Ad Blocking: What’s The Future of Web Revenue

Read anything good on the web lately?

Perhaps you’ve noticed the abundance of online advertising out there.

Although web researchers have been warning us about “banner blindness” since 1998, advertising has been a viable revenue model since the dawn of the web.

Recently, a series of events have reminded online publishers of the looming probability that ad revenue may be an endangered species.

A Brief History of Ad Revenue

Many digital empires have been built on the pillars of trading tracking information for online content, and trading ad clicks for money.

Internet behemoths Google and Yahoo were built on the ability to deliver targeted ads to consumers.

For many years, media and content publishers have been able to generate supplemental income from placing ads on their site. Today, there are hundreds of web and mobile advertising networks, serving ads to site vistors, paying the hosting sites for clicks.

The Game Is About To Change

Earlier this week, the mobile ad blocking app, Peace, was the best seller in the App Store for about 36 hours. Developer Marco Arment then pulled the app, stating “Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit.”

Arment elaborated, “I still believe that ad blockers are necessary today, and I still think Ghostery is the best one, but I’ve learned over the last few crazy days that I don’t feel good making one and being the arbiter of what’s blocked.”

What’s interesting to some people is the fact that this type of software is enabled on the recent iOS9 upgrade.

Some believe this is an attempt by Apple to force online publishers into their Newstand app (which cannot be deleted), in which ads are also, oddly enough, unblockable.

This would also simultaneously hurt Apple’s competitor, Google, by blocking their ads. Google is the largest server of ads on the web.

Journalist Nilay Patel writes that what’s happening is a war for proprietary platforms.

Patel states, “Google has the web, Facebook has its app, and Apple has the iPhone. This is the newest and biggest war in tech going today.”.

What’s unfortunate is that there are millions of independent publishers that depend on ad revenue to continue publishing. Servers and bandwidth cost money, and mismanaged success can be a bigger drain on a company’s resources than remaining obscure.

But the allure of an ad-free internet is Pandora’s Box. Once people get a taste of it, they won’t want to go back, if they can help it.

How To Make Money On The Internet

Ad blockers have been around for years, and yet advertisers keep finding ways to serve ads. This will always be a battle that keeps morphing into different forms.

In the present day however, if most content sites had 75 to 85% of their ads blocked, they would have to find a new revenue model (quickly) or shutter operations.

Many successful independent publishers advocate visitors to only frequent sites that serve no ads or serve them in a respectful manner.

If you hate advertising, don't read/view ad-supported media. Stop offloading your responsibility and follow through on your beliefs.

— Jason Kottke (@jkottke) September 17, 2015

Most consumers just want to read or watch things on the web. They won’t keep a tally of which sites bombard them with ads (most of the web), and which ones don’t. Nor should they be burdened with that responsibility.

@jkottke @BenedictEvans My beliefs are not: when someone puts something into the world for free, I'm then obligated to do what they want.

— SantoriniDave (@SantoriniDave) September 19, 2015

So what are the options if you’re a content publisher, and you don’t want to see your revenue disappear, now or in the near future?

Do Paywalls Work?

The trick to making paywalls work seems to be producing very high quality content, and having a strong consumer base before implementing the paywall. For most online publishers, paywalls are not the all-inclusive answer.

Some newspapers, like the New York Times and Wall Street Journal, have successfully created a paywall revenue stream. Other online publishers with specialized, highly differentiated information like the Financial Times, Bloomberg Network, or Harvard Business Review also implement paywalls. Some of these are “hard” paywalls, while others are metered.

Services like Spotify offer you a choice of paying for a subscription, or being served ads with tracking information.

Do Subscriptions Work/

Subscriptions can work for independent publishers if they have certain things in place.

The publisher must have specialized knowledge or insight on a subject. They must have established some credibility in the community they are writing for. They must have high production values. The price must make sense to the subscribers.

In the WordPress community, Brian Krogsgard has been able to make the Post Status membership work. He offers annual memberships at the $99 level, and patronages at the $365 level.

Whitelisting Respectful Advertising

The Deck is an ad network that places one solitary ad in partner pages. Carbon Ads does something very similar.

The idea is to make ads less intrusive, and more tastefully done. The downside is that these ad networks are centered around design, development, and web culture, and selective about their partners and their advertisers. While these two ad networks are on to something good here, their solution will only work for a very specific niche.

The ad blocker Ghostery allows you to white-list ad networks, thereby rewarding publishers who use those networks by not cutting off their ad revenue.

The issue is, this is not a viable solution for the majority of publishers. Many sites use content blockers in order to force site vistors to see ads, otherwise they can’t access the content that they came to the page for in the first place.

Challenges Going Forward

The problem is that most of us now expect information to be free. If we’re going to pay for something with money, we have to see a lot of value in it.

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But as Seth Godin writes:

And advertisers have had fifteen years to show self restraint. They’ve had the chance to not secretly track people, set cookies for their own benefit, insert popunders and popovers and poparounds, and mostly, deliver us ads we actually want to see.

…Ad blockers undermine a fundamental principle of media, one that goes back a hundred years: Free content in exchange for attention. The thing is, the FCC kept the ad part in check with TV, and paper costs did the same thing for magazines and newspapers. But on the web, more and more people have come to believe that the deal doesn’t work, and so they’re unilaterally abrogating it. They don’t miss the ads, and they don’t miss the snooping of their data.

This reinforces the fundamental building blocks of growth today:

The best marketing isn’t advertising, ’s a well-designed and remarkable product.

The best way to contact your users is by earning the privilege to contact them, over time.

Seth Godin, “Ad Blocking”

User experience designer Jared Spool adds:

1/Ad blocking isn’t all or nothing. Ad blockers can use a white list of publishers (either user-made or editor-made) to let ads thru.

— Jared Spool (@jmspool) September 19, 2015

2/Ad blockers could only block ads that use certain techniques, like privacy-invading retargeting ads.

— Jared Spool (@jmspool) September 19, 2015

3/Ad blockers could let the reader substitute an advertiser of *their* choice to be the patron of the publisher.

— Jared Spool (@jmspool) September 19, 2015

4/Ad blockers could contain a micro-payments engine that pays publisher directly from the reader for the value they deliver.

— Jared Spool (@jmspool) September 19, 2015

5/That an ad blocker was the most popular paid app for 36 hrs says the market has a strong opinion about the value of 3rd party advertising.

— Jared Spool (@jmspool) September 19, 2015

CSS innovator and web pioneer Eric Meyer reflects:

Feels like content blockers are a two-decade reset button, sending us back to 1995 when nobody was sure how to make money publishing online.

— Eric A. Meyer (@meyerweb) September 19, 2015

No question that’s scary, but it’s also an opportunity. We can look at what we got wrong in the last 20 years, and try something different.

— Eric A. Meyer (@meyerweb) September 19, 2015