Ad-blocking: Web apocalypse or stairway to heaven?

Ad-blocking: Web apocalypse or stairway to heaven?

If you’ve ever worked in publishing you know designers loathe ads because they tend to force web sites into banal, homogenous layouts based on a few arbitrary but standardized ad sizes. Much worse, however, ads tend to be distractingly ugly and, in a digital world, they literally get in the way of the content. We’re forced to overlook this offense to aesthetic purity and a zen reading experience, of course, because advertising is generally what pays our salaries.

But things are now just getting out of hand. Mobile ads increasingly obstruct the reading experience by taking over your screen, automatically playing in videos and popping up from seemingly out of nowhere. They slow down page load times, consume precious monthly data, track user behavior, wear down phone battery life and generally add friction to the mobile reading experience.

To address this, Apple recently opened Safari to ad blocking software with its September 2015 release of iOS9. And while it sounds great for users in general, industry observers fear the widespread adoption of ad blocking apps could have some profound consequences on the Web as we know it.

The underlying issue is that the economics of the Web is making advertising worthless. In “It’s the End of the Line for the Ad-Supported Web,” VentureBeat’s Dylan Tweney outlines just how supply ad inventory is to blame for the ugly ecosystem of Web advertising that we have today:

The problem is that, thanks to the law of supply and demand, the value of advertising has been steadily decreasing over the past 15 years. Advertising is sold based on impressions, or the number of times that people have seen it (or are assumed to have seen it). As web use goes up, people see more web pages, and that means publishers are delivering more impressions. As the number of impressions approaches infinity, the value of those impressions approaches zero.

As impressions rise and revenues from advertising necessarily fall, publishers are forced to try to squeeze more value out of their ad inventory, hence the rise of “ad-chocked pages” and “in-your-face advertising.” It also leads them to create dubious ideas like that of “sponsored content,” which Tweney asserts users hate because “its implicit value lies in deception.”

So just how bad is it? Pretty bad. In “The Cost of Mobile Ads on 50 News Websites,” The New York Times measured how much of the data on the top 50 news websites’ home pages represents editorial content and how much represents advertising. The results are expected but they are still surprising and makes one less sympathetic to publishers and their advertisers: over half the data on mobile home pages of the top US publishers came from ads and other content that ad blockers weed out.

And that’s a big deal, as the Times notes in a related article, “Putting Mobile Ad Blockers to the Test,” since most mobile phone carriers now have data limits and charge users for overages. In the same article, the Times tested the ad blockers to see just how much faster mobile Web home pages of those top news sites loaded and how much smartphone battery life was saved with the ad blockers activated. The load time for the most bloated site tested, boston.com, fell from a whopping 39 seconds with ads to just eight seconds without them. Similarly, the size of boston.com’s mobile home page fell 80 percent, from 19.4 megabytes to four megabytes. To take another example, the Los Angeles Times’ home page measured 5.7 megabytes and downloaded in 11 seconds with ads but weighed only 1.6 megabytes and loaded in four seconds without them.

So ad blockers must be a good thing, right? That remains to be seen. In “Welcome to hell: Apple vs. Google vs. Facebook and the slow death of the web,” Verge Editor, Nilay Patel, argues that ad blocking may very well kill the Web as we know it by forcing small publishers out of business. According to Patel, Apple’s inclusion of mobile ad blocking software is a not-so-veiled attempt to attack Google, which dominates Web advertising via its ad server and programmatic ad exchange subsidiaries. Because users increasingly engage the Web through mobile browsers and Apple’s iPhone dominates mobile Web usage, Google’s main source of income is becoming increasingly vulnerable to how Apple designs its operating system.

Patel suggests that iOS’ user experience is a carefully orchestrated attempt to move iPhone owners off the Web and into Apple’s app-driven ecosystem. In doing so, Patel believes, Apple may inadvertently lay waste to the Web itself:

And the collateral damage of that war — of Apple going after Google’s revenue platform — is going to include the Web, and in particular any small publisher on the Web that can’t invest in proprietary platform distribution, native advertising, and the type of media wining-and-dining it takes to secure favorable distribution deals on proprietary platforms. It is going to be a bloodbath of independent media.

That may be so and it sounds like a bad thing, especially if it limits innovation and access to otherwise hard-to-find niche content. But is it really such a bad thing? Maybe we just don’t need an infinite supply of Websites and pages? Maybe content and advertising would actually improve if there were less of it?

That’s the sense one gets from reading former Apple executive, Jean-Louis Gassée’s survey of the situation in “Life After Content Blocking,” in which he contemptuously labels many publisher Websites as “echo chambers:”

Too many sites are just echo chambers, they rewrite news releases, add strong adjectives and adverbs, and a bit of spin. Competition for attention, page views, and advertising dollars drives them to shout from the rooftops. If they don’t want to disappear or be rolled up into a larger entity to ‘optimize expenses’, they’ll have to get us to pay for their content.

He’s right. Surely we aren’t going to miss all this filler content. And if we do, maybe we would be willing to pay for it. Maybe. But probably not. Unfortunately, Gassée doesn’t foresee many people subscribing to Web sites, save highly specialized sites that offer higher value-added content such as analysis and not just reporting. Among these, he mentions stratechery.com and techpinions.com.

Another idea Gassée mentions is bundling content and micro-payments, something along the lines of an iTunes for news. Initially, he didn’t think this sounded very promising but the early success of the dutch app Blendle has him rethinking that opinion.

So just what does the future hold? It’s increasingly clear that news will be consumed on a tapestry of distribution channels, where a brand’s own site plays a secondary or even tertiary role. In “Why Web Pages Suck,” stratechery’s Ben Thompson augurs that publishers will be more like disembodied minds, focusing strictly on content production and pushing it via Facebook Instant Articles and Apple’s News app.

In his article, Thompson summarizes the current ad technology ecosystem makes sense for advertisers and publishers alike — if not for users. But, he claims, selling out to tech titans Facebook and Apple is a better Faustian bargain than the one that publishers currently have with ad networks, because, in the case of Facebook, it has better user data than the average ad network. Other commentators add that Facebook also has mastered user experience, blending ads seamlessly and in a far less intrusive way than do most publisher web sites. So why not have these platforms do the heavy lifting of selling and placing the ads for you?

The surprising success of the Blendle, noted by Gassée, paints a similar picture. A clear alternative to Facebook Instant and Apple News, the app appears targeted at more intentional news consumers. It bundles content from over one hundred publishers — carefully designed to emulate each brand’s look and feel — and lets users purchase stories from anywhere between 0.20 and 0.99 euros per article. After only a year, the app already has over 450,000 users in Holland alone, a number which is significantly higher than paid digital subscriptions there. Even more promising for publishers, Blendle’s user base consists mostly of millennials, who are otherwise averse to paying for content but are known to purchase music subscriptions in order to avoid ads (think Spotify).

One writer, though, doesn’t see a monolithic future ahead where news is consumed strictly on a limited number of third party platforms, in some cases, devoid of ads. In “Relax, blocking mobile ads won’t kill publishers,” noted financial journalist, Felix Salmon, argues ads will reach us no matter what and in many ways, shapes, and forms:

Brands know full well how much time we spend staring at our phones, and they will find some way to reach us there. If anything, the rise of ad blockers will help them to do that: the annoying banners we see right now are in large part a function of ad agencies which simply don’t have the time or the technical expertise to do anything better. If ad blockers mean that better-designed ads end up reaching more people, then you can be sure that ads will start getting better quite quickly.

According to Salmon, before there is any sort of mobile Web armageddon precipitated by users downloading ad-blocking en masse, the publishing-ad industry axis will find a way to get back to some sort of acceptable UX/ad equilibrium. This may mean a variety of things: from more and more firms paying to be whitelisted by ad blocking software, to publishers doubling down on so-called “native ads,” aka sponsored content, and businesses spending on in-app ad placements.

Even though it has a lot of detractors and sometimes is blocked by ad-busting apps, native advertising may hold some promise for smaller publishers. “Sponsored content,” as it is popularly known, is naturally more aligned with a brand’s user experience and spending on the format is projected to double in just three years, from $4.3 billion in 2015 to $8.8 billion in 2018. Gawker Media, an online media and celebrity blog network finds that native ads work well for its millennial audience. Its native ad click-through-rates are as high as 2 percent, with users spending an average of two-and-a-half minutes per post. These figures compare favorably with the average of three and a half minutes users spend on regular editorial content across the network’s sites. Better yet, compare that to the paltry average click-through rate (CTR) for banner ads of 0.06 percent. Beyond the ads themselves, Gawker is also able to monetize product referrals to the tune of $10 million per year and expects that figure to grow 50 percent in 2016, according to Digiday.

The reality is likely to be some combination of all of these ideas. What seems certain though is that the threat of ad-blocking will lead publishers to become less reliant on the standard IAB ad package — leading to innovation both in terms of ad formats and creativity — and to rely on additional distribution models. Some sites may not survive the transition but perhaps they aren’t adding enough value in the first place. There may be fewer but better ads and content. And this future doesn’t sound so bad.