Ad avoidance software provider Adblock Plus recently announced that it would be extending its service to mobile devices, leading Sarah Kavanagh, the acting chair of the IAB NZ Mobile Council, to raise a series of concerns about the increasing use of tools designed to dodge ads in the online space.
And the extent of the issue on a local level has now been revealed, with Ben Williams, the spokesperson of Eyeo (parent company of Adblock Plus), saying that the company already has 200,000 active users in New Zealand.
The study showed that the number of ad blockers had grown to 144 million by January 2014—a massive increase from 54 million recorded a year earlier.
Williams points out that Adblock Plus has been downloaded over 400 million times across the world, and this number is only set to increase as more people adopt the technology.
By July last year, Graeme Underwood, the general manager of interactive sales for MediaWorks Interactive, said that 10 percent of impressions on its online media properties were being ad-blocked. This led the company to take steps against ad blocking by precluding them web users from watching shows if ad-avoidance extensions were active in their browsers. And althought these restrictions are still in place on the TV Four website, however this does not seem the case for TV3 or 3News.
If the ten percent figure is to be taken as a gauge of the whole industry, then New Zealand still lags behind other international markets in terms of adoption of the software. Poland (28.6 percent), Greece (24.5 percent), Sweden (21.6 percent) and Australia (18.4 percent) all have higher levels of ad avoidance than New Zealand, indicating that there's still room for growth.
Just under 28 percent of those surveyed in the United States admitted to using ad blockers. And, when broken down into demographic groups, the study revealed that younger web users are more the most likely to use ad blockers, with 41 percent of those aged 18 to 29 saying they use browser extensions to avoid ads. Surprisingly, ad-blocking was also significant among those aged 60 or older, with this group accounting for 15 percent of total use.
Given that ad-blocking is rampant across the board, it's quite surprising that MediaWorks has not applied its policy of blocking users across the board rather than limiting it to Four.
As previously mentioned, ad blocking falls into a legal grey area, which has led various publishers in the international market to take action against AdBlock Plus. However, Williams says that the courts have thus far found in favour of his company.
"So far so good. About a month ago the Hamburg regional court ruled that ad blocking is legal in a case brought against us by German publisher Zeit Online. We have other cases pending, but we’re confident that the basic right to surf the internet as each user sees fit will be upheld."
The problem with this argument is that most users would prefer to surf the internet without the intrusion of any ads at all. As evidenced by the fact that 45 percent of respondents said that they first downloaded ad-blocking software to "remove all ads," users clearly have an aversion to online advertising—and this isn't conducive to the revenue model that most websites rely on.
Williams says that the Adblock Plus' whitelist programme provides a means by which publishers can co-exist with ad-blocking software without annoying modern web users too much.
"First a publisher or advertiser applies to have certain ads whitelisted," Williams explains. "Next, we work with them to get their ads in line with our criteria, which we developed with our users. After the certification process the ads are whitelisted. For their part, users can choose to leave the 'Acceptable Ads' feature on or, with three clicks, turn it off."
The Adobe study showed that users are more willing to view certain ads than others—and this came with a rare instance of good news for banner ads, in that 67 percent of users said that they don't have a massive aversion to still image ads. In addition, skippable pre-rolls also rated well.
And while the Adblock Plus whitelist programme might be able to give users what they want to some degree, Kavanagh isn't convinced that the approach is practicable.
"AdBlock acting as a gate-keeper for the industry, while simultaneously making money from big publishers paying to have their ads white-listed is a contradiction in turn, and means that quality control is being determined by a for-profit company, rather than a not-for-profit trade body with industry best practice at it's core," she said last week.
Some publishers have taken this a step further by calling ad-blocking software immoral for interfering with their revenue models. But Williams takes exception to this and posits at least some of the blame on publishers for flooding the internet with ads.
"I disagree. Is it right to shame users for taking control of their screens? Or is it presumptuous to assert that advertisers own those screens? I’d say the first question gets a resounding 'no' and the second a clear 'yes'. That said, we’re now stuck with ads and need to find out a way to work with them, rather than just propagating an endless tug-of-war. Truth is, as the bottom fell out on ad revenue online, advertisers started pumping more intrusive ads onto sites. Blocking ads was a response to this, which was met with yet more intrusive ads. The solution is neither complete adblocking nor unimpeded advertising. We need a big change, but we’ll have to take baby steps to get to get there."
Williams goes on to say that the whitelist programme is designed to improve the online experience for all parties involved, but concedes that this demands collaboration.
"That’s the reason we introduced Acceptable Ads – to come up with a solution that is flexible enough to function in the current reality but encourage a better one. But we clearly can’t do it alone: a better Internet ecosystem will have to involve big advertisers, publishers and users if it’s going to work."
An alternative approach for publishers might be to charge a monthly fee for an ad-free user experience. And while the likes of Netflix, Spotify and Pandora have successfully managed to attract high subscriber numbers by offering an ad-free service at a monthly premium, the sheer number of failed paywalls indicates that a subscription model doesn't always work in the online space. Furthermore, the Adobe study also showed that only 20 percent of users would be willing to pay a monthly fee to their favourite website in return for an ad-free experience.
TV broadcasters have often said that users are happy to tolerate ads in return for a free viewing experience. However, this isn't necessarily the case in the online space. And as the growing prominence of ad blocker shows, technology is again changing rules that traditional media entities have always relied on.
Here's the full report by Adobe and PageFair: