’s last show. He said he did expect those changing the channel to record his show and watch it later — focusing on the ads. “Just focus on the commercials… watch the commercials three times,” he said, miming the money signal with his fingers. The joke earned some laughs from O’Brien’s audience, but it also served as a reminder for how important advertisements are in so many facets of entertainment and publishing. In a nutshell, that paramount importance is why the growing trend of ad blocking is so controversial.
Blocking ads on desktop browsers has been an option for about a decade, as the most famed software, Adblock Plus, was developed in 2006. The software works as an extension on web browsers, and claims it has had at least 300 million downloads since its inception. The number of people who actively use adblocking software is relatively small compared to the total number of Internet users, but it’s a population that’s been growing exponentially over the past few years. PageFair, a company that tracks the number of ads blocked through sites like Adblock Plus, found in its latest report halfway through 2014 that about 144 million people used ad blocking software regularly. That’s only about 4.9% of all Internet users, but that number had grown 69% from the year before.
Ironically, browsers like Google Chrome that rely heavily on advertising revenue are making it the easiest to use the ad blocking software as a plugin. That same PageFair report showed that Chrome in particular saw a 96% increase in ad blocking users, up to 86 million by mid-2014. Those numbers have only continued to increase since then. The Economist reports Adblock Plus is now above 400 million downloads, and that 200 million people worldwide actively use some form of ad blocking.
At one point, it was thought that ad blocking software would disappear as mobile use increased. After all, software plugins don’t work in quite the same ways on smartphones and tablets, and ads in general can be formatted to look very different. One mobile ad industry veteran, Russell Buckley, has said that so-called intrusive ads on desktop browsers have already decreased, and mobile ad capabilities are so much better that users actually like them — or at least aren’t bothered by them.
But regardless, Adblock Plus is marching forward into the mobile sector. The software already has an extension for Android users, and in April announced it was working on the first ad blocking software for Apple devices. “We will have a product announcement for iOS,” said Till Faida, founder and CEO of Adblock Plus. “Mobile is a huge focus for us this year.”
Adweek reports the new technology from Adblock Plus will most likely be a browser that allows Apple users to surf the web without ads — or, as in the case of desktop browsing, without ads that the company deems intrusive. This will most noticeably draw users away from Apple’s built-in browser, Safari, but could also ramp up competition against other mobile browsers like Google’s Chrome.
But perhaps the most interesting facet of that switch to mobile — and the reason ad blocking software is so reviled among publishers — is that the software is most popular among the people who advertisers will pay the most money to target. Millennials are the key demographic for advertisers right now, as the 18-to-29-year-old demographic always is popular with brands who want to attract and keep more loyal buyers of their products. They’re also increasingly using mobile devices to access the Internet, as about 21% rely exclusively on smartphones or tablets, and forgo the use of desktops altogether. It’s also this demographic that is the most likely to use ad blocking software, PageFair found.
Sean Blanchfield, the CEO of PageFair, told The Guardian that 41% of American millennials have used ad blocking software, which increases to 54% when only accounting for millennial men. Using the software “is really concentrated on exactly the kind of people that advertisers are targeting,” Blanchfield explained. “It’s millennials. You can basically see a large cohort of adblockers growing up – as adblockers. And this isn’t good news for the advertising industry, or publishers.”
No matter which device the software is on, there’s a heated debate about the merits of Adblock Plus and other ad blocking companies. Publishers still rely heavily on advertising revenue to keep afloat, though subscriptions and other platforms are starting to grow. Many don’t put public figures on how much the blocking software actually costs their sites, but the numbers that are released are large. One German media group, ProSiebenSat.1, estimates that it cost the company about $10.4 million in 2014, which accounts for about a fifth of its web revenues that year.
Ad blocking disrupts the “free Internet” model
In 2010, Ars Technica ran an experiment that blocked its content from people who used the ad blocking software. Some users were frustrated there was no warning, and the company learned that many people didn’t block ads with any malicious intent; they were just annoyed with some of the advertising formats. Some people “whitelisted” the website, which means they put it on a list in the ad blocking software that allows their ads to be shown.
Blanchfield has called software like Adblock Plus the “Napster” of the advertising industry. Ars Technica founder and editor in chief Ken Fisher took a different approach. “I am not making an argument that blocking ads is a form of stealing, or is immoral, or unethical, or makes someone the son of the devil,” he wrote in the 2010 article about the ad blocking experiment. “It can result in people losing their jobs, it can result in less content on any given site, and it definitely can affect the quality of content. It can also put sites into a real advertising death spin.”
Advertisements are annoying, yes. But they’re also what keeps (most) of the Internet free. As ad blocking software continues to grow in popularity, keep in mind that it’s not disrupting one of many business models there is on the Internet — it’s disrupting the only viable one available at the moment. While that can serve as a caution to consumers, it is also hopefully a wake up call to publishers, so that they have a plan B when millennials (and others) continue to block the ads that are the lifeblood of their website. It might not be pretty, but ad blocking isn’t going anywhere, anytime soon.
More from Business Cheat Sheet:
- Why Mobile Ads Are About to Explode
- Personalized Pricing Is Going to Change the Way You Shop
- Why You’re Seeing More and More Mobile Video Ads
Follow Nikelle on Twitter @Nikelle_CS