Ads don't generate money · 2007-09-10 04:46 by Wladimir Palant
The Adblock discussion started by Danny Carlton’s half-hearted attempts to exert pressure on Mozilla Corporation continues. Now the “big players” entered the game, in the last few days I was contacted by reporters from NY Times, BBC World, National Public Radio, and several others. Their criticism of Adblock Plus is different — and more convincing. After all, nobody can deny that Adblock Plus is taking revenue away from content providers thus undermining the foundation of the Internet, right?
Well, not really. I found two nice articles that put these accusations into the right perspective: Adblock: Adapt, or die and Adblock doesn’t matter. Get over it. And I have something important to add: advertisements don’t generate money by themselves. There is no rich Uncle Goo who gives everybody a penny for each ad just for the fun of it. The money comes from somewhere else and it is important to keep this in mind.
So, where does the money come from? Basically, there are two possibilities. One is purchases done on the Internet. The other is investments by companies who usually hope that these investments will help their products sell better. Advertisements are only a mechanism to distribute this money (one of many mechanisms). And usually, the idea is to distribute the money depending on how much revenue a particular site generated for the advertiser. That’s right, it is not important how many ads have been squeezed into each single web page, it is not important how many times they have been viewed, it is not even important how many users have been distracted from what they were doing. It is only important how many people actually decided to click through to advertiser’s site and to buy something, thus justifying this ad (I admit, this is a very simplified view but that’s the general idea).
Now what happens if people start to block ads? First of all, everybody who hates ads and wouldn’t click them anyway now blocks ads. And this can make advertisers really happy because instead of wasting their bandwidth (and money) they now only serve ads to people who are interested in them. They also get better statistics and can see which ads people find more interesting — without having to estimate the number of people who wouldn’t click any ad.
But there is also a second group who blocks ads as well — people who don’t really mind ads but decide to block them because they get so annoyed. I think here of ads that start to play sounds when you enter a site or ads that overlay site’s content until you find the “Close” button and click it. But ads are not like popups, there is no simple technical solution that will block every single ad on the Internet. You need to define a filter for each ad server, with the consequence that the ads blocked by filter subscriptions or private filter lists are likely to be the most annoying ones. I really hope that in the long term that will cause annoying ads to generate less revenue, so that we will finally have an economic factor discouraging annoying ads (good will is obviously not enough).
To sum it up, does blocking ads mean that the money streams on the Internet will dry out? I don’t think so, that would only happen if the amount of money to be distributed becomes smaller — and I don’t see any reason why this should happen. But the distribution pattern might very well change, with the effect that those who really deserve it (don’t inflate statistics by putting unreasonable numbers of ads into web pages, don’t trick users into clicking on ads and don’t annoy users in general) would earn more money.
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