The Washington Post is now reportedly restricting content for users who block their ads, forcing them to sign up for a newsletter or subscribe to the site instead. Underpinning this is software that can detect whether a user is using an ad blocker from companies such as Sourcepoint. In addition, Apple and Google are now locked in a battle over iOS9’s ability to shut down mobile ads.
If this continues, users could eventually find themselves between a rock and a hard place. They will either have to accept extremely annoying ads (which can also sometimes be harmful to computers), clutter up their email box with newsletters, or have to pay for content that was formerly free.
Beyond news, ad blockers could also push up the price of anything subsidized by advertising. For example, Fandango.com imposes a service charge on the sale of movie tickets through its site but also carries advertising in order to supplement revenue. If the site is no longer able to monetize its ad space, it would likely raise ticket prices on consumers to make up for the lost profit. This can apply to thousands of businesses across the Internet.
The most disturbing aspect of this conflict is that there’s no obvious solution to the problem. While users abhor ads, they would be equally turned off by having to pay more. While technology providers have every reason to provide the option to block ads, websites that rely on ads for revenues are highly motivated to thwart such technology and force users into a corner.
This threatens not only digital advertising but the very model of the Internet, which has been a medium to provide increased choice and decreased cost for consumers for everything from music to news articles and household items. An all-out assault on advertising will disrupt this dynamic and make the Internet uneconomical for sellers or considerably more expensive for buyers.
To be fair, online vendors aren’t really to blame for the conflict. They can’t survive without some type of revenue stream and in the absence of ads, they need to make up the difference from consumers. And with 47% of U.S. web surfers regularly using ad blocking software, according to a University of Oxford study, and with ad blocking projected to result in $20.3 billion of lost advertising revenues in the U.S. in 2016, according to research by Adobe and PageFair, content providers are in dire straits.
But if the two sides are unable to find a way to balance their respective needs, consumers will suffer. That’s why the war over ad blockers is a much bigger deal than you realize.
Kumar is a tech and business commentator. He has worked in technology, media, and telecom investment banking.
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