Ad blocking started as an initiative by independent developers who wanted to improve our browsing experience. Now that at least one company, Apple, has made Content Blocking “official”, ad-supported publishing business models are in trouble.
Back in the days when we bought a newspaper or magazine at the newsstand, we thought we were paying for the newspaper. We were only faintly aware that advertising contributed a large share of the paper’s revenue. In some cases, like old computer magazines, ads were welcomed and even avidly sought by the reader; they provided a needed source of information in a rapidly evolving field.
No strings attached, we buy, we read, and we’re done.
Then, the Web happened and newspapers and magazines became available on line. The unlimited number of sources of information and entertainment has lead to a new kind of Tragedy of the Commons: 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.
Ad Blocking technology — browser modules that could detect and block ads — emerged as a way to combat some of these abuses. Unavoidably, this led to cat and mouse games. As detection improved, advertisers learned to sniff the rules and avoid the blocks. It also led to whitelisting, a “feature” that I can’t but call an extortion racket. Adblock Plus from Eyeo GmbH maintains a whitelist of the “good guys”, advertisers who pay to be let through the gates. Large companies such as Google, Amazon, Microsoft, and Taboola pay AdBlock Plus to lift the ad barrier. Lovely, especially for small, marginally profitable companies who can’t afford the bribe.
We’re now about to have a cleaner set of content blocking APIs in upcoming versions of Safari for OS X (desktop) and iOS 9 (mobile). These APIs will allow app developers, Apple included, to create a range of blocking tools aimed at removing or filtering ads and improving privacy. An early example is Crystal by Dean Murphy, which demonstrates marked improvements in page load times and sizes:
(TechCrunch provides a detailed overview of the Content Blocking wave).
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.)
What are the smaller publishers to do?
Displaying their outrage by posting “Access Denied” when reached by an “offending” browser won’t work.
Some very specialized sites, such as Ben Thompson’s Stratechery and Ben Bajarin’s TechPinions, are able to generate membership revenue because the quality of their content — sober analysis versus mere reporting — makes it worth the price of subscription.
But these are exceptions. Too many sites are just echo chambers, they rewrite news releases, add strong adjectives and adverbs, and a bit of spin. Competition for attention, pageviews, and advertising dollars drives them to shout from the rooftops. If they don’t want to disappear or be rolled up into a larger entity to “optimize expenses”, they’ll have to get us to pay for their content.
This is much easier said than done. It’s difficult to conjure up a picture in which we’ll have subscriptions to most of the sites we graze today in their ad-supported form.
An alternative to subscriptions for content we may or may not actually “consume” is pay-as-you-go. In principle, this isn’t very different from what we do when we buy an episode of Breaking Bad. We gladly pay $2.99 to watch what we want, when we want, and without ads.
This works well for TV shows, but it doesn’t easily translate to websites.
First, we’re not going to pay $2.99 for an article on The Huffington Post. We’ll only pay a small fraction, 1/100th perhaps, of the price of a TV episode.
Second, once we start paying for articles, even in tiny sums, we’ll become much more selective. Irrespective of the amount, the move from free to paid will influence our choices. For many sites, crossing that chasm might prove impossible.
Third and perhaps most important: How will these purchases be transacted? A separate account for each site is impossible. For this to work, we’d have to be registered in a single location from which we could browse, buy, and read. That location would log transactions, count the money, take funds from our credit card or bank account, pay content suppliers on a weekly basis… and keep a percentage for its services.
Sounds familiar? In 2003 Apple opened the iTunes Store with two innovations: Content by the slice and micro-payments; selling music one song at a time for 99 cents.
For a brief dreamy moment, similar arrangement for websites might sound attractive, but the cold reality is that there’s no practical way to put so many websites under one umbrella, Apple’s or anyone else’s, and the business of collecting pennies doesn’t seem viable.
(Apple’s iOS 9 News app is coming. It looks like a clean and well-lighted place for news consumption. It’s too early to weigh its impact but I don’t think it’ll do much to help ad-supported echo chambers.)
In a previous Monday Note, Frédéric Filloux discussed what he called Ad Block’s Doomsday Scenarios. This was prophetic: We didn’t know yet about Apple’s addition of Content Blocking technology to OS X and iOS. Ad Blocking is now moving from third party initiatives to a broad assault based on platform technology. This is going to be painful for those whose ad-supported business model is in danger of breaking. There will be blood.
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PS: A few thoughts on the Web publishing investment landscape:
Some high-quality sites, such as Om Malik’s GigaOM, have folded, while others have been rolled up into larger entities. The Huffington Post was acquired by AoL; Re/Code (née All Things D) was absorbed by Vox Media, which is now partly owned (a $200M investment) by NBC Universal, itself a part of the Comcast empire. NBC/Comcast just made $200M investment in BuzzFeed.
Other media organizations have found individuals of substantial means to buy a large stake in the company, or acquire it outright. Jeff Bezos now owns the Washington Post, and also made “a significant investment” in Business Insider (whose Wikipedia page makes no mention of Bezos). The New York Times’ largest shareholder is Mexican magnate Carlos Slim, the second richest person in the world.
Similar moves have taken place in Europe. Bernard Arnault, the billionaire head of the luxury goods LVMH conglomerate, owns two newspapers: French business daily Les Echos, and Le Parisien. Not to be outdone, billionaires Xavier Niel and Pierre Bergé, joined by investment banker Mathieu Pigasse, are heavily invested in Le Monde. And cable operator magnate Patrick Drahi now owns l’Express and a substantial stake in Libération. None of these French newspapers are in good financial health.
This is puzzling. Newspapers are in trouble due to the never ending fall in ad revenue, that’s why they get acquired by larger entities or must find a rich investor. But what do these benefactors see in properties that depend on troubled web advertising business models? Do they really believe they’ll make money with these newspapers, perhaps monopoly profits if they manage to win The last Man Standing game? Or, more disturbingly, do they want to influence the news?
quote: “Third and perhaps most important: How will these purchases be transacted? A separate account for each site is impossible. For this to work, we’d have to be registered in a single location from which we could browse, buy, and read. ”
One idea that you forgot to mention is the ‘one advertiser per week’ developed by John Gruber. Not a ‘for everybody’ solution, but maybe good for your site.
I do have some hope that Apple’s News will be able to evolve to a micropayment solution for articles. Newsstand did not work, I think, not for the payment but for the type of material.
As you pointed —correctly in my opinion— when we pay we get more selective: In Newstand we have to be selective at a month/year; with micropayments, we can be selective in a per-article way.
As a ‘proof of concept,’ remember that when we had to buy a ‘full album’ (vynil or cd) we were more ‘selective’ than when we were able to buy a single song.
Hi Jean-Louis, you should check out Blendle, a dutch startup that it’s solving that problem for paying by article. From what I’ve read, both users and publishers are happy about the solution. I have no relation with them.
Thanks for your thoughts
@Fesja: Thanks for your comment. Blendle is a very interesting product operated by super smart people. I became quite friendly with them after some rough exchanges about my Nov 2014 column about it. I still consider than unbundling news can be lethal for publishers: I personally will cancel many of my paid-for subscriptions if they enroll certains publishers. Blendle retorts that they subscribers are new to these brands, younger, etc. while people ready to dump their subscription is a minority. Maybe. Anyway, Blendle has a lot of great things in its pipeline. Expect a story in the Monday Note in the coming weeks. —Frederic Filloux
As hundreds of millions of mobile iOS consumers see the advantage of content-blocking they will want the same capability on their laptops and desktops. As consumers start talking about the benefits of content-blocking on social media, their use will snowball. It is becoming possible to imagine a completely different kind of Internet in the future.
The New Yorker seems to have solved the problem (to the extent that it’s a solution). Ads are static and are the same as appear in the print version. Each issue downloads in its entirety and is then read as desired. No loading issues because there’s no java script.
The ads are served independently of the copy but that’s a business decision. You choose to either read the ads or not. The ads could just as easily be laid out around the copy as in the print version.
At approximately $1.00/week it’s a good deal. In fact, it’s the only online media I pay for. A combination of static ads and subs might be a good compromise for future readability.
I fully agree. I don’t object to ads per se but I am not willing to tolerate the animated GIFs, Flash movies, scrollers and other such trash. Static ads are fine.
Jean-Louis is exactly on target when he describes the current scenario as a tragedy of the commons.
We don’t need such an umbrella, instead it could be handled by a secured intermediary between the reader and the publisher. The first idea is to have this inside the browser, but I’m not sure it couldn’t be tampered with. A safer possibility is to pass the content through a specific channel managed by the ISPs. This would also simplify billing. A dedicated browser plug-in would allow the user to explicitely accept paying for the content.
Bitcoin could play a critical part in making the ‘pay-per-article’ world a reality.
Of course it would require some yet-to-be-done open source work to make it easy to implement for publishers and users, but it’s easy to imagine a situation where users are presented with partial articles and asked to pay a tiny fraction of a bitcoin to unlock the rest of the article (without ads).
The technical barriers around this happening are trivial to work out really…it’s more a critical mass/timing issue that’s the hold up (classic chicken and egg problem)
Unfortunately Bitcoin isn’t a good solution for microtransactions due to it’s high transactional cost, in terms of processing power, and time. It’s parameters do not lend it to dealing with high volume, low value transactions.
If you wanted to go with a crypto currency, it would have to be something like Dogecoin (haha), or be part of the tipping economy spearheaded by Wow. Such. Business. (http://wowsuchbusiness.com)
Here’s what I’m willing to do:
A smart browser could recognize what sites I visit often, and how much time I spend there. If I had a solid report of this, I’d be willing to tell the browser “Here’s a bundle of information I am willing to share with my most valued sites.” The site could ping the browser on arrival to learn if they are valued, and upload the info bundle if they are (the site is always free to track my movement and durations within their site. It would also know what site I arrived from – vital for the site’s audience research). That info is theirs to use, distribute or sell as they see fit. A similar method could be used for micropayments or a regular donation: The site asks, the browser checks its records, and if enough time has passed, asks to make a payment or show me a summary. Giving info or money is always in my hands – sites can only ask permission – and to be efficient, they only need to ask once (upon arrival). Less intrusive than a site repeatedly asking for my email in exchange for coupons, and lets me control my information completely.
Try Privowny!
One thing ad-blocking doesn’t work on is ads embedded in Video or Podcasting.
More content will go there especially when it is not even indexed.
Google may be doing it but I don’t thing transcripts are available.
So back to the future.
“The bad news: Marginally profitable Web sites, which is most of them, will lose advertising revenue and plunge into the red.”
You see this as a catastrophe, I see it as a good thing. A mass extinction of news websites is badly needed.
As for revenue models, news companies that wish to survive need to stop surrendering control to the advertisers. They need to hire staff to reach out to individual companies and arrange sponsorship deals with them directly, and then insert those ads into the website in a manner that has regard for the reader. Again, if that means they will lose income, well then, maybe they need to lower their expectations.
I agree with Glaurung. I was confused by your essay as you noted “Too many sites are just echo chambers, they rewrite news releases, add strong adjectives and adverbs, and a bit of spin.”
Wouldn’t we benefit from less noise and misinformation on these sites? If your news site is not distinguishable from several competitors, we could probably stand to winnow the field so that is there not a glut of link bait articles out there.
Agree with Glaurung. Too many sites are just re-blog, re-spin with even worse headlines. They need to go down. They don’t provide value, but count-value.
Do you think having fewer sites would mean less noise and misinformation? History shows it would mean “noise and misinformation managed by the few vs the many.” With more sources, we get to choose the sources of misinformation we prefer. And there are at least some checks & balances.
As with 500 channels of TV and lots of stuff on them which you consider crap, the answer is not to shut down all but the few richest of those, but rather to watch what you choose and then vote with your wallet & attention.
Steve: I’m not convinced that we’re getting news with any better quality or reliability with the proliferation of “news” that’s out there. Fact checking appears to have stopped. More “news” articles seem to be thinly veiled opinion pieces, or just a collection of guesses and speculation. Losing the current mess of “news” sites may not be a bad thing.
As for your channels analogy: you’ve just reinforced what JLG and Glaurung said. The consequence of “voting with your wallet” is that a large number of these channels (sites) will no longer be viable and will have to shut down. The comment wasn’t that some central authority decide to shut them down. The comment is that the side-effect of no revenue will take care of that. This is the free market in action.
This will be extremely beneficial to the Internet. We have far too many “news sites” that are just click-bait cesspools that exist solely to profit. I could use exactly ZERO of them. If your content is good enough, people will read it and you will find a way to stay solvent.
I agree and disagree. We have too many sites and news aggregators that are there for click-bait; not properly fact checking prior to posting a story. An example of this was the very story about iOS 9 when initially reported by many sites as having built in ad-blocking, which was not factual but many ran stories that way.
What I disagree with is that we don’t want to lose the sites that are hyper-local or niche. These are the ones that are needing any advertising dollar that they can scrape up online.
We need to rid the internet of these click-bait sites that are loaded with remnant advertising and give the reader a better experience by providing readers an experience where they are accepting of an ad because they trust the website brand. How individual sites do this will vary but we all have to find a way because, as described above, we can’t expect the readers to be willing to pay for the content. Even if they would pay, in very small markets you couldn’t come close to enough readers to cover the cost of your reporter.
It’s not just the ads that are junk–a lot of the sites that rely on these ads are junk, too. The proliferation of click-bait BS websites keeps going up. They offer no insight, nothing new, no reporting or curation or anything to make it worth our time to go, but we click on a passed around link and they manage to stay in business another day.
Once the garbage ads and insane tracking are reined in a bit, maybe some of these sites will die, changing the signal to noise ratio so that the good sites don’t have to fight as hard to get seen, and the ads placed on them are of higher quality. There’s a real potential for a virtuous cycle here.
I often refer back to the new Digg as a site that’s doing it right. One ad every day, served up in the same format as the rest of the content, marked clearly as an ad, and always in the same location. The advertisers are generally of high quality, and I actually specifically look to see who the sponsor is that day, because they’re often interesting. Of the sites I frequent, it’s one of the lightest in tracking and other javascript pollution. So it CAN be done, if someone wants to.
One possibly interesting consequence of the content blocking trend could be the rebalancing of power between ‘ad tech’ and digital publishers. The web advertising ecosystem is slanted towards a handful of major technology companies which capture the vast majority of the digital ad spend at the expense of digital publishers.
There’s no question technology players (not only Google or Facebook, but also myriad of ad tech firms) have built solutions that appeal greatly to marketers. While they benefit from their scale and many still enjoy exponential growth, content creators -even these deemed as most digitally-savvy-, are sustained by very tenuous revenue models but still carry all the risk content creation fixed costs.
Besides the consideration of unlimited inventory’s downward pressure on ad rates (which always feels uncomfortable since human being attention is actually limited), one data point is often missing from the conversation: what is the average percentage of an ad dollar spend by marketers that ends up in the pocket of the publisher?
It feels that in the old print world, this percentage was much higher than in the digital world, where multiple intermediaires take an ever growing share. Publishers’ bargaining power in this environment has been very limited due to their extreme fragmentation.
After a tough transition period for publishers that over rely on digital ads, could content blocking bring about a positive rebalancing?
According to MacNN, the “war” between pro Ads (Google) and anti Ads (not their -Apple) has started : http://www.macnn.com/articles/15/08/31/temporary.fix.provided.by.google.to.prevent.app.advertising.from.breaking.in.ios.9.130175/
I think there are more shoes to drop in this matter of funding news and magazine style web content. It dawned on me some years ago that while growing up in the 1950s … my family had paid subscriptions to news and mags and watched ad-supported over-the-air TV but the full monthly cost of those media came nowhere near what my family is paying right now for just the media pipes: cable TV, internet, and telco charges.
In fact, the advertising that once undergirded news has been scooped by aggregators like Google and Apple and the subscription fees for content neutral media pipes aggravate the end-consumers of content to where asking them for additional incremental subscription fees on top of those monthly fees is absurd. The reason end-consumers pay for the pipes and use the efficient content aggregators / ad platforms is to get the content, ultimately, and that’s why I’m confident that those who provide the content are going to work it out with the telcos, ISPs and aggregators to bargain their share.
Anyone who purchases Vox clearly wants to influence the news.
Apple has one of the biggest ad budgets on the planet, why would they want to kill ads? Oh Google. Oh and this won’t work because people like free, advertisers like to advertise and developers are crafty.
I’ve come to the same conclusion that you reached in this post – that websites and publishers need to diversify revenue sources and that one crucial way to do that is through direct reader support. But, as you say, there is no way readers can subscribe to every site they go visit, so micropayments for individual pieces of content becomes the only alternative (aside from donation based model) for this support.
You bring up three concerns:
“First, we’re not going to pay $2.99 for an article on The Huffington Post. We’ll only pay a small fraction, 1/100th perhaps, of the price of a TV episode.”
Agreed, though we’re seeing prices closer to 1/10th or 1/5th per article – $0.25-$0.75 is the norm.
“Second, once we start paying for articles, even in tiny sums, we’ll become much more selective. Irrespective of the amount, the move from free to paid will influence our choices. For many sites, crossing that chasm might prove impossible.”
Agree, and this is a crucial concern. Ultimately, as you say, a paid content model won’t work for all sites. But, for a majority of quality sites, there is a subset of their audience who gets enough value from their content that they are willing to pay for it. This model can provide substantial impact even if a small fraction of monthly visitors are willing to pay a few dollars each. It’s also important to realize that not all content will be sold on any given site – much of it, as you say, is not unique or valuable enough to warrant the price point.
“Third and perhaps most important: How will these purchases be transacted? A separate account for each site is impossible. For this to work, we’d have to be registered in a single location from which we could browse, buy, and read. That location would log transactions, count the money, take funds from our credit card or bank account, pay content suppliers on a weekly basis… and keep a percentage for its services.”
As you say, there is no way you could bring together all these third party sites under some agreement to the scale that is needed for this to work. Instead, the key is to recognize that the micropayment model is incremental on top of existing premium subscription offerings and can be placed alongside those existing paywalls – which is what my company, CoinTent, enables. That micropayment + subscription model is where we are seeing the most success and growth.
Brad Ross
CEO, CoinTent
http://www.cointent.com
If the Huff Post isn’t worth, say, $5.99/month (not $2.99 an article, nobody pays that for a hardcopy newspaper!!!!!!!!!!!!!!) then it’s too much a part of the echo chamber, and can die off. As Bradley notes, of course, that’s not reality, and therefore the author of this piece is building a bit of a straw man.
Besides, Puff Hoes relies on a lot of indentured serfs vs. high maintenance, sometimes high dollar, celebs. It can adjust its business model.
Otherwise, the likes of the Guardian? Before giving me a “you’re not supporting us” note when I have AdBlock on, try a paywall, quit losing money, quit selling off assets and quit burning through trust funds.
Paywalls aren’t ideal, and they’re not the full solution. But, and especially if you don’t do a PayPal tip jar, they are part of the solution. Given that noted paywall scoffer and derider Mathew Ingram worked at GigaOm, and it had no paywall, I have little sympathy, but a fair chunk of schadenfreude, for its demise.
Again, Brad is right otherwise. Micropayment systems exist, and are feasible. Wikipedia founder Jimmy Wales has been (sadly, without much success) touting them for years.
“Wikipedia founder Jimmy Wales”… not really. Dr. Larry Sanger was far more responsible for Wikipedia’s creation than Wales was. “sadly, without much success”… truly describes Mr. Wales.
The Guardian has a very different ancestry and viewpoint. Your position will change once you learn about and understand it.
“When finite advertising budgets are divided by an almost infinite number of Internet billboards, the revenue per ad tends to zero.”
I don’t agree with this assessment, because it ignores several things. First, global advertising is up, in an almost unbroken stretch from the dawn of online advertising. The Economist’s story last week has a number of excellent charts. Newspapers and magazines have a declining portion of ads. http://www.economist.com/news/business/21662543-people-spend-more-time-social-media-advertisers-are-following-them-brand-new-game
Second, advertising isn’t infinitely divisible. Even with a trillion locations for placement available a month, ad networks sell subsets of inventory. True, the rate is in the sub-$3 CPM level for views on sites that have general traffic, but with targeting, rates can still be 10 times or higher. Many sites have significant unsold inventory which they offer to remainder networks which pay essentially nothing, and show terrible ads. It’s the reason we see so much awful advertising on sites that fail to pull in many ads or a qualified audience that allows higher rates.
Third, it’s a big head/magic middle/long tail situation. It’s not that the New York Times can’t do well with ads. Rather, that (as you note later), sites that are marginal today will be failing tomorrow.
“As revenue from print ads continues to decline, Web ads aren’t picking up the slack”
If we’re looking at print legacy periodicals that have digital components, yes. It’s a much more complicated story for born-digital and digital-only publications, given the steady increase in online display and classified ads (as opposed to other kind as shown in the Economist’s charts). The chart you’re using relies on American data only, as well.
“An early example is Crystal by Dean Murphy, which demonstrates marked improvements in page load times and sizes”
I just tested pre-release three blockers for Macworld with the latest public iOS 9 release, and the time to load a page is misstated in many cases, because it’s the “time to be useful” that I think is a better measure than a “time to complete loading.” On that basis — in which Macworld is a strong offender! — the difference remains noticeable for most sites, but not as significant as some of the charts.
The bigger deal is the amount of data loaded that is unrelated to a visitor’s needs and, in some ways, the publication’s: it’s entirely about third parties and the publisher gets a benefit, but perhaps not as significant relative to what they give away.
“Marginally profitable Web sites, which is most of them, will lose advertising revenue and plunge into the red”
I fully agree with this. Sites that rely on more conventional web ads are going to have a lot of cold water poured on them. Sites that have a mix of subscription, donation (whether non-profit or of the crowdfunding for-profit variety), native advertising, video-based ads that benefit from users wanting to watch video content, and non-offensive advertising fed (first-party) directly from a publisher’s site. (Read Marko Karppinen’s smart advice to publishers about iOS 9 changes: https://www.richie.fi/blog/ios-9-what-every-publisher-should-know.html )
“Some very specialized sites, such as Ben Thompson’s Stratechery and Ben Bajarin’s TechPinions, are able to generate membership revenue because the quality of their content — sober analysis versus mere reporting — makes it worth the price of subscription.”
I subscribe to Stratechery, but as a “mere reporter” who contributes to the Economist, which largely subsists from subscription revenue, you might listen to its deputy editor in charge of digital strategy, Tom Standage, who has noted several times recently that the Economist’s advertising is icing on the cake. It’s unique, I agree, both as a news organization and its subscription price and reader loyalty.
Ben and Ben do a great job of taking fresh information, clear analysis, and good writing in specialized fields in which people pay to get information on which they can act. More generally, news organizations that still engage in strong, original reporting day in and day out are the ones that will find more of an audience over time as the weak reporting sites, the ones that mostly publish essays, post a zillion items a day, and aggregate from elsewhere, fall by the wayside. This will in turn allow these stronger sites to erect paywalls that are more robust.
“Sounds familiar? In 2003 Apple opened the iTunes Store with two innovations: Content by the slice and micro-payments; selling music one song at a time for 99 cents.”
I may be old, but I know you’re more of a veteran than I am: I used CyberCash back in the mid-1990s for microtransactions that could be pennies in side. I’ve implemented or tried a couple dozen systems since. Every one of them has the network effect problem you mention. Until there’s a threshold of tens of millions of participants, pennies don’t help. And users don’t like being nickeled and dimed on reading.
I’ve thought for a long time that a consortium (like the one Steven Brill attempted) that an affiliated group of sites could charge a single fee for unlimited access and do some work to split it out fairly. But that is like proverbial cat herding.
I agree. Aswath Damodaran, Professor of Finance at the Stern School of Business at NYU, offers a projection of the growth of online ad revenues projected out to 2025 (for the social media space only). http://aswathdamodaran.blogspot.com/2015/08/big-markets-over-confidence-and-macro.html
He finds that even with 5% compound annual growth over ten years and online ads growing to 50% of all advertising, there are not sufficient ad revenues to support the market capitalizations of just the major existing social media companies. And note that he doesn’t even consider the implications of this for the online publishing segment which we are discussing here. It’s a worthwhile read.
There is not and likely will never be enough advertising revenues to support all the markets and companies that hope to fund themselves through online advertising alone. The best will either add or switch to a subscription model.
If a user refuses to be bothered by ads and doesn’t want to pay to access content, then said content has no value and the providers should wonder why. This is not different than any other product: if users don’t see the value and you can’t provide it for free, then you are out of business.
There is another way to go around Apple’s ad blockers: apps. It’s much easier to make sure that ads are not blocked in an app, and I’d be ready to bet that if a user installs a free app, she will be willing to put up with the ads.
“If a user refuses to be bothered by ads and doesn’t want to pay to access content, then said content has no value and the providers should wonder why. ”
I was going to say the same thing myself, ‘value’ is what a person is willing to pay for something, if people aren’t willing to pay for it, it has no value. It should then be asked why the publisher should expect to be paid for it. The fact that it cost them money to offer it not a valid reason whatsoever.
“If a user refuses to be bothered by ads and doesn’t want to pay to access content, then said content has no value and the providers should wonder why. ”
That’s ridiculous.
If you find no value in a site’s content you wouldn’t be there.
Who are you to say whether a site deserves to exist?
It’s the equivalent of eating in a restaurant and complaining about the bad service, so your meal should be free. You walk out, but show up the next day. Same complaint. Same walking out
“Get your waiters up to my satisfaction and I’ll pay!”
No. This is a crappy restaurant, stop walking in the door.
That’s what I do with sites with pop ups and bad load times, I just don’t go back. When you use ad blockers, you’re saying you like the content, but want it for free/at your convenience.
Theft of services.
Ads as they are now are user hostile. Pages take longer to load, the battery drains faster and many strange scripts run that may make the browser unresponsive. Additionally, ad networks barely validate the numerous ads and scripts they serve. Some of them could be trojans.
So here’s an idea: serve the ads from the site’s server and forgo all of that client side scripting. Run the ad server’s validation code on THEIR server and not MY browser. Use whatever DRM to ensure the ad networks validation system isn’t compromised. Maybe if they risk their own server, they’d be a little more discriminating over which ad network to use. Plus I get just the image or movie and none of the scripts. Since the ads would come from the same domain as the site, ad blocks can’t work.
The browser won’t be able to cache the ad for multiple sites, forcing a download every time the same ad is served from a different site. That’s a minus — or is it? How much does my phone cache to begin with? May be it doesn’t cache much and I’m still stuck downloading the same ads over and over.
If you make things nicer for the user, maybe they won’t seek to block your means of revenue.
What would people think of an aggregated, all-you-can-eat subscription model for print content in the mould of Apple Music or Netflix? Like if Apple News added a subscription option, $5, $10, $15 per month, whatever it takes to make it viable, and for this you get to read everything they have, as much of it as you want, with no ads, and (70% of) your subscription money is apportioned among publishers according to whose content you acutally read.
If they can charge enough to make an article view by a subscriber worth more than a pageview of an ad-filled website, then there’s incentive for publishers to make their content available on the platform (otherwise they’re leaving money on the table) and more content on the platform makes it more atractive for users to subscribe.
As a grizzled veteran of the entertainment industry it is endlessly amusing to see tech companies and publications’ hand-wringing over the disruption of their business model. When piracy was cratering the music and dvd industries, the same forces called it “disruption.” It was incumbent on us to adapt or die, preferably die.
And that was perhaps the main thing: The glee with which this message was delivered. Now suddenly we’re all meant to view a similar disruption with grave seriousness, and fret over all the lost jobs.
Apparently only other people’s information wants to be free
It wasn’t right with the music/movie industry and it’s not right for online publishing.
People think everything should be free until it affects them.
You know, like working sans-pay check.
I think your column is spot on.
What I will add is that this problem is largely caused by the ad network themselves, and the content publishers need to look in the mirror for letting the ad networks do this to them. Content Publishers can choose to only do business with an ad network that follows some basic rules — which I’ll get to in a few paragraphs.
I used to tolerate ads, thinking that it was the right thing to do because the creator deserves to get paid for their content. Over time, I watched page load times slow to a crawl, endured crazy CPU and memory usage for grabbing a page of text, and in the last six or nine months started having web pages crash on me dozens of times per day. Someone (I forget who, maybe the Verge) even wrote a column blaming the mobile web browser crashes on mobile devices only having 1 GB of RAM — 1 GB to view a plain text news article?!? Are you kidding me?!? If my browser needs more than 32 megs to display 4k of plain text then I need a new browser (or an ad blocker)!!!!!!
Then I loaded AdBlock into Chrome on my PC. All those problems went away. And I can’t wait for iOS 9 and Crystal to let me do the same for my mobile browsing.
I am willing to look at the ads. If you transparently slip 3 or 4 banner ad images into my web browser, I’ve got no problem with it. Advertise the size up front so the page renders correctly, hand my browser the image URL, and don’t send me any javascript code. But that isn’t what the ad networks are doing today — they are loading active code, consuming crazy amounts of CPU, memory, and bandwidth. The page jumps around each time a new image starts because the size isn’t defined upfront. And they aren’t even doing it quickly!
I totally understand your comment about the Whitelist being extortion, and I also have a problem with AdBlock Plus asking advertisers to pay to be on the whitelist. But my utopia is a whitelist process based on simple social niceties being followed by the ad network. And if that whitelist happens to be Apple’s Newsfeed system — I’m in.
Just pointing out a typo:
…entertainment has lead to a new kind of…
It should be “led”, which is the past tense of “lead”.
When the web appeared none of us consented to bing digitally stalked 24/7/365 by third parties trying to sell advertising- at least not knowingly. In addition, the last time I checked, I pay Comcast, AT&T and Verizon a not insignificant amount of money for my web access. Also factor in that I pay subscriptions to the New York Times, Washington Post, Los Angeles Times, The Economist, a few specialist and professional websites and a number of podcasts that I listen to for the bulk of the online content I consume.
I am hardly a freeloader.
I also despise advertising- especially the obnoxious kind like the superimposed nonsense almost every TV channel flashes over content. I pay Comcast a pretty fair amount of money for what years ago was promised to be commercial free channels we would pay for back when there was science on Discovery, educational content on TLC, History on the History Channel and Music on MTV. What we have now is essentially nonstop ads wrapped with a collage of mostly off network reruns that were free the first time around.
TV used to get by on 7 minutes of ads per HOUR and made billions doing it. Why is it that they have to run better than 40% ads AND charge an arm and a leg for content? Maybe content creators need to take a pay cut and get costs under control.
I hate advertising and am using this site via a VPN and a number of blocking methods to keep as much of the nonsense ruining the web off of my screen. I know what websites I wish to use and have no need to be bombarded with crap I will not look at or ever use. The more intrusive advertising is the less I want to use the product being advertised.
My guess is that the web would be a better place without most of the clickbait compilations that pass for websites these days. They cannot go broke fast enough to suit me.
GigaOM was high quality? Hardly. Just another link bit site.
How to fund professional journalism?
1. Advertising: You NEED to divert people’s attention away from your content, where you’re trying to tell the whole truth, to content that doesn’t.
2. Hard paywalls: Can’t sample. Can’t share. Hits credit card. (Blendle does however look to be a partial solution to this.)
3. Metered paywalls: Too many free alternatives and work-arounds.
4. Affiliate sales: Turns publishers into vendors, pushing for sales. Doesn’t capture the assistance for sales not made through the link, and doesn’t work well in print. Or
5. Selling your own stuff. Ditto. Plus can be tacky.
I’ve been working on Rbate, where publishers (print, online, and other consumer helpers like full-service retailers, who have been hit by showrooming), make their money when their content helps someone. This money either comes from the makers of the products that the content has helped people choose (content that includes bad reviews which led people to an alternative — publishers are not driven to push what they’re writing about), as well as from donations from cash rebates received by product purchasers (doesn’t hit their credit card), encouraged by Kickstarter-like rewards.
General journalism isn’t simply cross-subsidised by this market-related journalism. Any content flagged as helpful can earn donations out of rebate payments.
The details are available here: http://rbate.com/helpers/summary
Mark, Rbate
Oh my – more disruption. Disruption is most always a good thing. So Apple, keep on keeping on.
This is a nice summary of the increasingly critical turbulence threatening to kill journalism, and nicely coincident with a post I just completed that suggests a new kind of solution — a relationship architecture I call FairPay (which has been described on the HBR Blog). The new post is “Patron-izing Journalism — Beyond Paywalls, Meters, and Membership” [http://bit.ly/1KXJLYL ] — some extracts:
—
These are very turbulent times for journalism. But as Peter Drucker said, “The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic.” What we need is a new logic. What I suggest is a new logic that draws synergy from all relevant revenue streams, in a way that leverages digital, to radically transform the relationship of journalists with their audiences.
Customer or patron? Why be a customer? Why pay? The only way for journalism to survive in this new century is to refocus on a new logic for patronship — getting readers to patronize content providers in the fullest sense: “to give money or support to.” To find sustainable business models for journalism in a digital world, me must figure out how to find patrons (in this broad sense), and how to work with them so they are happy to contribute at sustainable levels.
…
We have a growing variety of revenue sources [recapping a conference on membership models at the CUNY Tow-Knight Center last week], but none a silver bullet. Where is the overarching synergy? What is tomorrow’s logic?
I suggest the answer is to link this rich constellation of value propositions into a coherent, adaptive process — one that seeks to find the right combination of value propositions for each individual, match them to their willingness to pay, and serve them in a customized bundle — in a cooperative way that makes every regular customer into a true patron. If journalism has value, shouldn’t those who are served by it recognize that value, and pay to sustain it? (As has been observed, “if you are not the customer, you are the product.”)
…
Re-engineering the value proposition of journalism for the digital era
The big picture idea is that FairPay refocuses journalism businesses on their relationship with their individual audience members — with all the tools of the digital era — to center on personalized, win-win value propositions. It builds this relationship on a cooperative understanding of individualized value that integrates all of the relevant elements on both sides of the value exchange. It seeks to enable a holistic view of value (and revenue) related to all aspects of the service that journalism provides — basic subscriptions, premiums, membership options, perks, and any other kinds of offers, over all aspects of the value exchange.
From the provider to the consumer, FairPay focuses on the total value of all kinds, as actually delivered to each particular consumer — the value-in-use for exactly what is consumed and how (what items, how many, how intensely), including content, membership perks, etc. — the value of that experience and potentially even the outcomes that result (enjoyment, appreciation, and even the results enabled — did our advice improve your health or you stock market returns?). This can also include “soft” values, such as
–service and support
–participation, listening, and responsiveness (comments, access to the journalists)
–events and merchandise
–the social value of investigative journalism, community services, and good corporate citizenship.
From the consumer to the provider, FairPay considers not just monetary payments (subscription or membership fees, or pay-per-use), but other currencies. Thus it factors in credits (the “reverse meter”) for
–attention to advertising (including the possibility of customized levels of ad loads) and
–personal data that can be used or sold (again with possible customization)
–the value of user-generated content
–the value of viral promotion and leads
–up-sell/cross-sell revenue potential
–volunteer-provided services to the provider
An ideal economic exchange would fully consider all of these aspects of value, and determine how to balance the exchange in a way that shared fairly the “economic surplus” (of value over cost) between the provider and the consumer — as described in Harnessing the Demons of The Digital Economy [http://bit.ly/1Q4KFXR ]. That post explains how this is not only an economic ideal, but how FairPay provides a practical process for getting consumers and providers to cooperate in approximating that ideal — an adaptive engine for jointly evaluating the value actually received, and sharing fairly in the surplus.
FairPay re-engineers how the providers of journalism interact with their audience members to deal with value, compensation, and sustainability, and creates a new balance of power. It recognizes that journalism co-creates value with its audience(s), and applies an adaptive method of co-pricing that (1) gives audience members the power to pay commensurate the value they perceive and can afford, while (2) retaining the power for providers to demand that be done fairly and sustainably.
—-
There is also an answer to the “ticking meter” problem that has made “pay as you go” usage-based pricing and micropayments so unpopular, more clearly addressed in this other recent post: “Post-Bundling — Packaging Better TV/Video Value Propositions with 20-20 Hindsight” [http://bit.ly/1DHToNA ]. Basically the idea is to not have a set unit price, but to track usage, price after the usage is known, and apply discounts to price for usage in a fuzzy way that consumers can accept as fair. (That may sound strange, but FairPay provides a process that can enable that.)
FairPay has generated interest from many companies and collaborations with noted academics. It is not a product, and am working on this as a pro-bono project and welcome inquiries from those who might test it or spread the word.
[…] Life after content blocking » Monday Note […]
Well, they have culled the goose of the golden eggs. Since the early days of Flash banners, advertisers developed a curious notion: the notion that the computer is not owned by the user; it’s just a playing field in which the advertiser can waste resources without end, and it’s the user’s responsability to keep feeding the beast with more resources and more computing power.
Of course mobile devices revealed the problem. No longer hitched to which, in practical terms, equals an infinite source of energy, each tiny amount of energy counts.
Apple understood this extremely well of course when they ditched Flash. Apart from the obvious performance problems due to an extraordinarily incompetent design, it was a malicious black box which, for the benefit of the advertisers, avoided any user control over when animations and/or sounds were played, effectively denying suh obvious things like listening to music in peace while browsing.
The funny thing about all this is, after all, many modern media sites (the equivalent of newspapers or magazines) have traps of sorts using text as a lure. And, amazingly, one attracted to their site they do their best to make sure that you won’t read the content, because it’s often impossible. It’s not only ads, but all kinds of nasty JavaScript code fighting such natural things like zooming text in order to actually read from a tiny screen. And “modern” websites are the worst offenders, with over complicated websites that try to behave like native apps.
One of the stupid misconceptions endlessly echoed by the media is that the manufacturers intentionally degrade the devices with built-in planned obsolescence. What is actually happening is that most of those media companies are rendering old devices unusuable because the horsepower to render a stupid web page is growing withuot contol. They are making devices obsolete themselves.
Until recently not many people resorted to ad blocking. After all most people weren’t aware of the abusive tracking practices carried out by advertisers, and they could kinda tolerate the performance degradation. But maybe it has crossed what a famous blogger called the “f**k this point”.
What will happen with the cat out of the bag, with ad blockers used by a sizeble user population? I guess there’s no way back. How can the industry go back to a responsible, respectful advertising model when many users will just plainly refuse to remove the filtering? If ads had stayed more reasonably I am sure we wouldn’t have reached this point.
It’s going to get very interesting. I bet some publishers and/or advertisers association will try to sue Apple.
Gosh, sorry about the horrible typos.
[…] What does the web look like when ad-blocking _really_ takes off? […]
[…] Read Jean-Louis Gassée, http://www.mondaynote.com […]
As Glenn intimated, ad blockers don’t block first-party native ads. But you need at least one salesperson to sell native ads. You also need to help advertisers create these ads because they’re more complex than a display ad. It’s not easy but not impossible.
On another note, I concur that GigaOm was not a quality website. It seemed like a distracted company with one foot in the ad model and one in the research model, neither of them compelling as a result.
And because you didn’t find GigaOm to be high quality they shouldn’t have been able to exist/display ads?
I assume you also will like my pay as you go movie idea.
You watch the movie and pay as much or little you want when leaving the theater. Damn production costs. Meet my standards!
kapadokya hakkında en iyi bilgiler bu adreste..
Whenever I try a new adblocker, the first action I take is to block Doubleclick. That immediately stops 25-30% of all ads. One filter and screw you Google.
Fear not; no one ever downloaded an ad blocker to suppress a print ad.
[…] the Monday Note today, ex-Apple executive Jean-Louis Gassée […]
[…] Read the full piece at Monday Note […]
[…] the full piece at Monday Note From […]
[…] the content industry starts to vocalize its concerns and counterstrategies to the rapid rise of adblocking adoption, the trackers that pepper every page start to look a lot like fracking wells. They tunnel deep into […]
I think anyone is wasting their time getting upset about this. Any device you look at content on can be considered, for all intents and purposes, either a book or a projector. Back in the day, if anyone wanted to write a book they got a book deal with a publisher or they self-published their own book. It’s no different today. Websites take on the same risks of self-publishing as book self-publishers can and do: the more than likely chance they’ll never make a dime.
Apple devices are just a small slice of the entire content publishing universe. The smallest, in fact. Sky is falling in just yet…no.
Signal to noise ratio online has always been way too high. As author more or less said yourself, it’s an echo chamber. The reason is it only takes a handful of websites to publish most of the news and maybe another handful to spew back with decent commentary, but for every Big Topic out there thousands more websites exist simply to re-spew, re-spin, and re-work existing, already well-known information for just one reason only, and that’s to make money off the views and clickthroughs on ads. So say you’re excited about a topic that you start reading about on HuffPo, and seeking further angles on it you check out 10 other websites with similar headlines, only to get four video ads autoplayed, 16 web beacons set on your computer, three supercookies that are practically impossible to destroy, and a whole multisite host of logging against your search terms, IP address, browser version, time spent upon site and ads and other info (comments written, username as tied to cookies, etc.) while learning not one new fact or reading one more insightful thought on the topic you were originally excited about. This is the web today.
It sucks.
On the one hand, you never want so many website owners to be forced out of business that information becomes too-tightly controlled and even becomes corrupted as most national offline media already is (and has been, forever). On the other hand, what’s going on online needs to stop because it’s wasting everyone’s time and not leading to the increased educational capability the original vision of the Web promised us. I’d say most content creators are not creating content at all. They’re simply copying headlines – verbatim – to make money off of ads.
To see the injustice of this, imagine a newstand with 20 magazines. Ten of them sport much the same headline that first catches your eye, which is on a bit of news that seriously intrigues you, so you buy eight different mag titles. Upon getting them home, instead of eight different opinion pieces on the headline you’d hoped to dive into, you get seven magazines full of ads with one half-page article that simply re-spews the news already contained in the headline, and only one really deep think piece in the eighth magazine you open up. Welcome to the world wide web.
In the pay-to-view model of online content viewing, you pay the same price for all eight of these headlines ($2 each) yet only one is worth your time. You could not know that until you opened and read all eight. This is inherently unfair and why the ad-supported model came to be accepted in the first place.
You say a subscription model can’t work but in fact, it can. Websites – most of them, anyway, except for the real stubborn, free-thinking outliers, which there will always be – will have to merge or else simply go out of business. Makes the whole payment processing thing a lot easier, I think. Personally, I can’t wait for it to happen. I’ll continue to run my blogs at no cost because I’m not online to make money (not even off a single ad). I’m here because I want to be and going online with my work is a lot simpler, cheaper and easier than pursuing offline publishing, not to mention it has much further and more instantaneous reach.
Lastly, *thank you* for not making me a) sign up for an account or b) sign in with my Facebook, Twitter, or whatever social media account simply to comment. I miss this sort of thing.
Absolutely agree with the conclusion of your article and most of the content but I think you miss one thing: until consumers are really in the loop, meaning the are asked about what they want and do not want, and their data is on their side, we will remain in this black & white situation that leads nowhere but disillusion: users will lose diversity – as lots of websites/services will go bankrupt -, and only the bigger ones will stay alive, at a very high cost though… so a lose/lose situation.
The reality is that users have lost confidence into websites and services companies as they became the product, without any alternative and control over it, and start to feel that they are losing their privacy, as they feel tracked, every time, everywhere. So they started to protect themselves. And the recent likes “Spotify” T&Cs changes are more and more considered as abusive by users as they are not related to the service delivered to them. But again, no alternative except stopping/deinstalling the service.
In the last decade, the market decided to go with the “guessing” model, such as behavioral or predictive ones, which deliver(ed) better results but upset more and more people. Without talking about waste of money and energy: how many times we receive Ads for few weeks on something we have either just bought or decided not to buy.
Alternatively, what about if users are in control of their data, of what is proposed and displayed to them: they control their preferences and intentions and can share them with companies they trust and like. Good Ads are accepted and could be very valuable and generate good return as they are “required” by users.
@Privowny, we believe that consumers empowerment will lead to a win/win situation where personalization is welcome as it is controlled. And it is valid for the Ad business as well as your all digital life
[…] This post originally appeared at Monday Note. […]
[…] Much more found HERE. […]
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Jean-Louis Gassée is discussing several topics in this piece. One is the fate of the traditional newsmedia if it becomes possible to purchase single articles. Another is whether such a transaction system is technically possible.
After having discussed these topics with a lot of newspaper people over the last few years, I am convinced that the problem lies in the first topic. The idea of selling articles feels scary, unknown, to a lot of people. But it is also easy to slap Blendle or other micropayment systems with the argument that selling single articles will bring so few pennies that it is not worth the attention of the CEO or editor-in-chief.
What we miss here is that the single article business is only the top of the iceberg of a new business model for newsmedia and periodicals. As the readers are free to move around in the Internet, content consumption is by definition fragmented. But this is not worse than eg the market for confectionery, or say yoghurt. Who would even propose that candies or yoghurt should only be sold in one big size package, with a fixed assortment and fixed delivery schedule? And free samples be distributed as teasers to all those millions who refuse the big size packages.
Candies and yoghurt are sold in a multitude of packages, sizes, assortments and sales channels. This causes also their manufacturers to develop a lot of respective different product brands, but still keeping the megabrand of the manufacturer visible on each package as gurantee of quality.
The New York Times is a megabrand. But Paul Krugman is a brand in himself.
So the case is not about single articles. And it is not about Blendle, which is only one solution, a kiosk for single articles. When understanding increases about this new business model, the transaction system is already there. The business of collecting pennies is viable.
[…] publicidad que hacías en el ordenador, mejor vete pensando en cambiar de estrategia, porque el porcentaje de tus usuarios que acudirán a tu página con un ad-blocker instalado va a experiment…, y tratar de luchar contra ello por las malas negándoles el acceso a tus contenidos si no lo […]
[…] En realidad, ya está sucediendo. La disrupción de los medios digitales trae consigo una inevitable consolidación del sector. Tal como apunta J.L. Gassée en su blog: […]
[…] Features Eight medieval motion pictures with a celeb studded forged. With over 10 hours of content material, this is likely one of the highest medieval Film […]
You have a couple things wrong here. For one thing, plugins like AdBlock Plus don’t block ads based on the site you’re visiting, they block based on the origin of the ad. You don’t have to get your own site whitelisted to get around AdBlock if your’e a content publisher. Your *advertising providers* have to get whitelisted.
Second, to get whitelisted, you do not have pay AdBlock a fee. You have to publish ads that fit within their guidelines of acceptable advertising, which is a set of rules designed to exclude invasive and obnoxious ads while letting through subtle advertising (like Google AdWords). These rules are based on research that AdBlock Plus has done about what their users actually want, which isn’t to deprive content creators of ad revenue, but rather to block abusive advertisers.
If an advertiser meets AdBlock’s guidelines, they have to fill out a form and sign a binding agreement with AdBlock. There is no fee involved, and no extortion. If you’re a good netizen your ads can be whitelisted.
Users still have the choice to block “acceptable” ads, but AdBlock’s own internal numbers show that few do.
So basically the whole premise of your article is based on false information. Please do your research; the latter part of this info was available on AdBlock’s FAQ, and the former is basic information about how internet advertising works.
(I am not an employee of AdBlock, but I am a happy user and I do produce online advertising as part of my job, including for some advertisers who meet their guidelines)
Barely any of you try to understand the relationship between “free content” and “keeping that free content.”
This so-called free-content wouldn’t exist if they didn’t have a way to “pay the bills,” and make a respectable living.
But all the “users” out there, just want their so-called “content” without ever understanding how it is possible?
Ask yourself this – would you “go to work” for free? HELL FRICKIN’ NO!
So why do you expect the (good) we publishers also to work for free?
Get your heads out of your asses, and have a little respect and dignity to those who try to inform or entertain the world.
And more importantly – it seems that many of you “hate” certain sites – so you obviously aren’t visiting them, right? So what’s the problem?
Ad Blocking is a slippery slope. You accept “in-app payments” from Apple, but you cannot tolerate a few blinking ads to display with the content you read?
Something wrong here.
The minute you get 100% FREE everything with no benefit to anyone – you’ve found yourself cornered in a world with no free thought or opinion.
What next? Small businesses on Main Street America are not expected to make a profit? Ha!
Your own death bed, quite frankly.
[…] Un article intéressant sur le « bloquage de publicités » sur le Web. […]
[…] Apple’s grand unifying strategy: high profit margins Life after content blocking Six Colors: On RSS readers and the much exaggerated “death” of RSS Política: […]
I am totally agree with you in this
[…] obviously need to fund operations. As Jean-Louis Gassée points out, however, web ad revenue is not astronomical. So what to do? Better relationships with the audience and increased personal and financial […]