According to a 2014 report by Adobe and Page Fair, nearly 150 million internet users browse the web using ad blocking software, a 70 percent increase compared to 2013. It is safe to say, that ad blocking software is on the rise, and poses a serious problem for internet and media companies who have built their businesses on advertising revenue.
One piece of popular ad blocking software is Adblock Plus, provided by the German company Eyeo. The software was launched in 2006 and blocked all advertisements until Eyeo introduced its “Acceptable Ads” criteria in 2011. These criteria require, for instance, that ads are static, which means “no animations, sounds or similar.” Ads that meet the criteria can be whitelisted. By default these ads will pass Adblock Plus’ filters. So even though Adblock Plus initially turned your browser into an impregnable fortress protecting you from any ads, the software now acts as gatekeeper, allowing in some ads and keeping out others.
While ad blocking technology may put power back into users’ hands, Eyeo’s policies have also turned the software maker into a powerful intermediary in the business of ad-delivery. Or as Eyeo puts it: “We find ourselves uniquely positioned to broker a compromise that makes the Internet better for all parties.”
Eyeo makes good use of its intermediary position. Robert Cookson of the Financial Times reported that Amazon, Google and Microsoft have paid Eyeo to be whitelisted. While whitelisting is free for smaller websites, Eyeo charges larger companies “to make the initiative sustainable.” The tech companies thus effectively share with Eyeo the advertising profits they would lose if ads on their websites were blocked. From the Financial Times we learn that Eyeo asks for a fee that depends on the revenue made from unblocked ads:
“One digital media company, which asked not to be named, said Eyeo had asked for a fee equivalent to 30 per cent of the additional ad revenues that it would make from being unblocked.”
Entering Adblock Plus’ whitelist through the backdoor
Trying to be whitelisted is only one way to deal with ad blocking software. Some companies have sued Eyeo for their business practices (here and here). Others kindly ask their users to turn off their ad blocking software. Or they ask you to pay a small amount of money in exchange for an ad-free experience. Hardliners even block access to their content if you don’t turn off your ad blocker.
With ad blocking software on the rise, it is not surprising that Amazon, Google and Microsoft had to do something. But why did they choose to pay to be whitelisted by Eyeo? It could be that these companies have accepted that there is no effective way to stop ad blocking. Rather than fighting ad blocking, the companies decided to enter Adblock Plus’ whitelist through the backdoor. If you can’t beat them, then silently join them. This strategy allows the tech companies to still make profits from selling advertising slots, without having to block access to their content, or bother website users with questions about their ad blocking software.
The fact that Eyeo is paid a fee for whitelisting certain web pages should make Adblock Plus users suspicious. How objective is Eyeo if it profits from allowing certain ads? Eyeo shares that the company is “paid by some larger properties that serve non-intrusive advertisements that want to participate in the Acceptable Ads initiative.” Eyeo also promises to never whitelist any ads that don’t meet the Acceptable Ads criteria, and that there is no way to buy a spot in the whitelist. The company needs the money to keep the service running, as “managing this list requires significant effort on our side and this task cannot be completely taken over by volunteers as it happens with common filter lists.” Furthermore, Eyeo reviews many applications, and needs “to proactively approach publishers and ad networks about creating Acceptable Ads.”
But I’m sure the money is not only needed to keep the Adblock Plus service running. Eyeo is not a foundation, but is a regular German company. And like most companies, Eyeo probably wants to make a profit out of its activities as well. Moreover, by making the fee dependent on the amount of revenue generated by unblocked ads, the company makes more money as it unblocks more ads. Eyeo’s revenue thus is not based on the costs it incurs, but on amount of ads it allows to pass. Transparency about the company’s whitelisting-deals and the profit it makes of those deals would make Eyeo’s story more believable.
I also assume that most users who download “Adblock Plus” think they download full-blown ad blocking software, and not the gatekeeper software that welcomes advertising on websites of companies who are willing to share profits with Eyeo. Adblock Plus advertises that it enables its users to “surf the web without annoying ads.” Annoying is used here not to boast about its ad-blocking abilities, but to indicate what the software does not do: it does not block all ads, but only those that Eyeo considers annoying.
Users who do not want to see any ads at all can set up the software’s settings accordingly. The software’s default setting is to allow “non-intrusive” ads. Users thus must actively opt-out from seeing “non-intrusive ads” to not see any ads at all. Considering that not many people change a software’s default settings (see Sunstein and Thaler’s Nudge on default options), many users wishing to disable ads in their browsers will still be served with ads from selected partners. I wonder how many Adblock Plus users are aware that the ads that are still showing are not due to Adblock Plus’ inability to block them, but are the result of negotiation process between Eyeo and big website owners. And how many users are aware that they are actually part of Eyeo’s negotiation strategies in its attempt to make money out of non-intrusive ads?
A lot of the interesting things we read, see, hear on the internet and fun stuff we do online is paid for through advertising. In that respect, Eyeo’s philosophy of not killing internet advertising and allowing non-intrusive ads may be laudable. However, by silently striking opaque whitelisting deals with companies such as Amazon, Google and Microsoft, to me Eyeo and its Adblock Plus software have lost much of their credibility.