How Ad Blocking, Once a Preference, Found a Tailwind in Privacy

In the first decade of the open web, ad-blocking software gained in popular adoption by promising people a more pleasant experience on the internet, filtering publishers’ intrusive ads and gaining the enmity of the advertising industry in the process. But in the last three years, the controversial technology has benefited from a boost in adoption prompted by another industry gadfly—the growing consumer concern over digital privacy. Legislative initiatives across the European Union, as well as burgeoning efforts in the U.S., have brought discussion over digital data into the mainstream and, in doing so, have served incidentally as a tailwind for the ad-blocking industry. “Privacy concerns are relevant and only increasing in relevance to our users,” said Jan Wittek, the chief revenue officer of Eyeo, which created Adblock Plus and acquired Blockthrough in November. “Our users have told us, and the data has shown that the privacy angle is becoming more important.” In 2021, 41% of ad-block users listed privacy as a motivation for adopting the technology, up from 25% in 2018, according to a report from audience research company GWI. Similarly, in 2020, 58% of ad-block users pointed to privacy as a motivation for using the technology, up from 6% in 2017, according to a 2021 report from ad-filtering software provider Blockthrough. At 81%, avoiding an interruptive/annoying ad experience remains the most popular motivation. What to Know About the EU’s Latest Big Tech Policing Law The fortunate positioning of Eyeo, whose appeal to consumers only grows as their anxieties over digital privacy swell, could increase its strategic and commercial leverage in the digital advertising marketplace. These combined concerns have propelled adoption of ad-block technology to record heights. In 2021, desktop use of ad-blocking software reached 290 million daily active users, while mobile ad-blocking counted 530 million, according to the 2022 Blockthrough report. Ad-blocking also embodies the concept of a ratchet effect, said Joseph Teasdale, the head of tech at the media research firm Enders Analysis. Once a user adopts the software, they rarely abandon it, Teasdale explained, meaning every new convert shifts the balance of power in a nearly irreversible manner. “The FBI itself sent out a public service announcement in December advising people to install an ad-blocker,” Teasdale said. “When you have stuff like that, how can you blame people for wanting to protect their privacy?” Publishers, beset by other existential threats, backslide While ad-blocking software like Adblock Plus benefits consumer privacy, the products reduce the advertising revenue publishers receive from advertisers and, naturally, block ad messages brands try to get across to customers. The company charges publishers whose websites receive 10 million or more impressions through the Acceptable Ads program 30% of the revenue they generate. In 2020, Eyeo collected $50 million by charging clients like Google, Criteo and Taboola to reach its ad-blocking users. Eyeo and Blockthrough characterize their services as helping publishers recover the revenue they would have otherwise lost completely, as services like Adblock Plus merely filter, rather than completely eliminate, ads. Now it’s not [publishers'] biggest existential problemMarty Krátký-Katz, Blockthrough CEO Publishers have reason to complain, as well as a reason to shoulder a portion of the blame. Ad-blocking, by nature, follows a “piss in the punchbowl” dynamic, according to Blockthrough chief executive Marty Krátký-Katz. When one publisher over-stuffs its website with ads, prompting a user to download ad-blocking software, the rest of the ecosystem pays for it. But publishers are not blameless. In dire economic circumstances, such as the current advertising downturn, websites will sneak ad products onto their pages to maximize revenue per user, according to one ad product operator who requested anonymity to discuss sensitive matters. Plus, according to Krátký-Katz, publishers have no shortage of other, more pressing commercial crises to worry about, including the looming deprecation of third-party cookies and the hegemony of social platforms, which have understandably captured their focus. “Between 2015 and 2018, ad-blocking felt like the sky was falling,” Krátký-Katz said. “Now, it’s not their biggest existential problem.” New, privacy-centric products While the rise in concern over digital privacy has proven a boon in the short term, Eyeo plans to manage the uncertainty surrounding the future of personal data by expanding into additional products. In December 2021, the company launched Crumbs, a minimum viable product that determines whether people would appreciate its core premise: filtering data-sharing the way Acceptable Ads filters the ad experience. The limited beta has garnered a few hundred thousand users, according to Wittek, encouraging Eyeo to develop a forthcoming product that lets people filter the personal data they share. And in December, Eyeo released Adblock Plus premium, whose $20 and $40 annual tiers offer perks such as a VPN, pop-up blocking and private browsing. “This is not a shift,” said Rotem Dar, the vice president of innovation at Eyeo. “Companies need to keep developing new products while maintaining their DNA. Our true nature is to provide more tools to users while finding the field of common understanding between the value exchange of content and leadership.”

Data Security

How Ad Blocking, Once a Preference, Found a Tailwind in Privacy

As the open web has evolved, so has the industry policing its ads

Mark Stenberg

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Mark Stenberg