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November 2013
The Ad Blocking Backlash

AdTrap et al.: Holy Grail of the Internet or Death Knell of Free Content

 

In this age of technology disruption, a fierce battle is brewing over Internet advertising and ad blocking that may transform the Internet and marketing into yet another iteration.

 

Ad filtering has existed for a number of years, initially introduced in protection software from companies such as McAfee and Symantec. Ad blocking, or the use of tools (software or hardware) to automatically remove most forms of advertising from Web pages—banner ads, text ads, sponsored links, sponsored stories, pop-ups and even video pre-roll ads on Facebook and YouTube—is a somewhat more recent phenomenon, rapidly gaining popularity.

 

To users, the benefits of ad blocking include quicker loading and cleaner looking Web pages free from advertisements, lower resource waste (bandwidth, CPU, memory, etc.), and privacy benefits gained through the exclusion of the tracking and profiling systems of ad delivery platforms. Blocking ads can also save minimal amounts of energy. Users who pay for total transferred bandwidth (pay-for-usage connections), including most mobile users, also benefit financially from blocking ads before they are loaded.

 

For advertisers, the ability to automatically render paid placements invisible without so much as an acknowledgement of being seen (no analytics generated), renders ineffective the principal benefit of digital advertising in the first place, arguably gutting its continuing popularity.

 

For businesses, online advertisements can be an important source of revenue. For online businesses, ad blocking directly damages the business model they depend upon for revenue, including popular ones like Facebook and Twitter. In some cases, it can even threaten their continued existence, and thus the cry that ad blocking may be the death knell to the otherwise free content available. Rather than let ad-free surfers use valuable resources without indirectly “paying” in the form of viewing ads, a few publishers have gone so far as to reject ad blocking visitors, but that has not been a satisfactory solution.

 

If widely embraced, ad blocking might actually have some unintended consequences for Web surfers. By rejecting anything that is easily identified as an advertisement, ad blocking software actually encourages more aggressive forms of generating revenue. If legitimate advertising is eliminated, content sites will feel the pressure to sacrifice editorial integrity by using artfully constructed advertorials, charge subscription fees for content…or be forced out of business.

 

Ad Blocking Tools

 

Ad blocking can be accomplished in a number of different ways. The most common method, browser integration, enables users to block ads by installing an appropriate Web browser extension. Extensions exist for all major Web browsers—Firefox, Chrome, Safari, Opera, Bing, Internet Explorer, etc., as well as Android and iOS—and are free, fast, and easy to install.

 

The most popular extensions are AdBlock and Adblock Plus (unrelated). AdBlock claims 80 million total downloads and 20 million regular users per week. Adblock Plus is the most downloaded browser extension—its downloads on Firefox alone grew from 100 million in 2011 to 200 million as of April 2013, a compound yearly growth rate of approximately 35 percent.

 

Both AdBlock and Adblock Plus, as well as most other ad-eradicating extensions, block ads automatically, but enable the user to allow ads by whitelisting designated pages or domains—like Google search results pages.

 

In an ironic twist, AdBlock has begun a crowdfunding campaign to raise money to fund online ads to tell people how to block online ads with their AdBlock tool! After just one month, AdBlock had already surpassed its goal of $50,000 at the beginning of September, which it indicated was enough to enable it to not only post online ads but also get space on a Times Square billboard.

 

Enter AdTrap

 

CNN Tech touted it as “The device that could change the Internet,” saying that the invention is either “a step forward for the Internet—or a death knell for free content.”

 

They were referring to Chad Russell and Charles Butkus’ invention called the AdTrap, which intercepts online advertisements before they reach any devices that access your Internet connection, allowing you to surf the Web—even stream videos—without ads.

 

Russell says his inspiration for the contraption came during a conversation about the early days of the Internet, which he describes as “just page, text and pictures—and that’s it.” Using the slogan, “The Internet is yours again,” Russell and Butkus wanted to recreate the Web-browsing experience with zero ads.

 

As opposed to ad blocking Web browser extensions, AdTrap is a piece of hardware created for the purpose of blocking ads across all devices, all platforms, and all browsers. So, rather than being limited to the particular device (desktop, laptop, tablet, phone) or specific browser, AdTrap, by comparison, works across every device connected to your network, including those across WiFi.

 

Russell and Butkus started AdTrap as a Kickstarter crowdfunding campaign early this year, generating interest and enthusiasm for the product idea and soliciting funds for its production.

 

In the course of 30 days, the AdTrap Kickstarter campaign garnered in excess of $210,000, more than the $150,000 they were asking for. Production began over the summer and devices started shipping out in August.

 

AdTrap is a white rectangular box that is lightweight and about the size of a wireless router and sits between your modem and router. It currently sells for $139 at www.getadtrap.com and more than 10,000 units have been sold.

 

It takes only a few minutes to set up (you can watch on video) and works on most sites including YouTube, and Russell says “blocks about 98 percent of online ads.” (There are a couple of sites that they are working on solutions for, but that will be an ongoing project.)

 

AdTrap can be easily configured from a Web browser. Like online ad-cleansing tools, it also allows users to whitelist pages and domains where they still want to allow ads to be seen.

 

Says Russell says of his success, “I think it speaks to the mindset of people right now of their experience on the Internet…At some point, it’s gotten a bit much.”

 

Ad Blocking Going Mainstream

PageFair, a service that allows website owners to measure how many of their visitors block ads, issued a recent report on how ad blocking is threatening the business model of online publishers. Their data shows that ad blocking is being rapidly adopted by consumers, and in fact, becoming “mainstream.”

 

Based on measurements taken from hundreds of websites, they show that up to 30 percent of Web visitors are blocking ads, and that the number of ad blocking users is growing at an astonishing 43 percent per year, which if it were to continue unabated, would reach 100 percent by 2018. They estimate that a typical client with a 25 percent block rate loses about $500,000 a year due to ad blockers. They acknowledge, “The scale of revenue loss can be fatal.”

 

Not surprisingly, websites where ads are most often blocked tend to cater to the technologically savvy: Gaming sites had their ads blocked by one of every three visitors, technology sites by one of every four. For travel websites, by contrast, the figure was only five percent.

 

There’s a similar variation depending on which browsers people are using. Mozilla Firefox, a favorite of techies, heads up the list; over 35 percent of those who use it have installed an ad blocker. Google’s Chrome browser is not very far behind with over 30 percent. By contrast, only one percent of Internet Explorer users block ads.

 

The demand for ad blocking technology continues to increase. With AdTrap able to block ads on all Internet-enabled devices at one time, that may up the ante.

 

AdTrap founders Russell and Butkus have already engaged legal counsel in case advertisers get feisty. YouTube and Facebook, for example, depend on advertisements to generate the bulk of their revenue and could stand to lose billions of dollars and even shut down if they don’t adapt quickly.

 

Good or bad, this product could have massive implications for the near future of the Internet. We will see if ad-based businesses will be able to sustain themselves or if the news sites and small-time bloggers likewise sustain themselves without advertisements for income. Who knows, maybe AdTrap will single-handedly bring back balance to the Internet and create a Web 3.0!

 

For more information: www.getadtrap.com, www.getadblock.com, www.adblockplus.org, www.pagefair.com.

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