Advertisers Should Love AdBlock Plus

6 September 2013 by Matthew Gertner - Category: Rants and Ruminations

Last weekend On The Media ran a repeat airing of their excellent episode on online business models. One of the segments is an interview with AdBlock Plus CEO Till Faida, who defends their eyebrow-raising business model of charging large companies to not block their ads. Yesterday Salon ran an article on the travails of online advertising including, among other things, an interview with the same Mr. Faida. Both pieces are worth checking out. 

One of the most interesting ideas raised is the notion, expressed by some in the advertising business, that internet ad blocking amounts to theft. The Salon piece links to a Twitter thread that provides a handy overview of the full spectrum of reactions to this claim. But all of these, pro and con, seem to accept unquestioningly the idea that advertisers lose out when less people view their ads.

But do they? What makes it most difficult for me to accept that ad blocking is theft is the fact that I personally never, ever click on internet ads. I generally don’t bother to block them but I do what I can not to look at them (scrolling the page so they are out of view, for example, especially when they are intentionally distracting). Since I’m never going to follow an ad to the vendor’s website and buy something, does it make sense that I am somehow stealing from them?

The fact is that, although display advertisers pay for page views, that’s not what they actually want. My company’s AdWords campaign is one of our most important marketing channels, but I don’t particularly care how many people click on our ads. I’m not even that interested in how many people click on our ads and visit our website. Even the number of people who inquire about our services through our web form isn’t key metric, it’s how many people actually end up buying something. If ad blocking causes advertisers to get less page impressions, they shouldn’t be concerned unless this reduces the number of sales they ultimately make.

By some accounts, only 8% of internet users account for 85% of all ad clicks. I wasn’t able to find reliable statistics about this, but I find it convincing that the intersection between this group and those who use ad blocking software is tiny. And though clicks might not be the final goal, they are an essential step in the path to an eventual sale. If people who block ads were very unlikely anyway to buy something then the advertiser shouldn’t have an issue with them.

On the contrary, according to this hypothesis, advertisers should be positively supportive of ad blocking software. After all, they pay more for more page views whether they lead to more sales or not. If, say, 50% of users block ads, the advertiser pays half as much without necessarily losing much value as a result. By weeding out those who weren’t likely to become customers, ad blockers are actually doing them a service. The ones who lose out in reality are the websites that are trying desperately to convince the advertisers that page impressions are an accurate proxy for the value they are getting for their ad dollar.

Obviously this perspective is a bit exaggerated. Banner ads help build brand awareness even if no one ever clicks on them. I might never click on ads but that doesn’t mean that the mere fact of seeing them might not sometimes influence my purchasing decisions. But the possibility of a strong inverse correlation between ad blocker usage and propensity to click on ads is something advertisers should take seriously. And it certainly calls into question the silly assertion that ad blocking is somehow akin to theft.


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COMMENTS
  • villepr

    I’m not very familiar with this discussion, but seems to me there’s a mixup of two types of people with different incentives. Those whose income depends on ad-views (advertising agencies) and those that buy advertisements to make an actual sell (usually clients of the former). The latter indeed prefers more efficient advertising, the former often has other metrics…

    • Emanuel Hoogeveen

      And don’t forget the content producer on networks like Youtube or twitch.tv, who depend on people watching ads to get money. On the other hand it would, perhaps, make more sense for them to get a flat rate based on the amount of views or viewers, if we assume that a consistent percentage of people look favorably on ads (but that’s not how it works right now).

  • Anthony Hasek

    Internet is and always has been analagous to traditional forms of advertising – print and broadcast. The difference has always been the perception of the internet as a utility, rather than a media and advertising channel – and people’s resulting demand for free content. in 2000 I stated that the internet would eventually be just a channel delivery vehicle, and that video would dominate traffic…and that at that time the traditional advertisement would become dominant. This is because it is the only universally accepted form of content transaction. I believe the time has finally come that traditional denial of content advertising (i.e. forcing the consumer of content to watch an ad) to dominate; my time for your content. Any talk of ‘theft’ is simply due to the feedback mechanism now available to the advertiser and their misunderstanding of what that means for their brand. Traditional advertising channels had no way of referring back statistics to the advertiser, so there was no issue if one, say, flipped the page without really examining the ad or muted the ad while the popcorn popped. Now, advertisers expect and demand that an ad be viewed, with no thought as to the adverse impact that can have on a consumer’s perception of their brand. Advertisers must, as you say, get over the ‘views’ statistics and look only at the ultimate goal – the translation of advertising to sales and the analysis of which channels most contribute to that end.

    What I’m more concerned about is the cookie trail that leads my browser to insist I buy headphones when I have already, long ago, made the purchase – now that’s just creepy and irritating :-)

    • http://www.salsitasoft.com Matthew Gertner

      I’m not convinced that advertising is so widely used because it’s the “only universally accepted form of content transaction.” I would say rather that until recently it was the only technically feasible form, and we should be thinking about new models that avoid the many weaknesses of advertising (see http://www.salsitasoft.com/2012/08/15/the-case-against-advertising/ for more of my ranting on this topic).

      I’m planning a follow-up post that tackles the question of how to fix advertising.

      • Anthony Hasek

        Understood, but I am traveling and dealing a lot in the developing world, and while some places have interesting monetization methods, ads are still the most recognized and, frankly, feasible method of transaction…I’m sure that’ll change (I’ll take a look at your articles), but in my view and what I meant is it’s the only one that is used to some degree of success everywhere… :o )

        • http://www.salsitasoft.com Matthew Gertner

          The thesis of my next post on this topic (SPOILER ALERT!) is that ads don’t accurately reflect the valuation each individual puts on their time. There are definitely groups who would much rather view an ad than pay money (as in your example) but ad models generally assume, erroneously, that this sentiment is universal.

  • http://blog.ssokolow.com ssokolow

    I like to point to defunct’s “Why ad blocking is not a moral dilemma” whenever this comes up. ( http://www.less-broken.com/blog/2011/11/why-ad-blocking-is-not-moral-dilemma.html )

    Thanks for giving me something else to point to as well.

    As for brand awareness, I’ll agree that does have an effect… I resent and advise friends and family away from brands which try to force themselves into my face despite my ad-blocking efforts.

  • DigDug2k

    I think MOST (not all) internet (and TV, and everything) advertising is designed, not to drive clicks, but just to expose you to a brand name. I think advertisers WANT you to think they want clicks. It makes you feel smug and superior. “I’m not fooled by your crazy ad gimmicks.” But the reality is, they’ve left an impression in your head, and you won’t easily be able to get rid of it. No one can. It has nothing to do with intelligence or thoughtfulness. We’re just hardwired to remember this stuff and later, without any context as to why we know “Chrome is speedy!” or “Pepsi tastes great!”, to believe it.

  • Wladimir Palant

    There is a series of my blog posts from 2007 that goes into the same direction (e.g. https://adblockplus.org/blog/ads-dont-generate-money). However, the assumption here is that Adblock Plus users don’t click on ads. While that’s certainly true for you and me, Adblock Plus is widespread enough these days that this assumption is no longer true in general. One thing is pretty certain by now: the people who would never click an ad are a minority in our user base, something between 10% and 25% of all users depending on how you count.

    And the rest of them? Some had Adblock Plus installed on their machine by a friend or relative. Some installed it themselves but did it because of a recommendation rather than because they actually needed it. And then there is a constantly growing group of users who don’t actually mind ads – they are the target audience of these ads. And yet they installed Adblock Plus, simply because advertising has grown so aggressive that it impacts their browsing negatively.

    The advertising might be more or less aggressive depending on the web pages that you visit (e.g. the Russian-language segment of the web is pretty horrible) but there is a universal tendency towards more aggressive advertising. The advertising industry is very actively working on cutting the branch it is sitting on – and all the accusations of theft are misplaced. Adblock Plus is actually attempting to aid a return to sanity here.

    FYI: There is another interview with Till Faida under https://www.youtube.com/watch?v=sR8ff2IacmE. Yes, that guy has been very busy lately :)

    • http://www.salsitasoft.com Matthew Gertner

      I’m pretty surprised by the 25% figure. Do the hypotheses behind this estimate include clicks on search ads or is this just display advertising?

      • Wladimir Palant

        To be honest, I don’t really know. The high 25% figure comes from an older user survey where the question was phrased fairly generally and the responses most likely have display advertising in mind. The lower numbers come from real-world measurements for the “acceptable ads” feature. While I wasn’t involved here, these numbers probably reflect the behavior for search ads better than for display advertising – our acceptable ads list is heavily skewed towards search ads, that’s simply the most common type of acceptable advertising.

        • http://www.salsitasoft.com Matthew Gertner

          I was really talking about display ads in my post. I click on search ads occasionally and consider them to be a different beast entirely. It would definitely be interesting to have some hard data about how many leads advertisers are really losing due to ABP. I was only speculating but I still find it fairly plausible that advertisers are actually gaining from people self-selecting as ad-haters by using ABP (or similar). The posts you link to say something very similar so perhaps not much has changed since 2007.