Apple (NASDAQ: AAPL) Sparks Ad Block War

If you don’t eat your meat, you can’t have any pudding! How can you have any pudding if you don’t eat your meat?!

Internet advertisements are annoying: This is something I think we can all agree on.

Some of them flash, some of them pop, and then there are those brash enough to dance and somersault around your browser in a desperate attempt to grab your attention.

Some ads expand, others open new windows, while few are kind enough to sit off to the side, presumably feeling guilty for taking up your precious browser space.

As obtrusive as they might be, though, these ads, like it or not, are our friends. Advertisements serve as the economic fuel behind the constant stream of free content we’ve come to know and love as the Web.

While it’s true that access to the Internet through your cable provider or wireless carrier may cost you a pretty penny, the majority of content you view does not. Right now, for instance, you’re reading these words at no monetary cost whatsoever.

But as I write these words, I don’t — and simply couldn’t — do it for free. I sit at a real desk on a real computer inside a real office building. These things cost money, as do the clothes on my back, the car I drove here in, and the food that fuels my brain.

I certainly wish they didn’t, but alas, they do.

Point is, the things many of us have come take for granted as “free” to consume are far from free to produce. In fact, these things aren’t free at all: You have to pay for them one way or another, or at least, it only seems fair that you should.

What Fuels the Web

There are two things that pay for the majority of content on the Web: subscription revenue and advertising revenue. When it comes to “free” content, the Internet simply could not function without the latter. All said and done, Internet ads bring $13.3 billion (and growing) every year to content producers across the Web.

In other words, ads are a necessary evil. Without them, anyone using the Internet would be forced to pay publishers for every piece of content they consume directly. Not only would this get incredibly annoying and expensive, but it would also restrict the free flow of information.

Of course, this fact doesn’t change the inherent desire of many to beat the system. Everyone wants to have their cake and eat it too, which is why ad-blocking programs and extensions have become increasingly popular among Internet users looking to skip out on ads.

While seemingly harmless, these ad blockers are a major threat to the Internet publishing industry and, consequently, to the consumers who wish to continue viewing quality content.

According to publisher Michael Macher, for instance, the percentage of a network’s revenue that’s blockable by ad-blocking technology hovers around 75% to 85%. From a monetary perspective, an audience that can’t see ads is almost as good as no audience as all.

In short, if everyone were to suddenly use an ad blocker, the vast majority of Internet content would soon cease to exist, which is exactly why much of the publishing world has been up in arms over the past six days…

Emptying the Tank

Last Wednesday, Apple Inc. (NASDAQ: AAPL) released its latest mobile operating system, iOS 9. The update brought a slew of new features, including the iOS 9 Safari Web browser, which now allows for third-party integration.

In short, third-party integration allows developers to make apps that can access the default iPhone browser. By doing so, Apple has sparked a rogue wave of ad- and content-blocking apps that could threaten a wide range of Internet publications, especially smaller ventures.

This wave of ad blocking was so sudden, in fact, that even a few of the ad blockers themselves have become concerned. Marco Arment, creator of ad-blocking app Peace, for instance, pulled the top-selling application within two days of launch, saying:

[It] just doesn’t feel good… Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit… I know pulling Peace from the store after just two days is going to be an immensely unpopular move, and subject me to a torrent of unpleasantness. But that’ll end soon enough, and that’s better than how I’d feel if I kept going.

While Apple’s move to let ad blockers run rampant has so far been celebrated by content consumers, many have failed to realize that this was actually a calculated move by the company to kill, or at the very least constrict, the open Web.

You see, at the same time Apple began supporting ad blocking, it also started reaching out to publishers, offering them a kind of “ad-block pass” if they agreed to offer some content exclusively on Apple’s own Apple News app.

Online magazine Wired became the first publication to have an Apple News-exclusive story this weekend, with more publications expected to follow suit in the coming weeks. Like it or not, Apple is extorting the Web’s biggest publishers with ad blockers, and it’s working quite well.

Needless to say, this is a major punch in the face to the open Web, but it could also prove a stunning blow to ad servers. Most notably, these ad blockers could hurt Internet giant and Apple rival Google Inc. (NASDAQ: GOOG), a company that gets 90% of its revenue from online ads and the majority of its mobile ad revenue from iOS.

Finding a Happy Medium

Of course, while ads are undoubtedly the economic fuel of the Web, the ad-blocking debate is far from black and white. Ultimately, there’s a fine line between funding operating expenses with ads and completely ruining the experience for content consumers.

At full scale, ad blocking is detrimental, but used responsibly, it can curb the use of overly obtrusive ads while keeping the industry intact.

According to the New York Times:

After wrestling with the implications of their software, the founders of AdBlock Plus created an initiative called “Acceptable Ads,” which sets out a standard for ads that the software will let users see despite having ad-blocking turned on. These ads are also low-fi — they can’t be animated or cover up a page’s content.

In other words, ad-blocking companies are ironically coming to understand that without ads, the Internet — and by extension, these companies themselves — would not exist. They’ve also begun to experience the backlash from publishers who want to crush ad blocking altogether.

CNET, for instance, has begun targeting visitors using ad blockers, forcing them to disable the entire program in order to view content. The Washington Post did something similar earlier this month, censoring content for anyone who uses ad block with the message: “To keep reading, please disable your ad blocker.”

To put it simply, publishers are beginning to fight carpet-bombing ad blockers with blocking tactics of their own. They’re forcing content consumers to decide which is the more annoying option: ads or the ad blockers themselves.

Ultimately, this strategy should force ad blockers to take a more nuanced approach in terms of the kinds of ads they do and do not let you see. Publishers will be much more willing to except precision strikes on obtrusive pop-ups than a fully blanketed approach.

As for consumer ethics, my stance is that ad blockers, as tempting as they may be, are an unjust way to consume content on the Web. It’s like skipping out on taxes and using public roads or cashing in a welfare check when you don’t really need it.

Ultimately, it’s up to you to decide whether or not you want to use an ad blocker. Just be sure to consider the consequences of these programs before you do.

Until next time,

Jason Stutman

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