Jean-Louis Gassée, writing or Monday Note:
When finite advertising budgets are divided by an almost infinite number of Internet billboards, the revenue per ad tends to zero. As revenue from print ads continues to decline, Web ads aren’t picking up the slack.
We now have a race to the bottom where publishers use tricks (some say fraud) to generate advertising revenue. This leads to pages that are overloaded with ads that publishers no longer control, combined with the collection of the most minute crevices of user behavior, information that’s then pimped to advertisers who are constantly looking for more finely-tuned methods to target their ads.
Enter Apple’s content blocking APIs.
The good news: We’ll soon have ways to streamline our browsing experience and avoid being pimped to advertisers.
The bad news: Marginally profitable Web sites, which is most of them, will lose advertising revenue and plunge into the red. The big guys that have paywalls in place, sites such as The New York Times, Financial Times, or Le Monde, will be much less vulnerable. (More on the Web publishing landscape in the postscript.)
The whole piece is a thoughtful and worthwhile read. It paints a dark portrait of tough times ahead for content publishers. Where will the revenue come from? As ad blocking becomes standard practice, will mobile ads simply dry up and, eventually, disappear?
Is Apple building a news funnel where all payment for web content flows through their coffers? Will Apple steer paid ads through Apple’s mobile advertising platform, iAd?
What about sponsorships? Will those sorts of ads be blocked as well?
Interesting times are coming.
In principle, sponsorships won’t be blocked, as long as you don’t name the graphics with words like “ad,” “banner,” etc. But I might be wrong; sponsorship networks might end up getting blocked, so you may need to add your own sponsorship graphics and text to make sure it doesn’t have code that an ad blocker would spot.
A majority of users won´t know how to enable it anyhow. 🙂
Well, Gassee’s eloquent piece includes this gem: “Too many sites are just echo chambers, they rewrite news releases, add strong adjectives and adverbs, and a bit of spin.” Do you feel he might be including the Loop and Daringfireball in that group? 😉
This kind of editorial regulation is common in the ad industry. A big magazine, for example, would decide it is no longer going to show ads with fat shaming in them, and then a bunch of other magazines that are sort of in their editorial wake would follow suit and ad makers would have to shelve all their fat shaming ads. And that is entirely aside from government regulation and postal regulations in the many countries they may publish in.
So this is not only not the end of the ad industry or ad-supported content, it is not even something new. You’re just seeing it in a digital form and so it includes things like the kind of code you can run, or how much bandwidth an ad can use relative to the content bandwidth.
If there were no regulation of the ad industry, every ad would be subliminal. There would be hypnotists running the ad agencies, and people would lose hours of their day because they opened a Web page and an ad hypnotized them and walked them through 3 hours of credit card shopping that they can’t remember.
So please — no tears for ad makers or for publishers who enable some ad makers to abuse their readers. They did so little self-regulation that Apple had to regulate. It shows how much better it is to bring your readers valuable advertising, like The Loop does.
People will chase Superbowl ads on YouTube — for years now. If you are showing ads that require a whole new class of software just to restore the functionality of the Web, then you are really, truly failing at Internet.