Adblockers are Not Killing Digital Media Revenue, Complacency Is

Adblockers are Not Killing Digital Media Revenue, Complacency Is

Introduction

The consumption of media content has changed a lot over the past 150 years. From newspapers, to radio news, television, and now online media. As new forms of media come into the mix, it is inevitable that older forms of communication decline, or have to re-arrange their distribution models. As the internet has grown, the access to information has become saturated. Modern media companies are facing more challenges than ever before when it comes to monetization, and many of these companies are fretful that their tried-and-true means of revenue, advertising, has come under attack from Adblocker technology. Online advertising is an important source of revenue source of revenue for global media companies; however, current online advertisement policies are intrusive, unsafe, and warrant ad-blocking until the industry reforms its complacent policies.

The Importance of Media

Media companies provide an important societal contribution, journalists help us understand the world around us. A world without access to information would certainly be undesirable, especially since democracy requires a “free and independent press” to hold politicians accountable to their constituents. However, instead of slowing down, the internet has provided numerous alternatives to traditional news media – many of them increasing in popularity such as Youtube, Facebook, and blogging networks. Many of these companies rely on video advertisements or native advertisements that serve advertisements to viewers based on their interests. According to an article by Edward Helmore, “Google made $4.7bn in advertising from news content last year [Written 2019]” (Helmore, 2019, n.p.), it is important to note that google owns Youtube. Media continues to be important in the lives of individuals but the way that consumers interact with information has changed. While advertising revenue might be declining for some companies and models, the appetite for media content continues.

Media Companies Need Money to Survive

Advertising revenue is the backbone of the online media industry, just as it was the backbone of the traditional print media. Without advertising revenue media companies are forced to shutter as they cannot reconcile their costs with lost revenue. According to an article from Relevance, “[t]he total cost of ad blocking [was] predicted to cost publishers nearly 22 billion in 2015” (Zajechowski, 2016, n.p.). The true cost of Adblocking is impossible to confirm since ad-blocking can be hard to track as it’s on user-end. However, there is an industry consensus that, “[t]he growing loss of ad impressions is progressively undermining ad-financed websites’ capacity to monetize the provided content” (Redondo, 2018, 1607). Advertisement revenue is certainly declining both for traditional print media and for online advertisements. Without this revenue source, it is questionable how content can continue to be financed. It costs money to employ writers, staff, buildings, and develop stories. There is no question that there is need for advertisement services on media websites – or at the very least, a method of sustainable profit. If consumers of content refuse to pay for premium services, or an ad free experience, there is no alternative to the advertising method that has been successful in print and television media in the past.

Media companies see the decline of revenue and the use of adblockers by consumers as a direct assault and attack on their revenue stream. It is certainly true that adblockers stop publishers from revenue. Without revenue, there are concerns about the future sustainability of the digital media industry worldwide. An alternative to advertising revenue is a subscription-based service or paying to view an ad-free version of media sites. Unfortunately for digital publishers, “80 percent of internet users polled by Adobe said they weren’t willing to pay even a small fee to make ads disappear” (Rosenwald, 2015, n.p.). If consumers will not accept alternative methods of monetization, then the digital media is caught between a rock and a hard place – consumers do not ads, but they also do not want to pay for content.

Blocking Ad Blockers Through Legislation

While legislation in Canada, The United States, or the UK has not come into fruition, there have been aims from Germany to legislate ad-blockers, and successful legislation by the Chinese government to ban Adblockers. German courts, for their part, “never considered ad blocking software per se illegal” (Lu, 2017 790). However, this has not stopped German publishers from continuing to push for Adblocking legislation. The Chinese government was much more favourable to publishers and media company’s desire to legislate the use of ad blocking technology. In China, “the court ruled that ad-based business model is legitimate and should be protected by law” (Lu, 2017 793). This ruling itself is not controversial. Across the globe the general consensus is that content creators whether producing videos, articles, music, or other consumable content have the right to be paid for their efforts. The Chinese government used the excuse of “free competition” to ban Adblockers. Their rationale was that any business can be involved in any other, and ad-blockers are blocking the commercial activities of fellow companies. The Chinese courts tried to say that blocking ad-blockers is for the public good since the public benefits from the content produced by media companies.

The Chinese government claims to be concerned that, “without the subsidy of commercial advertisements, the freely available content would probably diminish, which ultimately harms the end users’ welfare” (Lu, 2017, 797). Simply blocking adblockers does not change consumers perception of the ad market and will likely head to users with education circumventing these ads through untraceable blockers. Even if users do not block ads after the legislation it is tough to legislate an activity that is done in the privacy of the user’s home on their own device.

Legislation that blocks ad blockers is a band aid to a problem that is much greater. For a sustainable business practice to continue growing, there must be focus on why users are blocking advertisements in the first place. Ad blockers have come as a means for internet users to protect their interests and ignoring consumer complaints and forcing them to comply or abandon your content, creators might be shocked when these “freeloaders” choose to simply go elsewhere for their information. There is also the problem that many online advertisements pay per click (PPC). These PPC views means that the consumer has to go farther than merely viewing the ad for the publisher to get revenue. Interactions such as clicking the link are required to be paid. Even if Adblockers are illegal, it is unlikely that users who were ad-blockers are going to go out of their way to click these ads.

Online Ads are Intrusive and Pose Security Risk

Publishers would have consumers believe that advertisements are little more than a minor inconvenience for accessing their content for free. Managing editor of Spiegel Online holds this position and presents the argument, “[i]magine a customer walking into a bar, ordering a daiquiri and then smugly refusing to pay for it. If you consume our content you must allow us some means of monetizing it” (Streitz and Tynan, 2016, 78). This argument relies on the presumed moral and ethical position of content consumers – nobody argues that stealing is wrong, even thieves seem understand to some degree that their actions have consequences in society. However, this position completely ignores the risks of online advertisements. It is an emotional argument to a technical problem.

Traditional print media served advertisements, as does Cable and satellite television. While many consumers dislike these practices, they are in most cases a minor inconvenience – or in the case of television, a snack break in some households. Any comparison of traditional advertisements and digital advertisements must realize that while the ethos of advertising – a way to pay for production of content, this is where the comparison must stop. Digital advertisements are nothing like television and print marketing advertisements and, “publishers seem to have totally overlooked the fact, that while print ads were relatively innocuous and unavoidable, digital ads are different. They aren’t static. They blink. They follow. They irritate” (Rosenwald, 2015, n.p.). A print advertisement does not blink, flash, and hijack your personal property through malicious Malware. While television advertisements can be annoying, viewers are always armed with the mute button, or simply walking out of the room. Advertisements in the digital age are not a break from the content – they are intertwined, and at times can even block access to the content.

Depending on the ad network that digital publishers use, intrusive software like Malware can infect the users’ computers. Publishers likely assume that their digital ad providers are screening for these potentially harmful files. However, harmful files are not the only way that consumers feel advertisements pose a risk to their personal information. Another instance is privacy as, “[r]etargeted ads follow users across the web”, and “no matter what PR campaigns may insist – advertising based companies aren’t trustworthy data stewards” (B&T Weekly, 2018, n.p). Consumers want control of their data, and they want to know who has their information.

Advertising standards and policies make it harder for consumers to know who is watching their computer viewing use – and many people are rightfully concerned about the use of tracking internet usage. It should not be surprising with security and data concerns that, “consumers who have higher incomes, are employed, and have more education are also more likely— by 200-400 percent to be heavy ad blockers” (Stewart, 2018, n.p.). Consumers with the resources to understand these practices are blocking advertisements. Ad blockers are easy to install and understand, and yet, this suggests that there is more at play than users blocking simply due to annoyance. An uneducated or lower-income user would not have trouble typing “block ads” in the Google search engine, where they would immediately see the option to download the Ad blocker plugin. Two or three more clicks and ads would be gone.

Advertising Changing Global Perspectives

Advertisements are not innocent means of obtaining revenue. By their very nature, advertisements play a role in global communication. Websites are not just serving advertisements to their local markets – they are serving advertisements worldwide, often-times in markets that would not otherwise have exposure to brands. Advertising attempts to change how people, “look, think, and act” (McPhail, 2014, 17). Eventually these masks become invisible and, “eventually, even subtly, we begin to act out, dress, or speak differently as we consume input from the mass media rather than from family, community, or former friends” (McPhail, 2014, 17). The lack of relevant advertising for consumers is a problem on its own.

Most of the world’s global media is concentrated through conglomerates such as companies that are bought and owned by larger parent companies. Mergers are very common in the media industry, and concentration of media is then concentrated between a small number of competitors who bought out the numerous smaller competition; these mergers are ignorant of cultural/physical nation-state boundaries. One significant example of this is Rupert Murdoch of Australia who owns Fox News, The Wall Street Journal, and The Times of London (as well as numerous others) under his NewsCorp umbrella. This is tremendous power, especially when we consider that, “[t]he major global ad agencies are all based in core nations” (McPhail, 2013, 285). Advertising is a source of tremendous power.

Media Companies and Those Who Serve ads are Complacent

Companies would likely say that – yes, there’s always risks on the internet – but not from their websites! Reputable companies provide reputable advertisements, and you can trust them if you turn off your adblockers to consume their content. In reality, this has been proven to be untrue.

The case of media-company Forbes is particularly interesting when it comes to ad blockers. Forbes, like other media companies, has used a pop-up on their website practically begging consumers to turn off their ad-blockers to consume their content. In-fact, Forbes does not allow users to by-pass this message without turning their ad-blockers off. If consumers want to view Forbes, they must view advertisements served from a third-party service. On the surface, this appears to be a company taking their revenue and survival into their own hands. Owning and maintaining a media site takes numerous resources – both technologically on the server, and through infrastructure, staffing, and numerous other considerations. There is nothing free about content production.

On January 4th, Brian Baskin, a security researcher tweeted about Forbes and their ad-blocker message. His tweet read, “The @Forbes website held content until I disabled Ad Blocker. I did so and was immediately given pop-under Malware” (Baskin, via Patrizio, 2016, n.p.). According to Patrizio, “Forbes, DailyMotion, MSN, Yahoo, … [and] The Daily Mail” were all hit with malware in a “short period of time” (Patrizio, 2016, n.p.). Forbes is certainly not the only company to blame, but that does not make them innocent for their advertisement practices.

Advertising services in print media and television went through many channels. These industries have such a long history of being reputable that shows such as Mad Men have been created to showcase the revolutionary and important value of the advertising agent. We are unlikely to view digital advertisers the same way – it is the wild west. Can you identify who served the advertisement for the watch you just viewed? Advertisements on the internet automated in many ways. While some ad networks like Google’s Ad Sense claim to have scrutinous advertising policies, they are not the only companies serving advertisements and many companies do not desire their low pay-out rates.

In the past, companies would have relationships with advertisers. At the very least they would know who was in charge of serving them advertisements that they would then pass onto their consumer. Magazines like Vogue would have balked at allowing an advertisement to be printed on their pages without ensuring that it was relevant and engaging to their user. Companies in the modern digital era seem completely disengaged from the process – they sign up for advertisement networks and allow them to serve third party ads. So long as the revenue keeps on flowing there is no need to question the process. Online advertising is an automated process that leads to companies being passive and complacent about the revenue stream they claim to be the most important part of their profitability.

Advertising Requires Industry Reform

Companies are quick to blame thoughtless consumers, thieves in their eyes, for the spread of Adblocker technology, but with “198 million people globally … now blocking ads” (Rosenwald, 2015, n.p.), are we willing to brand nearly 200 million people across the globe as thieves? It is more likely that the adverting industry itself has its work cut out for itself in gaining the trust of worldwide users? When consumers interact with businesses differently, it is usually up to the business to change its means of production. The newspaper industry could not get angry at customers moving to radio – and then television for their platform of choice. Instead, it was up to the newspaper industry to continue to evolve and understand the needs of modern consumers. Change is at the heart of all media evolution.

The current state of advertising in digital media is not sustainable and, “[o]nline publishers have faced numerous financial challenged in recent years” (Herman, 2016, n.p.). While some publishers like those in Germany or China might look to the government for legislation to back the current model, they are playing a losing game. Forcing consumers to view advertisements will not stop consumers from loathing advertisements. For too long the industry has relied on advertising revenue without seriously considering the ethics and implications of their behavior. Advertisements are more than just a revenue stream and, “[e]xposing consumers to highly disturbing advertising formats have been detrimental in terms of consumers’ lack of control, physiological stress, [and] violation of freedom” (Belanche, 2019, 690). It is not mere annoyance that causes consumers to avoid advertisements, it is a systematic problem that has not been taken seriously enough by its offenders, who only see their loss of revenue.

One important way that media companies can reform their advertisement strategies is to use Native ad placements. Unlike normal ads, “consumers are also far more likely to share native ads than they are to share banner ads, and they view native ads more frequently than banner ads” (Zajechowski, 2016, n.p). Native advertisements rely on serving ads such as related articles or products that are relevant to the website. For example, a website about sound and music would display advertisements for concert tickets, headphones, and speakers. Instead of being intrusive, native advertisements are specially-selected and fit in with the content – much like traditional magazines like Vogue showing advertisements for makeup, clothes, and other targeted material. Native ads are less intrusive and more helpful, as they seem to say, “I know you like _____, so maybe you’d be interested in _____”.

Legislation of adblockers or changing consumer behaviours is not an answer to the current state of advertisements. In-fact, “[o]ld technologies and business models have unceasingly faced destruction by competition and technological innovation” (Lu, 2017, 799). Adblockers are a technology that has been created and adopted because it serves the interests of the greater public. It is up to the news industry to adapt and come up with creative solutions in order to maintain their status in society. While it is certainly important to still have media, the internet is only growing, and perhaps it is time to reconsider the traditional structures of communication particularly with the advancement of blogging platforms and social media. Uncomfortably for traditional media systems, information is now accessible and often comes with the expectation of free. No amount of legislation or circumventing ad blockers can change this new reality – only solutions such as native advertisements or new creative solutions can help. It is a case true of all evolution – media companies must adapt or die.

Conclusion

The internet has led to more changes than publishers wish to admit. The writing is on the wall for traditional ad structures, and yet, publishers are continuing to try covering a bullet hole with a Band-Aid. Even worse, publishers seem totally blind to the arguments against their advertising methods, insisting that there is no viable alternative. Instead of taking this lying down, the consumer has turned to Adblocker technology which was developed as a response to the outright complacency shown from digital media companies who want consumers to consume their advertisements despite lack of over-sight, security risks, and total annoyance. Consumers are right to be concerned about advertisements tracking them and serving irrelevant advertisements that focus on creating more wealth for core nations. No amount of legislation can save media companies from the truth – freedom of information to many people includes freedom from their data being tracked and slimy sales-pitches. Consumers are willing to avoid these practices at all costs, and until the industry catches up and innovates new sources of revenue, the blame should not be placed on the user who is merely protecting his own interests against bad practices.

 

References

Barthel, Michael. “5 Key Takeaways about the State of the News Media in 2018.” Pew Research Center, Pew Research Center, 23 July 2019, www.pewresearch.org/fact-tank/2019/07/23/key-takeaways-state-of-the-news-media-2018/.

B & T Weekly. “Why Consumers Block Your Advertising.” B & T Weekly, N/a, 2018.

Belanche, Daniel. “Ethical Limits to the Intrusiveness of Online Advertising Formats: A Critical Review of Better Ads Standards.” Journal of Marketing Communications, vol. 25, no. 7, 2019, pp. 685–701., doi:10.1080/13527266.2018.1562485.

Herrman, John. “Media Websites Battle Faltering Ad Revenue and Traffic.” The New York Times, The New York Times, 18 Apr. 2016, www.nytimes.com/2016/04/18/business/media-websites-battle-falteringad-revenue-and-traffic.html.

Helmore, Edward. “Google Made $4.7bn from News Sites in 2018, Study Claims.” The Guardian, Guardian News and Media, 10 June 2019, www.theguardian.com/technology/2019/jun/10/google-news-revenue-2018-new-study.

Lu, Bingbin. “The Unique Chinese Legal Approach to Online Ad Blocking: Is It in the Right Direction?” Computer Law & Security Review: The International Journal of Technology Law and Practice, vol. 33, no. 6, 2017, pp. 786–801., doi:10.1016/j.clsr.2017.05.012.

McPhail, Thomas. L., Global Communication: Theories, Stakeholders, and Trends. Wiley Blackwell: Hoboken. 2014. Print.

Patrizio, Andy. “How Forbes Inadvertently Proved the Anti-Malware Value of Ad Blockers.” Network World, 11 Jan. 2016, www.networkworld.com/article/3021113/forbes-malware-ad-blocker-advertisements.html.

Redondo, Ignacio, and Gloria Aznar. “To Use or Not to Use Ad Blockers? The Roles of Knowledge of Ad Blockers and Attitude Toward Online Advertising.” Telematics and Informatics, vol. 35, no. 6, 2018, pp. 1607–1616., doi:10.1016/j.tele.2018.04.008.

Rosenwald, Michael. “The Digital Media Industry Needs to React to Ad Blockers … or Else.” Columbia Journalism Review, Oct. 2015, www.cjr.org/business_of_news/will_ad_blockers_kill_the_digital_media_industry.php.

Sridhar, Shrihari, and Srinivasaraghavan Sriram. “Is Online Newspaper Advertising Cannibalizing Print Advertising?” Quantitative Marketing and Economics : Qme, vol. 13, no. 4, 2015, pp. 283–318., doi:10.1007/s11129-015-9160-3.

Stewart, Duncan (3 April 2018). “Are Consumers ‘Adlergic’? A Look at Ad-Blocking Habits”The Wall Street Journal.

Streitz, Matthias, and Richard Tynan. “Are Ad-Blockers Killing the Media? Speigel Online’s Matthias Streitz in a Head-To-Head Debate with Privacy International’s Richard Tynan.” Index on Censorship, vol. 45, no. 2, 2016.

Zajechowski, Matthew (November 2016). “Ad Blocking and Its Effects on Advertisers and Publishers”Relevancelter

 

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