Rising Ad Blocker Use Poses Risk to Web Content/Ad Stocks

Adblock Plus, a free browser plug-in which blocks website ads, now boasts 2.5 million users, according to its developer Wladimir Palant. Palant estimates that 300,000 to 400,000 new users download the ad blocker each month. Adblock Plus is the second most popular plug-in for Firefox. While ad blockers are also available for Internet Explorer, they aren't necessarily free or as effective. Adblock Plus blocks ads delivered by most commercial ad servers and large advertisers, and poses a threat to the revenue of Internet advertising companies such as Google, and Internet content companies such as Yahoo!, CNET, Microsoft, the New York Times, Time Warner and TheStreet.com. Some small web sites have retaliated by preventing access via the Firefox browser. One advocacy site, whyfirefoxisblocked.com, argues that "Accessing the content [of ad-supported web sites] while blocking the ads... would be no less than stealing." Web publishers haven't commented or responded, but that would likely change if adoption of ad blockers becomes significant. University of Chicago law professor Randal Picker predicts that the first response of web publishers would be technological rather than legal.

Sources: New York Times, whyfirefoxisblocked.com, Adblock Plus blog
Commentary: Firefox good or bad for ad click rates? • Key quotes from the Fastclick S-1 • How big a problem is click-fraud?
Stocks/ETFs to watch: NYT, DJ, TSCM, TWX, MSFT, GOOG, YHOO, CNET
Related: Randal Picker's commentary

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Comments

[Derrick She...:]

You bring up some very interesting points. I can understand annoying popups or really flashy banners being somewhat obtrusive, however by and large Internet advertising, at least on bigger/more-popular sites is generally subtle and relevant. I don't understand why people have such a problem with unobtrusive, relevant advertising?

Thanks for the great article.

2007 Sep 04 10:15 AM

[Sr. Pessimist:]

Advertising must be psychologically acceptable to the user. Maximizing profits at the consumer's psychological expense is unethical and eventually uncompetitive.

2007 Sep 04 02:23 PM

[Ralph F:]

"Advertising must be psychologically acceptable to the user. Maximizing profits at the consumer's psychological expense is unethical and eventually uncompetitive." Doesn't that mean that you should avoid websites with obtrusive advertising, not take their content but refuse to view the ads? It's like saying "Movie studios charge too much for DVDs, so I'll watch pirated versions". It's fine to say "this is too expensive", but if you're not willing to pay the price, you can't have the goods.

2007 Sep 04 03:44 PM

[James P:]

One day I was surfing a large social networking site that displayed some ads that were offensive to me. I sent an email to the company capturing the URL of the ad (as I best knew how). I got a reply to the effect of, "Please install AdBlocker and click on such and such to capture the URL and send it to us so that we can remove this ad from our system." Well honestly I really didn't even know such a tool even existed. But it seemed like a great answer to my problem. Now this is coming from the guy as I'm sure most of you, that didn't like a lot of annoying pop-ups and probably you even have used a pop-up blocker at some point in time. But here's the deal. Pop-ups 99% of the time are useful for me. So what do I do? The one built in Firefox, Google Toolbar and elsewhere I disable (one of the first things I do). Because they aren't that annoying and I don't visit sites that have the really awful ones. So here is what is going to happen. The average user isn't going to know a ad blocker exists and may only find out about it as things get really annoying/repulsive. As online advertising becomes less effective that type of advertising will disappear and people will not install those plugins as much. The market will re-right it's self. Honestly text ads from Google don't bother me. I click on them occasionally if I think the advertiser has what I'm looking for. But don't be doing awful things with advertising or I'll retaliate... even if it means not visiting that site anymore. Might be considered stealing but it isn't any more stealing this having a pop-up blocker (which I venture to say that most informed people that know about this and have been on the web have used at one point or another in their life). I don't use one now though because the market has righted it's self with this problem. Yeah, Orbitz, last I checked had pop-ups but they weren't annoying and I ant' planning on blocking them.

2008 Apr 30 06:56 PM