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Adpocalypse 'will wipe out display ad growth' by 2020

Maybe, but will blockers pay a middleman?

Ad-blocking threatens to snuff out growth in the digital display advertising market, reckons Optimal, a startup with an interest in talking up the Adpocalypse.

According to Optimal’s trackers, 11.7 per cent of online display ads were blocked last year, which when married to a prediction on adblock growth, will see $12bn worth of the $50bn annual display spend blocked by users. That means the growth the value of blocked ads will almost (but not quite) match the growth in the value of the display market as a whole.

Optimal bases this prediction on a survey of users which shows that many didn’t even know they could block ads. Hard to believe, but news can travel slower than you think. 45 per cent of some 1,700 people surveyed didn’t know what ad-blocking was, and of those who didn’t, many would like to adopt the prophylactic technology.

Optimal wants to charge users to view the web ad-free, or at least free of intrusive ads, and then split the revenue 70:30 with publishers. It’s a twist on the Eyeo model, but this time, users pay. Optimal CEO Rob Leathern calls its a “shared subscription” service offering “ethical ad blocking”. Leathern is optimistic that users might be guilt-tripped into paying. You’ll even be able to top up the $5.99 a month with a tip jar.

But isn’t there a slight problem, though, we wondered?

Readers are familiar with either subscribing directly, or not paying at all for ad supported sites. By paying a middleman, they aren’t getting any of value for their additional spend of $5.99 in the way of additional content or readers services, they’re just getting ad blocking … which tech-savvier users can already obtain for themselves for free.

In addition, publishers are setting a de facto subscription price for their erstwhile-free sites, and publishers like to set their own prices for their goods, rather than have a middleman set the price (and the size of the cut).

Leathern says the survey suggests that a portion of users, some 15 to 20 per cent now, “but more among young users, will pay for the ability to block ads while still supporting publishers.”

“You can get music for free illegally, and some do, putting up with bad ads, sometimes fake downloads and other problems, but some over time have changed their behaviour when the convenience, assurances on quality, and their ability to pay for an online music service all converged.”®

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