As ad blockers rise, will the Web business model fall?

Adblock Plus at work on a CNN news page.
Adblock Plus at work on a CNN news page.

People like me could wreck the Internet. And suddenly, there are a lot of people like me.

For years, I’ve used browser-based software that blocks most of the advertisements on Internet sites. I don’t mind most ads, but the blocker hides the most annoying ones, and speeds up my browser.

If everybody used ad blockers, or just 50 percent of everybody, many free, ad-supported Internet sites would disappear. But since few of us used blockers, there was nothing to fear.

Until now. PageFair, an Irish company that helps advertisers fend off the blockers, says that the practice is soaring. As of June, 45 million Americans were using blockers, most of which are free. That’s about 16 percent of the nation’s roughly 280 million Internet users, but the number grew 48 percent in the past year. Worldwide, 198 million Internet users block ads, up 41 percent. PageFair claims that the resulting worldwide loss in ad revenue comes to nearly $22 billion.

“We’ve been averaging 3 million downloads per week,” said Ben Williams, US spokesperson for Germany-based Adblock Plus, one of the most popular blockers. “Ad blocking is becoming mainstream.” So mainstream, in fact, that Apple Inc. is adding it to the upcoming iOS 9
software for iPhones and iPads, due for release next month.

Smartphone ad blockers could prove hugely popular, because mobile phone ads count against the phone’s monthly data limit. Why not block downloaded ads you don’t want anyhow? And remember that Apple has sold more than 700 million iPhones and more than 260 million iPads. When iOS 9 rolls out, many of these devices will go ad-free.

This doesn’t even count the impact of online privacy tools such as Blur, from Boston-based Abine Inc. Blur blocks “tracking cookies” that let advertisers follow our movements through the Internet. “The goal of our product is not to block ads,” said Abine co-founder Andrew Sudbury, but often that’s the only way to block the cookies. “We probably block half the ads on any given site,” Sudbury said.

I use Blur and a more aggressive cookie blocker called Ghostery, as well as Adblock Plus, and I keep them very busy. During a recent visit to the CNN website, I blocked four ads and 16 cookies. The Boston Globe’s own homepage wasn’t nearly as saturated — just a couple of ads and nine cookies. Either way, the advertisers never laid a glove on me. No wonder they’re running scared.

In December, two major German news publishers sued Adblock Plus, complaining that it unfairly deprived them of revenue. Too bad, a German court replied in April. I’d bet any American court would say the same.

So advertising-dependent Internet companies are girding for a technology arms race. “We’ve developed technology to circumvent the ad blockers,” said Matt Adkisson, co-founder of a New York company called Sourcepoint. When someone using an ad blocker arrives at a Sourcepoint-protected site, he’ll still see the ads, like it or not.

Adkisson said he’s playing for very high stakes. “Left unchecked, the growth of ad block destroys the Internet as we know it,” he said. “We literally have to break ad block in order to evolve into a more sustainable system.”

Besides, Adkisson gripes that Adblock Plus holds ad-based websites to ransom. Adkisson told me that Adblock Plus contacted him in 2011, when he was running an online publishing service. A company representative warned that ad blocking could cost his Internet business a lot of money, then offered to add his company to a “whitelist” of sites whose ads aren’t blocked. “Pay us half the amount that you lose, we’ll whitelist your ads.” Adkisson claims he was told. “Needless to say, this struck us as extortion.”  He said Sourcepoint is his way of fighting back.

Adblock Plus’s Williams said his company will find ways to defeat Sourcepoint, and keep blocking ads. He also scoffed at Adkisson’s blackmail claim. He said that Google Inc. and other major Internet companies have paid for whitelisting, but 90 percent have been let in for free. In exchange, they must agree not to show offensive and annoying ads, like the kind that play loud music or flash unwanted images in the middle of the screen.

“Ad blocking is a symptom of bad advertising online,” said Williams, who thinks the impending crisis is an opportunity to finally get it right.

His rival Matt Adkisson agrees. He said Sourcepoint plans to let users opt out of receiving ads that get on their nerves. Another anti-ad block company, Ireland’s PageFair, works with publishers to help them develop inoffensive ads that users won’t want to block.

If enough online advertisers get the message, they may save themselves from their greatest peril — millions more people like me.

Hiawatha Bray is a technology reporter for the Boston Globe. E-mail him at [email protected].
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