Is ad-blocking bringing about the end of the free internet?

Software that blocks advertisements on web pages is increasingly freely available and easy to install. That’s a big threat to web publishers, says Simon Wilson.

Why is ad-blocking in the news?

Because last week Apple released iOS 9, the latest iteration of the operating system used to run iPhones and iPads – and for the first time Apple’s Safari browser enables the use of ad-blocking software. Analysts suspect that Apple’s strategic reasoning is that it can only gain by encouraging mobile users to migrate from an environment that is dominated by browsers (where blocking is relatively easy) to one that is dominated by apps (where the apps’ publisher has much more control, and can decide what advertising to allow).

But whatever the reason for its about-face, the effects were immediate: ad-blocking apps shot straight to the top of the App Store chart of most downloaded apps. Indeed, one of them, a highly effective $2.99 blocker called Peace, became so popular, so fast, that its developer, Marco Arment, had a change of heart and withdrew the app after 36 hours. Arment said he was worried about the adverse effects of universal ad-blocking on the ability of web publishers to make a living.

How popular are these apps?

Approximately 200 million people across the world install ad-blocking software on their desktop and laptop computers each month – a four-fold increase since 2013 – according to recent estimates by PageFair, a consultancy that advises firms on how to counter the blockers, and Adobe, the software company. They estimate that ad-blocking software will cost online publishers $22bn (£14bn) in lost revenue this year – posing an existential threat to the free-to-access internet that consumers take for granted.

“Independent content needs to be financed, and that’s currently done through advertising,” says David Frew of the Internet Advertising Bureau. Ad-blockers might seem like a harmless trend, “but what they are actually doing is siphoning money away from people who create content”.

So they’re unethical?

It’s hard to argue blocking advertisements is unethical unless you also think it’s unethical to nip out to the loo during the ad break in Coronation Street. TV viewers who don’t watch advertisements have never been accused of “stealing” content – so it’s hard to see why people who prefer ad-free content online should be. Yet the way ad-blocking is evolving does create some obvious grey areas.

For example, it emerged earlier this year that big players, including Google, Amazon and Microsoft, have quietly paid Eyeo – the German start-up that makes the world’s most popular ad-blocking software, Adblock Plus – to stop blocking ads on their sites. According to critics, Eyeo’s ‘whitelisting’ of acceptable ads in return for cash is a business model that looks suspiciously akin to a protection racket. At least two German media groups have tried to sue, but courts have ruled that the product is legal, because users are told about the ‘whitelist’ exceptions before installing it.

What can publishers do?

Their options are limited. They can insist that consumers accept advertisements – but it is a strange marketing model that knowingly forces people into receiving messages they don’t want. They can ‘nudge’ and educate. For example, ad-blocking visitors to The Guardian are greeted with the message: “We notice that you’ve got an ad-blocker switched on. Perhaps you’d like to support The Guardian another way?”

They can adopt a subscription model, asking consumers to pay for access – but only niche and premium-quality content providers can be hopeful of success from that route. Alternatively, they can make better advertisements that people want to watch – as consumer advertisers were forced to do in the 1980s when video recorders made it possible to skip advertisements on TV.

How worried is the advertising industry?

Very. James Murphy, the boss of advertising agency Adam&EveDDB, told Newsnight this week that ad-blocking poses an “existential threat” to online advertising. That may be over-egging it: advertising is a remarkably resilient beast that has survived and prospered through any number of technological shifts. But what is clear, argues Matthew Yglesias in an opinion piece for Vox, is that advertising – and online publishing – will inevitably undergo some radical changes as a result of the rise of the blockers.

First, there’ll be a shift away from traditional display advertisements towards ‘native’ advertising – ie, various types of sponsored content that fit into the relevant publisher’s content stream. Second, mid-sized operations will be worst hit, while those big enough to support a sophisticated sales operation, or niche enough to have a very low cost base, are most likely to prosper. And third, there’ll be a shift away from the web onto mobile app platforms.

How do ad-blockers work?

Ad-blocking software used to be tricky and time-consuming to install, but increasingly takes the form of free plug-in extensions to browsers, including Chrome, Firefox, Safari, Opera and Internet Explorer. The blockers work by preventing web pages from communicating with predetermined lists of advertising servers so that their advertisements can’t get through.

The best known and most widely used of these lists, known as EasyList – which is a list of advertising servers to be blocked by Adblock Plus, the bestselling ad-blocker – is curated and kept up-to-date by a large and active ‘opensource’ community of users. More powerful versions can also block ‘trackers’, the software that monitors the browsing history of internet users and passes on data to advertisers.