Adblock Plus is costing internet firms a fortune. And as new laws regulating web adverts come into force it could devastate revenues worldwide
How much damage can two blokes in Cologne do to Google?
“We have probably cost them billions, yes,” says Till Faida.
How many billion, I ask. Three, four, five? “It could be five billion dollars” says Faida. He’s not sure.
Faida and his colleague Wladimir Palant are the team behind Adblock Plus, the most downloaded Firefox add-on of all time. Adblock Plus is free. It performs one tiny, but highly destructive role. It blocks all advertising on the internet.
By installing Adblock Plus you ensure you never see another ad. That includes the little ads which Google relies on for revenue.
I discovered it years ago.
Land Rover had a fabulously annoying web ad. I remember trying to read FT.com and watching the Land Rover ad in the corner drive over the text, handbrake turn in the middle, sharp left and then glide to the bottom of the pink page.
It was an intolerable intrusion. I researched the problem and found Adblock Plus. Two clicks, install and…suddenly the internet was clean again.
Goodbye Land Rover ad! Farewell Google ads. And adiós to flashing banners saying I’d won a mobile phone. Adblock Plus allows you to surf the internet in peace. Pages load faster. Even YouTube videos start without the advertising preamble.
It works for the Firefox browser and Google’s Chrome browser. Other versions exist for all other browsers.
Naturally, Adblock Plus is hugely popular. Usage figures are uncertain, but Faida estimated that in the US four per cent of ads are getting blocked by it. In Germany the figure was12 per cent. “Those figures are old, and could be higher” says Faida.
Total downloads stand at 149 million, increasing by 100,000 a day, although it is important to note that many downloads are re-installation or installation on a users’ second PC.
The more tech-savvy the users, the more likely they are to install Adblock Plus. “We have some tech blogs in Germany which have up to 70 per cent of their ads blocked,” says Faida. Other, more public sites, report only 10 per cent.
The effect on Adblock Plus on advertising traffic can be devastating.
The web is littered with pleading from content owners and advertisers to shut it down. Here’s a typical one:
“I am a web master from a very small web site and Adblock is hurting my site like the feeling you get after your house burns down.
“I hope all of the Adblock plus users really feel what we, the web masters feel. The only source of revenue for us is the ads on the side of our pages. And when you block those ads, who is going to pay our bills?”
Even the mighty Google has a section in its Annual Report dealing with the threat. It states: “Most of our revenues are derived from fees paid to us by advertisers in connection with the display of ads on web pages. As a result, ad-blocking technology could adversely affect our operating results.”
Now here’s the problem. In May it will become compulsory for all websites to inform readers of web-tracking cookies, and to ask consent for the cookies to be installed on the users’ machines. The most likely method will be a drop down form requiring a Yes/No click.
Hand in the cookie jar
The “cookie consent” requirement will make web-users acutely aware they are being tracked and targeted by advertisers. For many it will be a disturbing epiphany. Most likely they have used the internet for years without ever considering what a cookie is, or what it does.
The incentive to ad-block could rocket. With potentially ruinious consequences for advertisers and content owners.
The men behind Adblock Plus
I set up an interview with the Adblock Plus boys to hear their side of the story. Could they really destroy swathes of the internet? What motivated them? And what was Google’s reaction to being diddled out of billions of dollars?
Surely no corporation takes that sort of treatment lying down. Nor would Facebook, Yahoo, AOL and the millions of other ad-dependent sites.
Wladimir Palant is the programmer behind Adblock Plus. He took on the project in 2006, after it had been abandonded by Henrik Aasted Sørensen who had created it in 2002. Palant rewrote the entire programme, and almost instantly turned it into the most downloaded Firefox add-on in the world.
Till Faida joined Palant two years ago after meeting him to research his university thesis on the influence ad-blocking on internet revenues.
Palant told me by email that his colleague’s English is better, so it would be Faida doing the talking.
By phone, Faida urgently stressed that the pair are not anarchists, and don’t relish depriving sites of revenue.
“Wladimir is aware that ads are necessary. He doesn’t want to destroy advertising in any way. A lot of people in the community know that ads are the only mechanism which can finance free content on the internet. He just wants to give people control over what they see on their screen.”
Are the pair aware of the damage done to site owners?
“Yes. A tech-site here in Germany told me that they have 40 per cent of their ads get blocked. They sent a journalist to a conference in the US. They told me that if they had higher revenue they would have sent two.
“We are aware that Adblock Plus is now so popular it could be a destructive element for the internet eco-system.”
Worst case scenario? “Globally, 50 per cent of all ads could be blocked.”
That would wipe £90bn off the value of Google, and halve the value of Facebook. Newspapers from The Guardian and The Telegraph to websites such The Register and The Daily Mash would struggle to survive.
In fact, Palant and Faida are so aware of the power of their product they have decided to dilute it. In December they modified Adblock Plus so that a limited number of ads would be displayed, by default.
Users went beserk, accusing the pair of “selling out”. The ferocity of feeling online is something to behold.
Why did they authorise this change?
Faida says, “We did surveys and found that users are not against ads, just annoying ones. We wanted to come up with a middle ground. The Acceptable Ads Initiative is the first step to achieving this goal.”
He explains that users can still block ads completely, but need to change the default settings. Not hard – but by allowing a few ads to slip through two things are achieved. First, the user becomes aware of the advanced funcationality of the product.
And crucially, advert designers have an incentive to create clear, unobtrusive ads.
“We have a set of criteria for which ads to let through,” says Faida. Ads must not flash, must not obstruct the text or move, or try to trick the users (“Millionth user click here for prize!!!!!!”).
“We want to make advertising better. That is our mission statement – to improve the internet as a whole.”
Under the new rules, set out here, adverts which comply with good behaviour policy will be manually added to a whitelist, gaining exception from Adblock Plus’s basic list. Users can alter the settings to resume a complete black-out, but Faida and Palant are confident most will be content to let good ads slip through. “We think about 75 per cent of users will be willing to accept that,” says Faida.
Intriguingly the company of Palant and Faida, Eyeo GmbH, has no revenue. Adblock Plus is given away free. So how do they survive?
“We get donations, but not enough to cover costs. We had an investment from a private investor who shares our goals. That is how we are self-sustaining for quite a long period. We need to think how to generate revenue, but we are not in a rush.”
He says Google has never been in touch. I jokingly point out that it would be worth Google offering a billion quid to buy-out Adblock Plus and shut it down. Faida says, “It is not something Wladimir would ever do.”
I don’t believe him.
In May the whole ad game will change when the Cookie Consent directive goes live. Furthermore, there’s another plan to add an icon by every cookie generated add. The European Advertising Standards Alliance and the Internet Advertising Bureau of Europe are behind the plan. It will increase users’ awareness of being tracked.
Will these well intentioned moves backfire as Adblock Plus surges in popularity?
Dating website entrepreneur Oliver Jameson, owner of Cougared.com (where the men must be under 35 and the women over 40) is deeply concerned:
“If a critical mass of users install browser software that prevents ads showing, then the inevitable result will be advertisers seeing a reduction in clicks (for clicks read traffic) and brand awareness.
“Because pretty much everything is measurable online, the effects will be fast and devastating. Advertisers will question the value of placing ads on websites, which will mean many sites that rely on ad revenue to exist – will be scaled down, abandoned and eventually simply cease to exist. Actually, many will cease to exist in their present form – as free services – but some will be reinvented as paid-for offerings.”
Others are more optimistic.
Richard Beaumont of the Cookie Collective, a research body which helps firms deal with the challenge of gaining consent from users to comply with the new directive, says:
“The new law may reduce the need for tools like Adblock Plus. Sites will need to gain the consent of users, so will think about their adverts more carefully.” He says it could turn out to be a great opportunity. “Businesses which are transparent and build trust will do well.”
If he’s right, then there’s no need to worry.
If Jameson is right, and ad-blocking is on the verge of going viral, then the internet is in for one hell of a shock.