Consumer use of ad blockers is on the rise and new ad blocking tools — including a new ad blocking browser and a carrier-backed plan to block ads right at the source (or the data centres) before they even reach a customer’s smartphone have been announced in recent months.
The increasing popularity of ad blockers is an existential threat to companies like Google that make the majority of their revenue from selling ads.
Hence why the question of ad blockers was brought up at Google’s annual meeting of stock holders on Wednesday. An audience member asked Google CEO Larry Page how the company saw ad blockers affecting its primary revenue source, and more broadly, how ad blockers may prevent the broader ad-based model on the internet, and whether they might stifle ideas from growing.
Page’s response was surprising, in that he was not critical of ad blockers — even though companies like Google have to pay ad blocking companies, like the most popular ad blocker Adblock Plus, huge fees to get their ads whitelisted. Instead, Page thinks the best response to the rise of ad blockers is to create better ads.
Here’s what Page said (you can view the full shareholders meeting on YouTube here:)
Yeah, we’ve been dealing with ad blocking for a long time. There’s been a number of different products to do that.
Part of it is the industry needs to do better at producing ads that are less annoying, and that are quicker to load, and all those things. And I think we need to do a better job of that as an industry.
We’ve been trying to pioneer that. I think search ads are very good in that sense, and, in fact, a lot of places where ads can [be] block[ed], search ads do not get blocked because they are really useful. So I think that’s a really good example of what we’re trying to do.
But I don’t think there’s been any major change in that dynamic in the last year or anything like that.
You could almost take Page’s words in that second paragraph and re-insert them into the rhetoric from the ad blocking companies over the past few months.
For example, here’s what Ben Williams, operations and communications manager at Adblock Plus, told Business Insider last month: “Ad blocking is a symptom of bad ads. Newspaper ads, magazine ads, and TV there is a level of acceptance to a degree. But these transferred one-by-one over to the digital space, and that didn’t work out so well. Click-through-rates and the money people were getting back from impressions fell under a while. And the response was to just make more ads.”
It’s also interesting that Google seems to be taking a different tack than traditional publishers with regards to ad blocking. In Germany, Adblock Plus has been taken to court four times (and one case is still ongoing) by publishers challenging the ad blocker’s right to suppress revenues from their websites. Each time so far, the ad blocking company has emerged from court victorious.
ProSiebenSat1, which took Adblock Plus to court last month, said in response to the Munich court ruling in favour of the ad blocker: “Today is also a sad day for internet users, because AdBlock Plus jeopardizes the financing options for all free internet sites. We still feel it is inadmissible under copyright and antitrust laws, and it is an anti-competitive attack on media diversity and freedom of the press. Therefore, we will review the options for appeal and further legal action against Eyeo.”
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