AdBlocking — Is it Destroying the Open Web?

PARKVIEW Technology Merchant Bank organizes the NetForum to provide a Peer to Peer learning network to CxOs of Digital Businesses and Corporate Development & Strategy executives in larger, established companies. ____________________________________________________
The NetForum NYC held its September monthly meeting (on 9/25/15) to discuss the burning issue of AdBlocking.  Our host was Richard Eisert, partner at Davis & Gilbert, LLP (www.dglaw.com), with featured guest Sean Blanchfield, CEO of PageFair, Ltd. (www.pagefair.com).

 

At our meeting, I tried to focus the discussion on What is AdBlocking and Why should I care about it?

 

What is AdBlocking?  I suggested to the group three definitions of AdBlocking: 1) it’s a piece of software that blocks the display of ads on a web browser, 2) it’s a means of expressing a user’s desire not to see ads on a web page, and/or 3) it’s the theft of a publisher’s intellectual property.  We debated all three definitions.

 

AdBlocking is enabled by browser extensions called AdBlockers.  AdBlockers are usually browser extensions that are very easily installed on the most popular browsers.  These browser extensions are able to do two things.  First, they can view the external calls made by browsers.  When the browser calls the IP address of an ad server that appears on a list of IP addresses maintained by an open source community of AdBlocking activists, the call to the IP address is blocked and the ad cannot be served.  The list is updated constantly and is quite comprehensive.  Second, the AdBlocker browser extension can also detect various content formats on a web page and recognize ad formats.  When it does recognize something that looks like an ad, it hides it from view and rewrites the web page so that the page will still look good and not have a gaping hole somewhere.  The result is a fast loading page, with no ads and usually (but not necessarily) without cookies and tags that various parties load on users’ pages.  Once an AdBlocker is installed it blocks all ads, not just annoying ads, on all sites, not just on offending sites, and on desktops and on the mobile web (not yet on mobile apps but that will come too with other tools).

 

AdBlockers are the expression by users of a desire to not see ads.  This is may be the most controversial “definition” of AdBlocking.  The web is user centric and the entire ecosystem is geared to listening to what users are saying with their clicks, likes and connects.  So, when over 200 million users have actually downloaded a piece of software which sole purpose is to block ads, everyone listens: from browser companies, to web publishers, to advertisers, basically everyone.
However, divining true intent is always tricky.  Did these users actually mean to say they did not want any ads, of any type, on all websites, forever?  Clearly, many participants in the web ecosystem would like to say that it is not the case and that users, or at least all users except for the diehard fringe, did not mean to totally block ads.  This has led various industry bodies and vendors to introduce the idea that there are “good ads” that users would not mind.  The IAB is promoting its “L.E.A.N Ads Program,” and even the leading AdBlocking company, AdBlock Plus, is promoting its own “Acceptable Ads Program.”  PageFair enables publishers to bypass AdBlockers and reintroduce ads on web pages but with the strong recommendation to act responsibly with this restored power.  The general argument of these initiatives is that the industry may have brought this calamity on itself, and if it could reform its ways by showing “good ads”, then users would stop installing AdBlockers and those who already have will not mind their new improved reappearance.

 

AdBlockers are accused of stealing the intellectual property of publishers.  This is an oft-expressed view by publishers, understandably.  But is it true?  Legally, it’s a very tenuous position with very little support for it. I won’t go into the details and just say “ask Richard Eisert.”  But the accepted view in the media industry is that there is an implicit agreement between users and publishers that users will accept ads in exchange for viewing content without paying.  That implicit agreement was established off-line and followed publishers to every new media format — TV, Radio, Web…  If the users don’t want to watch ads, then they should pay.  However, publishers know that the competition is fierce and that very few people will actually pay for very few content sites.  Hence, publishers would prefer to have a means to display ads that users can’t avoid and retain that implicit contract intact.

 

Why Should You Care?

 

Publishers and Advertisers should care.  Users should care.  But for different reasons.

 

Let’s take a walk back into Web History.  When the web was born, there were already on-line services that sold access to closed networks where people could find Community and Content.  (AOL, Prodigy, Compuserve, etc.)  Users paid one price and the provider paid for access points and for content from publishers.  Eventually, these platforms got unbundled.  You could buy access from many different providers and then you were free to roam the web and find the content you wanted.  These content providers were deprived of access fee revenues so some chose to charge for subscriptions, and others rented their traffic to brands, ie they placed ads.  An entire ecosystem sprung to mediate the transactional workflow between eyeball suppliers and brands.  And the world was supposed to be a better place.

 

But it was not.  The advertising revenue stream was really not sufficient to support most sites.  So, they had to resort to more aggressive tactics that drove ad prices down and increased the amount of advertising being served.  With the emergence of the idea that the web should be used to stream video, and that people should just cut the cord to the cable providers, the advertising model from the cable and TV worlds was imported to the web — ads that interrupt your attention.
Ultimately, advertising (other than search advertising) is a fight for your attention.  How to get it — interrupting the flow of your activity or surrounding it — are just different ways to accomplish the mission.  In the end, the web, which was intended to be user centric with the user in charge of his/her experience, became another battlefield for attention.

 

This created the market opportunity for AdBlockers.

 

It was clear from our discussion that people agreed that the web ecosystem needs to react to preserve itself.  Otherwise, waiting in the wings are new “closed” platforms that are able to capture the loyalty of users, again with community, and that are appealing with open arms to content creators to publish their content on these platforms.  These platforms — Facebook, Twitter, LinkedIn, Apple’s AppStore and others — are able to extract payment from users and/or advertisers and are willing to share that revenue stream with publishers.  They are making publishing tools available to professional and amateur publishers to enable them to publish on their platforms.
However, the publishers have more limited access to the users that visit their content on the platforms — they are being disintermediated from their audiences.  That is not a good thing for the publishers.  It could be solved by maintaining a web presence as well or by negotiating with the platform providers a way to get better access to user data.  Tough choices.

 

Will users benefit from the disintermediation?  Clearly some believe that the Open Web is a hard fought for social benefit that has greatly benefited humanity.  Anyone can publish whatever they want.  Platforms come with “community guidelines” meant to exclude some content and some publishers.  That is a slippery slope to censorship.  At the same time, if these publishers cannot sustain themselves then what they did is transfer wealth from founders, employees and investors in these ventures to their readers/viewers.  A massive free lunch is indeed a benefit to humanity.

 

The NetForum group obviously did not solve these issues.  The debate was passionate and heated, mixing pragmatism and idealism.  AdBlocking touches on the business model that for right or wrong has supported an Open Web.  Is it the only business model possible? Could it be preserved and improved? And what if we just all lived on closed platforms?  The answers to these questions affect Commerce but also societal values such as Freedom of Expression and Democratic Debate.  Nice work for a little browser extension.

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