In a previous post we alluded to an impending ad block block war. Last week can be regarded as the starting point of an open war between adblockers and publishers. Facebook, claiming 1.7 billion users currently, decided that enough was enough; Facebook ad-blocking software had to be stopped. In 2015 Facebook’s revenue peaked at $ 17.9 billion, 95% of which comes through advertising. Having a business model primarily based on advertising fees FB has to show its clients (not users!) that it can deliver eyeballs on a plate. It will do everything possible to protect clients and their precious advertising budgets which is why it has taken on the most popular ad blocker Ad Block Plus from Eyeo.
The tit for tat approach (if you hit me, I’ll hit you) is a very simple but effective strategy. The aggressor of the primary assaults can count on retaliation from the attacked party. It will make the aggressor think twice to begin an attack on the other. However this game theory is based on the underlying assumption that the parties involved are equally strong. The problem is that Facebook’s resources are way bigger than Eyeo, the company that developed Ad Block. For Eyeo it is hard to beat Facebooks financial resources and army of developers. Moreover, Facebook owns its platform and can much easier and almost instantaneously update its latest anti ad block solutions. New Ad Block filters and algorithms to block FB ads on the other hand are sometimes automatically updated, sometimes not, depending on user preferences and platforms. For Eyeo with its 70 employees and almost zero budget this looks like an uphill battle. They may have the help from a large open source community to keep the fight going for a while but can not count on that support indefinitely.
Researchers of MIT however believe that Facebook can not win this battle within the rules as laid out by the Federal Trade Commission, stating that sponsored content should be labeled as such. If Facebook wants to continue within the boundaries of these rules they have to show which content is sponsored. This means they have to somehow tag the sponsored web content. According to MIT these tags, whether on screen or in the HTML, can always be found and subsequently used for creating ad block algorithms.
So while the odds in the current FB Ad Block are with FB, the rules are against them. The issue is not just about Facebook and Ad Block Plus. Nearly all popular and not so popular websites are depending on advertising fees for their income. And next to Ad Block, alternatives such as Ublock, Ghostery, Ad Muncher, Ad Guard seem to pop up like mushrooms. It is an indication that advertising formats on the web are becoming increasingly intrusive and unacceptable to readers.
The big risk is of course that sponsored, branded or custom content can no longer be distinguished from other (editorial) content. For advertisers and publishers native advertising seems to address the growing consumer resistance to more and more intrusive ads. Native advertising can be regarded as a focused combined effort from businesses and editorial operations to integrate commercial messages in editorial content that for most consumers is not recognizable as sponsored content. Initial research suggests that fewer than 1 in 5 consumers recognize native advertising as advertising. This opens up heaps of opportunity for publishers and advertisers for (mis)leading consumers.
Ad budgets will find a way and companies paying for the ads increasingly demand value for money. In the current setting, where sponsored content can be recognized ad blocking will be possible. If FB and ad depending websites can’t win the ad block battle, advertising budgets may increasingly move to forms of native advertising. So, better the devil you know than the devil you don’t?
