“Get Rich Soon”, “Lose Weight Fast”, or “You are 999,999th visitor to this site. Click to claim your prize now.”

While browsing favorite sites, you often stumble upon such advertisements. They appear intrusive and distracting. Additionally, they present security challenges as the ads are served by third-party sites whose authenticity may be questionable. Such ads may lead to phishing or spoofing attacks by tricking users to reveal confidential information. They may also lead to malicious sites. (See video: What Is Phishing?)

Ad blocking software, also simply called Adblockers, are popular computer programs or mobile apps that have been very effective in blocking online ads on websites. Once installed, they prevent the requests going to ad servers, and instead display white space in place of ads.

They offer multiple benefits to the end user. Without ads, the user gets a neat view of only the desired content. With ad portion(s) being blocked, the page load speed is improved. Adblockers also reduce data consumption for end users, resulting in cost savings.

Such benefits appear great, but there are a few major hidden disadvantages in using adblocker software. This article assesses the impact of adblocker software on websites, their businesses, and eventually on the end users themselves.

The Business of Online Ads

One pays an upfront cost when buying a printed magazine, a newspaper, or a book. Similar content can be accessed online for free on various websites, without the user paying anything to the website.

It’s the ads on these free websites which pay for the websites’ business, and that keeps them running. (See related: How The Internet Web Ad Industry Works)

According to latest statistics, online ads constituted a whooping 89.5% of total revenues of online giant Google Inc. (GOOGL) in the year 2014. TechCrunch reports the overall online ad market to be at $121 billion for the year 2014.

Blocking ads can make or break a website, and even threaten the online business industry as a whole. With such high levels of revenue, it is no wonder that, in 2013, “Google removed Adblock Plus and other ad blocking apps from the Google Play store.” Adblocking software like Adblock Plus continues to remain available on the Mozilla platform, which reports more than 357 million downloads. Imagine the impact that it also has on various online businesses.

Stakes are high, and the online business industry is getting hit severely by these adblockers. (See related: The Industry Handbook: The Internet Industry.)

How Adblocker Affects Websites

Ads are the bread and butter for websites. They pay for the website’s infrastructure, operations, content and the payments to associated staff.

Free content is accompanied by ads. That’s the implicit and undocumented deal between the visitor and the website. Blocking ads can force your favorite websites out of business. You may no longer continue to be able to access its resources. The site owners may move to new ventures, but you as the end user will lose your preferred resource.

The impact can also have repercussions for hundreds of journalists, columnists, content creators and editors, who earn their livelihoods from the online content industry. It’s the ad revenues that pay them.

It’s not just the ad-clicks, the referrals, or the generated leads that pay the website. There is also a cost per thousand (CPM) impressions model through which a website earns exclusively on display of ads, even if the users don’t click on any ads (say, $5 per one thousand impressions, without any clicks). Adblockers block everything, even the display of ads, which hurts the site revenue.

The majority of startups and entrepreneurial ventures are taking shape through online websites or app-based models. A significant number of them rely on accompanying ads. Blocking ads can spell doomsday for these budding businesses, which otherwise may taste success when accompanied by ad income. (See more: How To Start An Online Business)

Ad blocking may result in an uneven field of competition. For example, a million-dollar business can partner with a popular adblocker company and get its ads white-listed. A smaller publisher may not have that bandwidth, and continue to take the hit with eventual results of being shut down.

Other Unsuccessful Models

Other models have been tried such as offering ad-free content for a small fee, but with little success. Computer World reports “Only 1,000 of Geekzone's 350,000 unique monthly visitors have been willing to pay $25 a year for an ad-free option.” Users want to see ad-free content, but don’t want to pay even a small amount for it.

Adblock Plus offers “Acceptable Ads” program, where a publisher’s ads can be white-listed and enabled, provided they meet Adblock Plus guidelines and the publisher pays a fee. With multiple adblocker software available from different firms, publishers can’t pay separately to each. Eventually, such payments affect net inflows for publishers.

Other models include the PageFair appeal method, which attempts to display an appeal on webpages, requesting users to unblock ads. ClarityRay, which recently announced joining Yahoo! Inc. (YHOO), disguises the ads in attempts to let them through the adblockers. However, none of these model has found sure success.

At present, there is no apparent solution in sight between the adblockers and the website publishers. It continues to remain a grey area.

The Bottom Line

Free ad blocking software is easy to install, and it serves the needs of end users who are tired of obnoxious ads. They may not really care about a website going out of business, as today there are often multiple other sources offering similar content. A middle path may be feasible. Websites should ensure that they don’t overdo ads, and keep them simple, relevant and useful to end users. End users should accept such non-intrusive ads, and thus support their favorite sites monetarily, which will eventually help both producers and consumers of online content.

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