The Allure of an Ad-Free Internet

Well, that happened fast. After 36 hours as the No. 1 paid app in the App store, the programmer Marco Arment is pulling his ad-blocker, Peace, from the market.

“Even though I’m ‘winning,’ I’ve enjoyed none of it,” Arment wrote in a blog post on Friday. “That’s why I’m withdrawing from the market. It’s simply not worth it.”

Ad blockers are controversial for good reason. To the person scrolling or clicking through a website, online advertising can feel like trip wire designed to trick you into clicking. Depending on the strength of one’s wifi connection and the reserve of one’s patience, navigating this ad-speckled landscape can be tolerable or aggravating. On mobile devices, where mere scrolling can trigger the unwanted click of an ad, the experience can be rage-inducing. So it’s understandable that ad-blocking apps seem to be gaining popularity now that iOS9, Apple’s latest operating system, enables such software.

To people who rely on ad dollars to run their businesses—most media companies and some major leaders in tech—ad blockers represent a serious threat. And it is a threat most publishers seem unprepared, or at least unwilling, to confront. We contacted 28 major media companies to ask about how ad blockers affected revenue and none would provide specifics, nor would they characterize what percentage of visitors to their sites used the software.

Those who advocate for ad blockers say they’re a way for users to force the media companies they like to adapt. Users want better experiences, the argument goes, and ad blockers provide them. Choking off a business’s main revenue stream, others argue, is a peculiar way of showing a company you value that you want it to improve.

Either way, ad blockers represent a microcosm of the much larger changes happening online—shifts that will reverberate through the media and technology industries in ways that are fully underway but still difficult to parse. And though major media organizations like The Wall Street Journal, The Washington Post, CNN, and The New York Times declined to provide information about how ad blockers are affecting their revenue, the threat they pose to these businesses is clear.

Other organizations have been more forthright. Readers are already blocking ads on a quarter of pageviews at The Awl's suite of websites. That’s according to Casey Johnston, who quoted the site's publisher as having told her that up to 85 percent of The Awl's revenue is blockable as a result. If you want to get really deep into the ad-blocking frenzy this week, Johnston’s piece is a must-read, along with articles by Nilay Patel, and Annalee Newitz, in The Verge and Gizmodo, respectively.

The rise of ad blockers isn’t just a clash of sensibilities, though. The major leaders in tech are all trying to leverage their advantages at the expense of their competitors. “So it's Apple vs. Google vs. Facebook, all with their own revenue platforms,” Nilay Patel wrote, in his article for The Verge. “Google has the web, Facebook has its app, and Apple has the iPhone.” It’s also no mistake, as Newitz pointed out, that Apple starting allowing ad blockers on the same operating system that features a news app that can’t be deleted from people’s homescreens.

But Facebook has a layer of protection that many other media organizations don’t. On phones, its ads mostly display in apps—and Apple’s new ad-blocking capabilities only affect the phone’s browser. “In our case specifically, ad blockers haven’t had as much impact—in part because the bulk of ads shown on/by Facebook are delivered on Facebook and in other apps that integrate with us,” Adam Isserlis, a Facebook spokesman, said in a statement he provided. Facebook’s latest earnings report shows mobile-ad revenue represented approximately 76 percent of overall advertising revenue for the company in the second quarter of this year, up from 62 percent in the same period the year before.

Which isn’t to say Facebook isn’t concerned about ad-blocking technology. “We generate substantially all of our revenue from advertising,” the company wrote in an SEC filing in April. “The loss of marketers, or reduction in spending by marketers with Facebook, could seriously harm our business… [including] the impact of new technologies that could block or obscure the display of our ads.”

Still, given the dominance of Facebook’s app, the likely result of ad-blocking on the mobile web is a further consolidation of the company’s power. If Google struggles to deliver ads, that money will flow to platforms whose ads can’t be blocked—like Facebook.

Media companies are, in effect, watching two business models crumble at once: their traditional business, and whatever business they were able to cobble together on the desktop. Many publishers are still struggling to meet revenue goals in the shift from print to desktop, to say nothing of the shift from desktop to mobile. The latest earnings report from The New York Times shows revenue from digital advertising made up about one-third of overall advertising revenue; $48.3 million out of $148.6 million total. The “digital first” movement that emerged among print-media companies in response to the Internet has been replaced with a “mobile first” attitude. But that maxim still falls apart on the business side. For many legacy companies, print advertising revenue still dwarfs revenue from desktop and mobile ads. Throw ad blockers into the mix, and the picture is further complicated.

To Andrew Moore, a former vice president at Google and now the dean of computer science at Carnegie Mellon, the rise of apps over the mobile web makes the question of ad-blocking almost moot.

“I actually do not think this is going to be an important issue for much longer,” he said. “It is moving so much from the browser to devices that the really big disruptor—and the thing people are freaking out about on business models for devices—[is] you cannot have the same ad-supported revenue models as you did when you had a browser,” he said.

In other words, for many companies, apps were already destroying the online-advertising revenue stream. The question that emerges for Moore, he said, is what comes next. The businesses that end up surviving won’t give up advertising but may stop serving up ads that can be obviously blocked, he said. This will come in the form of sponsored articles designed to look like editorial, and search results paid for by companies who want to rank first on Google—only the lines will, Moore believes, become increasingly blurry.

“Users will be incredibly offended if they ask a question like, ‘Where’s the best Caribbean restaurant in Pittsburgh?’ and the question-and-answer system answers in favor of the restaurant that's paying… But that's what you're going to see,” Moore said. “There will still be a lot of controversy in this area but it will be about how the content is not purely advertising and not purely organic. It will merge into this mysterious combination.”

In the short term, ad blockers will make web pages cleaner, faster, and more mobile-friendly. “I still believe that ad blockers are necessary today,” Arment wrote. Maybe so. But they won’t be a lasting buffer against advertising. Depending on what they target, ad blockers encourage a more pervasive form of advertising—a kind that’s harder to avoid, harder to identify, and impossible to shut out.