June 14, 2001

Should Publishers Worry About Ad Blocking Software? SaveTheFreeWeb.com's Bill Dimm Explains Reality

SUMMARY: A debate has been raging among content industry pundits since ad blocking software company interMute recently announced it would be on multiple millions of PCs by the end of 2002. Some people say publishers with Web ad revenues should be very, very worried about this. Others say anyone kicking up a fuss is just a fear monger. We turned to Bill Dimm for a reality check.
Dimm is CEO of HotNeuron (the folks behind MagPortal.com who we reported on last week.) Dimm spent the past few months researching the ad blocking debate thoroughly, and even launched a site focused on the topic called "SaveTheFreeWeb.com" as a public service for executives in the Web publishing industry.

Q: How can a publisher figure out how many of their site's ads are being blocked?

A: If you're using a server like DoubleClick, there's almost no way to measure it. You can only measure if you're serving your own ads.

I checked MagPortal's server logs for the names of about a dozen different ad blocking packages to see if they are identified when visitors surf. The only one that even hints that it's there is Web Washer, and Web Washer users can turn that off. So you usually can't tell if your visitors are using ad blockers. One of my proposals on SavetheFreeWeb.com is that we force ad blockers to add a user agent so webmasters know how many are coming through.

Q: While an installed base of 5-10 million sounds like a lot, isn't it just a tiny percent of the half a billion Internet users forecast to be online by 2002?

A: While I don't know the details of interMute's marketing plan, I suspect that most of the growth in their user base will come from cutting distribution deals with modem and PC manufacturers in the United States. So the relevant number to most Americans is the percentage of U.S. users employing ad blockers. That number seems like 5% by the end of 2002 for AdSubtract if we assume 10 million "users".

That 10 million is highly speculative. In a recent SiliconValley.com article interMute's President said his product would be bundled with 20 million PCs and modems by the end of the year. Either interMute has little confidence that a high percentage of those 20 million bundlings will result in actual "users" or their projections are all over the place.

Also, AdSubtract is just one of many programs. While interMute has made a lot of noise about distribution deals lately, it is well behind Web Washer (based in Germany) for total distribution so far. Web Washer claims over 4 million downloads.

Q: Before you had to download ad blocking software, so most people didn't bother to go download it. Now that it's bundled in with your PC or modem, which makes it easier to start using, is the threat bigger?

A: That's what worries me about the ad blocking issue. Before users were too lazy to bother downloading it. Now things could get turned around because people are too lazy to uninstall it.

The important question is whether or not there is a significant risk that rapid change could occur. Makers of ad-blocking software can estimate how many users of the free version of their product will upgrade to a premium version (to block pop-ups, for example) and compute how much they can afford to spend to acquire users of the free versions of their software. They can then pay this money to PC manufacturers to have the software pre-installed.

Some of these companies have access to significant capital (Web Washer is a spin-off from Siemens AG, and Norton Internet Security is from Symantec). How many people would use ad-blocking software if it was already installed on their computer? What if it was already turned on by default?

Q: And all the intrusive ads publishers are being asked to run these days like pop-ups and audio-rich media ads are going to make users want to keep that ad blocking software on?

A: Users' attitudes toward banner ads have been hurt by some of the rather stupid advertising that has occured because people have emphasized clickthroughs ("Punch the Monkey" and "You havean important message") instead of brand building and informing. See SaveTheFreeWeb.com for my "No Obnoxious Ads" proposal.

NOTE: Want to learn more about this topic, or join the debate yourself? SaveTheFreeWeb.com features links to the best articles on this topic, plus message boards and his aforementioned proposals.


Last week's article on Dimm's MagPortal business:

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