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Ad-Blocking Remains High Hurdle for Digital Video

IAB CEO rips ‘profiteers’ impeding online content flow as Brave launch looms 2/01/2016 8:00 AM Eastern

For all of the blue-skying about ad dollars shifting dramatically from linear to digital video, ad-blocking (to say nothing of fraud) remains a growing dark cloud on the horizon.

 

A study of fourth-quarter online activity released in January by U.K. digital consumer researcher GlobalWebIndex (GWI) found the percentage of Internet users who reported blocking an ad in any given month jumped to 38% from 28% in the third quarter. GWI also found that 37% of mobile users block ads; another 42% said while they haven’t used blocking tools yet, they’re interested in doing so.

 

Speaking Jan. 25 at an annual meeting of the Interactive Advertising Bureau (IAB), Randall Rothenberg, president/CEO of the digital advertising trade group, spoke with remarkable candor about the issue. He began by laying out the IAB’s history, praising the group’s public policy work in Washington, D.C., and looking at what’s next for what IAB says is a $50 billion-a-year (including display, video and social media) digital ad industry.

 

After the niceties were out of the way, Rothenberg used the second half of his opening keynote speech to share how much he “hates” ad-blocking technologies, which are run by people he called “self-proclaimed libertarians whose liberty involves denying freedom to everyone else.”

 

He went on: “The ad-block profiteers are building for-profit companies whose business models are premised on impeding the movement of commercial, political and public-service communication between and among producers and consumers. They offer to lift their toll gates for those wealthy enough to pay them off, or who submit to their demands that they constrict their freedom of speech to fit the shackles of their revenue schemes.”

 

Rothenberg’s speech came on the heels of several new ad-blocking technology announcements, as well as new research showing that more consumers are increasingly taking advantage of ad-blocking tools.

 

“A number of factors have combined to cause this rise, from the almost-constant media coverage enjoyed by the subject to the proliferation of free and easily-available tools,” wrote Jason Mander, GWI head of trends. “But the arrival of ad-blocking on mobile has also been encouraging people to adopt this approach across all of their devices and…it’s the numbers who are blocking ads on mobile which are perhaps the biggest cause for concern.”

 

Rothenberg had his own stats to make the case against blocking tools—he pointed to surveys showing nearly 75% of consumers prefer ad-supported Internet content vs. pay-to-play. But the IAB’s own research has also found that at least one-third of U.S. Internet users are using blockers (listing fear of computer viruses and the belief that ads slow Internet access as reasons for doing so).

 

Still, Rothenberg railed against the people behind ad-blockers, utimately terming their business models as possibly “illegal.” He saved his greatest ire for several ad-blocking companies in particular, including Israeli- based ad-blocker Shine, Germany-based AdBlock-Plus (whose free extension has been downloaded more than 500 million times, and blocks ads and domains and disables tracking), as well as Brave, a new Web browser start-up launched by former Mozilla CEO Brendan Eich.

 

Brave (currently in beta-testing) blocks online ads automatically, and replaces them with its own programmatic ads, with the company taking a 15% cut of all ad revenue appearing. In a Jan. 27 blog post, Eich defended Brave as an alternative to “the poorly performing ads and trackers that drive users to ad-blockers.

 

“We believe this system, which puts users in charge of their Web experiences and helps create a direct relationship with their favored publishers, will finally reset the ad-tech ecosystem in favor of consumers and content providers,” he wrote. “This is a win-win for everyone who has a stake in the open Web and who is weary of giving up privacy and revenue to the ad-tech intermediaries and their high ‘ad tax.’”

 

While calling Eich “self-righteous,” Rothenberg did admit that the digital ad industry has done its part in creating the ad-blocking phenomenon, by opening up security concerns, impeding the easy delivery of content and crowding screens. And to fix it, he called on the industry to create new operating standards that “regulate how we will operate our sites, our advertising, and our delivery,” as well as technical standards.

 

“Ad-block profiteers have done this industry a favor,” he said. “They have forced us to look inward—at our own relentless self-involvement—and outward, to the men, women and children who are our actual customers.”

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