Saturday, September 19, 2015

The Ad Blocking Controversy, Explained


 
The internet is suddenly awash in commentary about ad blocking and ad blockers. 

The genre that reached its apogee in Casey Johnston's ad blocker thinkpiece for The Awl— which was, in turn, inspired by things like Marco Arment's commentary on the ethics of ad blockingMatthew Ingram's publisher-blaming commentary, an ongoing series of articles on the subject by Jean Louis-Gassé that has been published at his Monday Note blog for months now, Ben Thompson's "Why Web Pages Suck," and Nilay Patel's "The Mobile Web Sucks" (and even more ominously "Welcome to Hell").

The dispute is about software. Specifically about "extensions" that can be added to (some) web browsers and about JavaScript that runs as part of (some) web ads. It's a discussion that's been running for a long time, but has kicked into overdrive because of Apple's release of a new operating system for iPhones and the launch of new services like Facebook Instant Articles and Apple News. And it's something you'll be hearing more and more about if you read things online, because it touches on something very near and dear to every online writer's heart — whether we can make money publishing on the internet, and the sneaking suspicion that the reasonably journalist-friendly economic climate of the past two or three years may be a mirage.

Apple's iOS 9 will allow ad blockers on mobile Safari

Desktop web browsers — Firefox, Chrome, Safari, and Internet Explorer — have long made it possible to install browser extensions that give your browser additional capabilities. One popular class of extensions: various forms of "ad blockers," which attempt to sift through the code of the sites you are browsing and prevent the ads from loading.
In principle, the makers of these browsers could include ad-blocking functionality out of the box — and even enable it by default.

Indeed, that's already happened once in the past. Once upon a time, the internet advertising landscape was littered with "pop-up" ads that would automatically spawn a new window when you browsed to a site. That led to the creation of pop-up blockers; eventually, pop-up blocking became a stock feature on most modern web browsers. But desktop browser makers have not chosen to do this to block all ads — so while ad blocking software is popular among some power users, it's a decidedly niche marketplace.

It also doesn't exist at all on Apple's iPhones and other iOS devices, because you can't use browser extensions on Apple's mobile Safari. Not, that is, until iOS 9, the latest iteration of the operating system, which does allow for selective-content-blocking extensions. This feature was previewed to developers months ago, and the developers have been plugging away at creating extensions that will work with iOS 9.
Ad blocking is getting more attention, fundamentally, because people think that Apple's move is going to make it a lot more mainstream.

Technological change doesn't alter ad spending

Interestingly, evidence from past technological shifts suggests that whatever happens with ad blocking technology, it is unlikely to alter the total amount of money spent on advertising. The media industry has changed a great deal since the 1940s. Broadcast television became a thing. It went color. Cable TV was invented. It went digital. Terrestrial radio declined without vanishing. Newspapers boomed and then busted. The internet came around. And all this technological change was deeply intertwined with the advertising industry.
But as Eric Chemi showed in a fascinating Bloomberg article last year, aggregate advertising spending barely budged at all:


This means that there is a zero-sum element to change in the advertising industry. The rise of new media does not expand the total pie — it grabs a bigger slice away from old media. Ad spending stays consistent at 1 to 2 percent of GDP, no matter what.
Conversely, if content blockers render a whole class of ad spending ineffective, the spending won't vanish — it will pop up someplace else. So to the extent that ad blocking is bad for some ad-supported companies, it will be good for some other companies.
The big question is who will win and who will lose. Three big shifts seem likely:
  • A shift away from programmatic display ads in favor of "native" ads.
  • A shift away from mid-sized publications, in favor of publications that are either big enough to support a sophisticated sales operation or small enough to have low revenue needs.
  • A shift away from the web into mobile app platforms that can provide a more controlled experience.

The rise of "native" ads

Conceptually, an ad is basically something you publish because somebody paid you money to publish it. Ad blocking software can identify ad networks, and block certain kinds of advertising scripts, but it can't read minds and discern why a given story was published. Consequently, forms of advertising that fit natively into the editorial content stream should be immune to ad blocking.
John Gruber's Daring Fireball is a very successful one-man operation that will likelybenefit. Take this post from his site, for example:


From the perspective of ad blocking software, this doesn't look like an ad, it just looks like a regular post. The subject of the post just happens to be Igloo and the virtues of their product, and the reason the post appears is because of a monetary transaction. In other words, it's an ad. But no ad blocker is going to block it.
This is a small-scale version of what larger media companies have taken to calling "native" advertising — advertising that appears in line with editorial content and is formatted to closely resemble editorial content, albeit with clear labeling. In this case it's a weekly "thank you" note from the author of the blog to the sponsor of the week.
Native ad campaigns — usually slicker than the Daring Fireball ones with higher production values (see, e.g., this recent Vox Creative campaign for Walmart) — have been the big trend in the industry for a couple of years now, and ad blocking would only accelerate that trend.

Mid-sized publishers will probably lose out

The bulk of modern programmatic advertising is heavily dependent on computer software. When your browser loads a site it activates various "trackers" that attempt to ascertain who you are and what kind of advertisers might want to reach you. This is why, when I was shopping for a lamp recently, suddenly my web experience was dominated by lamp ads.
Critics often find this kind of tracking creepy but programmatic ad selling, despite perennial complaints about invasions of privacy and the low rates it pays, is a godsend to smaller operations because it drastically reduces the need for sales overhead. It has allowed small editorial teams to focus on growing and cultivating their audience, while monetization happens largely in the background.
"Adblocker is brutal for us," Nicole Cliffe, co-founder and co-editor of The Toast, toldCasey Johnson for her ad blocking piece in The Awl. At the Awl itself, according to Johnson's article, 75-85 percent of all revenue comes from streams that are susceptible to ad blocking.

Content (and ads) may flee to the apps

If you do a lot of your reading by following the Snapchat Discover channels published daily by CNN, ESPN, Cosmopolitan, Mashable, and others, then ad blocking software isn't going to change your life very much. You view those channels using your Snapchat app, not using a web browser, so browser extensions don't accomplish anything for you. By the same token, publishers with Discover channels can monetize to their heart's content without fear of ad blockers.
Apple News, which launched with iOS 9 right alongside the new mobile ad blocking powers, is another example of a browser-free mode of content consumption. Apple is going to serve ads from inside the News app, and there'll be no blocking there.
Nor does ad blocking software affect the newsfeed inside your Facebook app. And Facebook is rolling out a product it calls "instant" articles, basically articles that you will read without ever leaving your Facebook app. Back in the early summer many smart observers (including Vox.com editor in chief Ezra Klein) saw this kind of distribution to app-based platforms as the future of media even without dwelling on the possible effect of browser ad blocking.
But to the extent that the more open nature of web browsing turns the browser experience into one that's difficult to monetize, that trend will only accelerate. Instead of digital media brands being companies that build websites, they will operate more like television studios — bringing together teams that collaborate on the creation of content, which is then distributed through diverse channels that are not themselves controlled by the studio.
This may or may not work as a sustainable business model, but it also raises fundamental questions about power.
"These larger firms will insist on calling these relationships 'partnerships,'" John Herrman writes, "but they will be nothing of the sort." Platform-owning technology companies will systematically hold the upper hand in negotiations. That most immediately implicates media companies' business models and content strategies, but, more broadly, it raises questions about freedom of speech and the nature of the public sphere.

Ad blocking fans see blocking as a moral imperative

These various trends have sparked a fierce and moralistic argument about the ethics of ad blocking. Marco Arment, the developer of one of the most popular mobile ad blockers, wrote that ad blocking wassomething like a moral imperative:
Web ads are dramatically different from prior ad media, though — rather than just being printed on paper or inserted into a broadcast, web ads are software. They run arbitrary code on your computer, which can (and usually does) collect and send data about you and your behavior back to the advertisers and publishers. And there’s so much consolidation amongst ad networks and analytics providers that they can easily track your behavior across multiple sites, building a creepily accurate and deep profile of your personal information and private business 
All of that tracking and data collection is done without your knowledge, and — critically — without your consent. Because of how the web and web browsers work, the involuntary data collection starts if you simply follow a link. There’s no opportunity for disclosure, negotiation, or reconsideration. By following any link, you unwittingly opt into whatever the target site, and any number of embedded scripts from other sites and tracking networks, wants to collect, track, analyze, and sell about you.
Similarly, Gruber argues that his approach to advertising isn't just a savvy business strategy — it's an important stance in favor of readers:
I see the fact that Daring Fireball’s revenue streams should remain unaffected by Safari content-blocking as affirmation that my choices over the last decade have been correct: that I should put my readers’ interests first, and only publish the sort of ads and sponsorships that I myself would want to be served, even if that means leaving (significant) amounts of money on the table along the way.
These arguments seem a bit like post hoc rationalizations. When people DVR television shows, they normally fast forward past the ads. Television ads don't involve intrusive JavaScript trackers, or have problematic consequences for battery life. People skip the ads (at least I do) because it is technically possible to skip the ads, because I don't particularly want to see the ads, and because I don't believe my personal decision about whether or not to watch the ads is going to make or break the show. I do that even though I work for an advertising-dependent website, and even though my father is a writer for an advertising-dependent show on NBC.
People block ads because they can, and if they can block more ads they will.

Critics see ad blocking as deeply unethical

On the flip side, critics of ad blocking see a plot to destroy the underlying revenue stream of beloved publications.
On the flip side, critics of ad blocking see a plot to destroy the underlying revenue stream of beloved publications.

"Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways," he writes, "they also hurt some, including many who don't deserve the hit."

In truth, however, the shift toward native advertising and toward partner platforms rather than websites was under way well before Apple announced the arrival of mobile ad blocking on iOS 9. It's plausible that very few people will actually bother to install ad blockers, but even if that happens the basic trend will remain the same. Advertisers will pay for more native campaigns, and readers will prefer app-based experiences that can deliver faster load times and a smoother user interface.

These trends are troubling to many in the media because, fundamentally, the industry has had a rough time of things and it was just starting to look sunnier. The media industry entered a recession with the rest of the United States at the turn of the millennium, but then it never really recovered. When I went to my first happy hour as a full-time employee of a magazine back in 2003, my colleagues greeted me with a toast: "welcome to a dying industry."

And for years that's how it looked. The web was taking attention and serving readers, but it wasn't making any money. Then after years of struggle, the advertising market collapsed in the face of a new, bigger recession in 2008. As the American economy climbed back from that recession, this time around the media industry came with it. Suddenly there were successful new venture-backed startups. But the New York Times was growing too. And so was a holdover from the 90s internet like Slate. And so was a bootstrapped company like Gawker. And Jeff Bezos was investing new money into the Washington Post. And Disney was launching exciting new digital brands around Bill Simmons and Nate Silver.

Anxiety about ad blockers, platform-owners, native campaigns and the rest is a queasy feeling that maybe the future's not so bright after all — that commercial success will depend on compliance with the whims and strategic objectives of much larger companies who, whatever their virtues, aren't inspired by the values and objectives that lead people to pursue media careers in the first place.

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