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.
As promised last time, let’s do something more serious today…
Let a be any expression. We will call x the fixed point of expression a if x names ax. (Reminder: lower-case letters in our programming language represent a combination of upper-case letters.)
The fixed-point principle says that for each expression a there exists its fixed point x. Furthermore there is a (quite simple) “manual” for constructing the fixed point x of any expression a.
So the question of the day is: can you find that “manual” proving fixed-point principle?
Next time, we’ll explore more serious aspect of our programming language, but let’s have some fun for today finding expressions (programs) with strange properties, similar to what we did last time (but a bit more difficult today).
As usual, we’ll use only Q and R rules (described here).
Question 1: Find expressions x so that RQx names (resolves to) QRx.
Question 2: … RRx –> QQx
Question 3: … RQx –> RRx
(You can check how previous riddles were solved. This could help a lot in case you don’t know how to approach solving this.)