Nicola Smith 

Ad-blockers: are publishers tempted to feed the hand that bites them?

An ad-blocking firm’s move to charge publishers to serve whitelisted ads has raised eyebrows across the industry
  
  

Adblock screenshot
Adblock Plus claims to have over 1,000 publishers on board. Photograph: App Store

When Eyeo, the company behind ad-blocking tool Adblock Plus, revealed it was launching an ad tech platform for publishers, it provoked a violent backlash. The press reported that Adblock Plus would start selling ads to publishers, effectively making it a poacher turned gamekeeper.

On the face of it, what the company has actually done is extended its existing “Acceptable Ads” platform, which it launched in 2011, creating a more efficient way to whitelist ads.

The new platform, which launched in beta last month, lets publishers and bloggers choose from a marketplace of pre-whitelisted ads, allowing them to drag and drop these on to their sites. In short, it is a slicker operation. “Instead of publishers coming to us and giving us URLs of specific ad placements that they have and working with us to fit the criteria, we have been able to automate the process so they only have [whitelisted ads] to choose from,” says Ben Williams, operations manager at Eyeo.

But this is not how many in the industry see it. The move effectively creates an ad network. As Johnny Ryan, head of ecosystem at PageFair, which helps publishers to overcome ad-blocking software, says, “There is a troubling conflict of interest in a business blocking ads on the one hand and offering to sell access for advertising on the other.”

Indeed, in addition to paying a licensing fee to have their ads deemed acceptable – and therefore whitelisted – larger publishers and ad networks will also see 6% of the total advertising revenue from these ads go to Adblock Plus. A common view is that Eyeo has erected a gate and now it is charging people to go through it.

Nick Flood, head of product at Dennis Publishing, says the organisation has seen desktop ad-blocking across its portfolio increase to double-digit percentage levels. It is one of many publishers now grappling with how to address the challenge, implementing initiatives such as serving targeted messages to users.

Flood doesn’t welcome Adblock Plus’ news. “Eyeo have built a significant user base over the last few years by allowing users to block adverts across the web. They are a commercial organisation and are looking for their next revenue stream. They already make significant amounts of revenue by charging companies such as Google, Microsoft and publishers to get on their Acceptable Ads list . This is bad enough, but creating its own ad network moves it on a step further.”

Williams argues that it is only larger entities – publishers who gain more than 10m additional ad impressions per month from the Acceptable Ads initiative – who pay a licensing fee, which amounts to 30% of the revenue. “I should point out that 90% of the companies on the whitelist don’t pay a dime.”

But it still sits very uncomfortably, in part because of the self-regulating nature of the Acceptable Ads initiative and the perceived lack of transparency. “Acceptable Ads [programme] has no representation from recognised advertising and publishing industry bodies such as the IPA, IAB or ISBA,” says Dominic Good, global advertising sales and strategy director at the Financial Times. “It does not have any endorsement from the industry and as such there is very little transparency around what is acceptable, why, to whom, and how these decisions have been arrived at.” Ryan agrees: “Eyeo uses Adblock Plus and its other ad-blocking software as the engine of an opaque business model: it is not known who must pay what to appear where.”

Williams argues that the company’s move to hand over control of what is deemed to be an “acceptable” ad to an independent review board is all in the name of transparency. “The criteria will soon be out of our hands.” He says the committee will include representatives from advertisers and publishers as well as users and privacy specialists. “Once we have finished recruiting we will list every representative on the board.”

But it doesn’t tackle the issue of the gate and the gatekeeper. Bill Fisher, senior analyst at eMarketer, says hypocrisy is too strong a word for Eyeo’s latest move. Instead he is realistic. “It’s a business, and it needs to make money. Having control of its own SSP (Supply Side Platform) gives it another instant revenue stream.”

Richard Reeves, managing director of the Association of Online Publishing goes one step further, stating that while Adblock Plus’ move was inevitable, it “doesn’t make it any less hypocritical or applaudable. The driving force behind this move is not to create a fairer and more transparent value exchange between readers, advertisers and publishers, but to profit from the very companies it claims to support.”

Of course, Adblock’s move does allow publishers to reach a valuable, tech savvy audience who have previously put themselves out of reach, and with ads that it deems to be non-intrusive. But Reeves believes this is at great cost. “Both publishers and readers are losing out, whether through reduced revenue or an unwelcome user experience.”

Fisher adds that serving ads to those who have opted out doesn’t sound particularly “progressive”. But as Williams is keen to point out, Adblock Plus does continue to give its users the option to block even ads that meet the “acceptable” criteria. “Users can opt out [of all ads] at any time. However, only about 8%–10% of our users choose to block them all. We think, after five years, that’s pretty resounding proof of the concept.”

The industry remains hugely sceptical. Adblock Plus says it has over 1,000 publishers on board, with Williams commenting that “publishers got it and signed up in droves”. Flood remains unimpressed. “Eyeo are strategically attempting to position themselves as part of the ad ecosystem and take an increased slice of the revenues but in reality they are damaging it. As things stand we won’t be signing up to this product.”

Good takes a similar view. “We believe that it is for the publisher to develop an advertising proposition that is appropriate to its users expectations rather than leave it to a centralised body, with little or no accountability, to devise a standard that is applicable to all.”

PageFair works closely with publishers and publishers’ trade organisations on a daily basis, and Ryan says he hasn’t “seen any willingness among publishers to pay for the privilege of reaching their own audiences.” Or as Fisher says, “It’s like feeding the hand that bites you.” An odd move, in anyone’s book.

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