tuesday, 3 february of 2015

Google, Microsoft and Amazon pay to get around ad blocking tool

Google, Amazon, Microsoft and Taboola have quietly paid the German start-up behind Adblock Plus, the world’s most popular software for blocking online advertising, to stop blocking ads on their sites.

The deals, which are confidential but whose existence has been confirmed by the Financial Times, demonstrate that some of the biggest participants in the $120bn online advertising market see the rise of ad-blocking as a material threat to their revenues.

Adblock Plus has become one of the most popular free extensions on Chrome and Firefox browsers in recent years as internet users have attempted to eliminate the interruption of advertising. Eyeo, the German company that produces the software, says it has been downloaded more than 300m times worldwide and has more than 50m monthly active users.

However many publishers that fund their operations through advertising worry that ad-blocking will undermine their business model. German media groups including RTL and ProSiebenSat.1 are seeking damages from Eyeo, while French publishers are reportedly considering whether to follow suit.

Google and Amazon declined to comment.

Microsoft, whose Bing search ads have been unblocked, said: “Microsoft will always give consumers choice when it comes to advertisements. We are committed to working with partners who share our vision for relevant, impactful brand interaction and respect the integrity of consumer choice.”

Eyeo makes money by operating a “whitelist” of certain ads that are not blocked. It says sites can join this “acceptable ads” programme only if they meet criteria such as being “transparent with us about being an ad” and “do not disrupt or distort the page content we’re trying to read”.

While the whitelisting process is free for small websites and blogs, Eyeo charges a fee to large companies in order “to make the initiative sustainable”. Eyeo declined to say how much it charges.

One digital media company, which asked not to be named, said Eyeo had asked for a fee equivalent to 30 per cent of the additional ad revenues that it would make from being unblocked.

In judging which ads are “acceptable” and which are not, Eyeo must tread a fine line to avoid upsetting Adblock Plus users. Those who disagree with its decisions have the option of blocking all ads including those on the whitelist, or defecting to rival software such as Adblock Edge.

After Eyeo proposed in an online forum in November that Taboola, an advertising network that sometimes serves racy content, should be whitelisted, one user wrote in response: “This is a joke right? Taboola should be scorched from the internet for all time.”

Despite the protest, Eyeo whitelisted Taboola. That decision is likely to be benefit websites such as MailOnline, Business Insider and NBC News, which use Taboola to serve ads in the form of “sponsored content” recommendations at the bottom of their news articles.

Taboola declined to comment.

Usage of ad-blocking software increased 70 per cent last year, according to data from PageFair and Adobe. They found that there are about 144m active adblock users around the world.

PageFair found that the majority of adblock users expressed “some willingness to receive less intrusive ad formats”, but they “strongly rejected intrusive ad formats such as interstitials and popovers”.

Only one in five respondents to the PageFair survey said they would be willing to pay a monthly subscription to their favourite website in exchange for an ad-free experience.

(Published by The Financial Times - February 1, 2015)

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