Correlation behind adblock growth surge and AdSense revenue doldrums | Hacker News Reader

Correlation behind adblock growth surge and AdSense revenue doldrums

blog.pagefair.com

I predicted a showdown between users and advertisers back around 2010, and every year since, I've been surprised it hasn't happened yet.

Malicious advertising is probably the biggest driver of AdBlock Plus growth. Anecdotally, we just had another customer get hit by a remote computer service scam because she searched for something like "canon ink technical support", and an ad was listed at the top with an 800 number that she called without realizing that it wasn't Canon at all.

Google does its best to differentiate its ads from its search results as little as possible. A lot of less savvy computer users never even notice the little "Ad" tag; I had to point it out to her. In Yahoo's case, it's even worse -- the difference between the pile of ads at the top of their page and their search results is so subtle it even took me a moment to figure it out.

And then there's saturation. Advertising is everywhere now. Magazines spend as much print area on advertising as content; television is down to, what, 10 minutes of ads for every 20 minutes of content, or worse; radio, if you're silly enough to still listen to that, is hilariously bad; news sites and publications are experimenting with "sponsored content" -- ads that more and more closely resemble regular articles -- billboards, bulk mailing, text messages, robocalls, and email spam all add to the load.

On the whole, the ad industry ends up feeling skeezy, pushy, and overwhelming.

So AdBlock Plus gives users a way to remove all of that from one part of their daily life. I don't think we've ever had a negative response from a user when showing them AdBlock Plus for the first time; the usual response when reloading yahoo.com or msn.com with AB+ is, "oh, wow, that's really nice."

I keep expecting to hear that the bottom's fallen out of online advertising.

You act like this is new (magazines, for example, have long been more ads than content). We only which TV on demand, so we see very few ads (Hulu Plus, only) but the prevalence of ham fisted product placement is staggering (I remember when Burn Notice suddenly went from 70s muscle car to Hyundai).

But advertising itself has always been at least partially evil, which makes Google's slogan combined with its utter reliance on advertising revenue a problem.

This this this. There are some huge players in the online advertising world who are supposed pillars of innovation and sustainability, but they have really failed at keeping sketchy, scammy, or downright malicious advertisers away. Inaction here will kill their industry.

Google ads look like results and link to sites with malicious software downloads. iOS apps are full of "you have one unread message!" misinformation banners. These are the 'reputable' players, of course grandma also plays bridge online while little Johnny searches for boobs on the family laptop. What do their ads link to?

In this world the solution is just block freaking everything.

> iOS apps are full of "you have one unread message!"

Android isn't any better.

I have used adblock for years now, practically since I started using the internet. About 2 sites are whitelisted: hackaday and reddit. They show reasonable ads. I absolutely hate flamboyant flashing ads. Especially those that go full-screen on mouse-over.

If all ads where like the ads on reddit and HaD I wouldn't complain, I proably wouldn't even have an adblocker. But that malicious bulk? No thank you.

> Inaction here will kill their industry.

That's the part I'm less certain about. I would've expected it to happen already; they're hurting themselves, but so far not fatally.

We need to get web browsers to ship with Adblock from the start. You'd be insane to set up an email server without some form of spam filtering, why not do the same with browsers?

Yes, it would collapse the current web business model. I fully support this.

As much as I loathe ads myself, I don't think it's a good idea to default to blocking ads, not the least because the definition of an ad is a little hard to capture completely without either false negatives or positives. Different people also have different ideas on what they consider acceptable ads, so it could be a form of unwanted censorship to some.

Default to showing all the content, but let people make their own choice on what to filter out.

I always wondered how much advertising, in any shape or form, works. I know for a fact that advertising didn't convince me to buy anything this far.

While advertising may not have convinced you to buy anything, which is doubtful that it hasn't has some influence, there are millions of people that are influenced by advertising. This is why it's done.

What is sad is that obvious marketing attempts work so well. One weird trick ads really do work. I was as surprised as anyone when we started running these for a client assuming that they would fail and we could stop. Sales nearly doubled for that ad group.

It's hard to blame the marketers for the dumbed down advertising when it works so well.

Google needs to start cleaning up their ad inventory NOW or they're going to lose the whole business to adblocking. If you'd like to see how toxic Google ads are simply do a google search for 'skype' on a fresh Windows machine without Adblock enabled.

Now look at the ads-what are they for? Virus laden websites/fake installers. This is for a major keyword-why is Google allowing their ad pool to be poisoned by such bad/misleading ads?

In the past people's computers would get trashed from popups and malicious web pages, but today most of the junk filled computers I see have the same story 'I was looking for xxx on Google and I clicked the first link and then a bunch of stuff started popping up...'

When Google, the biggest 'best' ad provider in the industry, is polluting computers like this, why shouldn't people run Adblock?

Not to mention search toolbar (bundled with downloaded software) vendors who buy ads on Google in order to ... show ads from Google:

http://www.benedelman.org/news/012213-1.html

They also need to stop toying around with amateur designs at the expense of the whole AdSense programme:

http://adsense.blogspot.se/2014/05/a-new-look-for-text-ads-o...

I've seen the past works of the designers on the AdSense team and I'm not impressed. Plus it's quite naive to think that one design will fit all websites. Why can't AdSense, like other ad and affiliate networks, just open up an API so publishers themselves can be in charge of how their ads look and behave?

Why do you say amateur designs? Google knows what converts, I would wager that their designs are the antithesis of amateur. You may not find them pretty, but those are different things. AdSense does let you specify all sorts of things about the look of the text ads though (font, colors, etc). They also have a tool for you to automate A/B testing of different combinations.

For instance, here's the guy responsible for their latest text ads: http://adnanvirk.com/ -- now I'm not saying he's bad. He's good. But is he good enough for Google?

> AdSense does let you specify all sorts of things about the look of the text ads though (font, colors, etc).

I'm afraid that's not enough. We need to control margins, paddings, line spacings, as well as media queries. We need to be able to remove the arrows, lines, buttons etc. that don't belong there. Ie. "perfection is achieved, not when there's nothing left to add, but when there's nothing left to take away".

Google has great designers, I'm sure we can all agree on that. Unfortunately, none of them are part of the AdSense team.

For text ads done right, see the ones in Gmail.

In your graph captioned "Observed Desktop Adblocking Rate vs Predicted Rate", where does the curve for predicted rate come from? It's not explained in the text.

You do not show how much of the decline in ad revenue is caused by adoption of adblock, or even whether the amount of decline attributable to adblock is significant or measurable. You merely point out that revenue has declined and that adblock adoption has increased.

EDIT to add: You show no data on adblock adoption that covers the same time span as your graph of revenue. Your proxy for adbock use covering this timeframe, Google searches, shows a distinctly dissimilar pattern from the revenue graph for the same period. You claim a "correlation" but don't calculate one. You fail to demonstrate anything about causation.

It looks like a typical case of idiotic extrapolation to me. http://xkcd.com/605/

Fair points. We need to provide the source data and a full explanation. We're going to publish a detailed report in August with everything in it.

To answer one of your questions, the predicted desktop rate is based on an assumption that adblock adoption is driven by word of mouth (we have a basis for this assumption), and a compound growth rate is fitted to raw adblock rate data.

It's hard to combine the google trends data into the same model, because it's just a picture of search volume, not total adblock installations. I think it would be a fair to assume that the growth rate of new installations would match the growth rate of search volume, which means that the growth rate of 65% we're seeing this year is higher than it would have been in previous years.

Finally, I want to acknowledge that nothing can grow exponentially forever! At some point everyone who will use adblock will already have it installed. I'm pretty sure some countries are pretty close to adblock saturation already (Germany, Poland, Sweden and Finland).

Sounds reasonable, I look forward to seeing the full details in August to get the full picture, but those assumptions seem fair.

Facebook is part of the story. Facebook has put $10 Billion/year of ad inventory on the market, primarily in the last few years. Facebook ads compete in the same space as Adsense.

Doesn't Adblock Plus permit google ads by default hence the need for Adblock Edge https://addons.mozilla.org/en-US/firefox/addon/adblock-edge/

Yes-which is a shame. I think that Google has violated the acceptable ad policy and should be removed. Here's an article from when the change was made to Adblock Plus http://gizmodo.com/google-supposedly-paid-off-adblock-plus-t...

Sorry to be that guy, but your use of the hyphon ”-” makes it hard to read your post. A hyphon with no spaces around it joins the two or more words into a single concept. A man-child is a single entity. In your usage here and above, all you need is a space on either side. A "yes-which" first parsed as a typo of "yes-witch", which I supposed would be a witch who agrees a lot. On the other hand, "Yes - which..." Now it is easily parsable as a transition. :)

The hyphen-with-spaces is a poor substitute for an em dash (— -- if HN supported HTML entities).

Where emdashes are non-operational, I prefer a pair of hyphens surrounded by spaces -- which at least looks more like an em dash.

Your comment is meta, but not inappropriate or abrasive. Civil commentary regarding common misusage has value, and I hope your comment will emerge from the grey.

Adblock and do-not-track request should be promoted as much as possible.

We think (@pagefair) it's clear that adblock is being promoted just fine by word of mouth. It's the ad industry that's got to change somehow. We're trying to be part of that. What's shocking to us is how the ad industry mostly doesn't even recognise how fast adblock is growing. To them, it just looks like more people have switched off their PCs, because they just can't see that segment of the audience anymore. Therefore, they're having a really hard time figuring out that this is even happening to them.

> To them, it just looks like more people have switched off their PCs

That's a really interesting comment. I don't think people are moving away from laptops (desktops maybe) anywhere near as quickly as I so often hear.

Anecdotally, almost everyone I know uses predominantly laptops for their computing/browsing needs. They almost all also use Adblock.

I think you are on to something. If you are "savy" internet user, you probably hang a bit longer on the desktop than the average population because you are also a power user. If you are a "casual" internet user, mainly checking some social site status, etc, using a mobile is enough. Or to say otherwise, prosumer vs consumer. And it is more likely that you will use an adblocker if you belong to the first part of the population.

I'm one of a handful of people I know who still use a desktop on a (mostly) daily basis outside of work. They're all either devs or heavy PC gamers.

Having said that, I don't know a single person who doesn't at least use a laptop every other day or so. Most of my friends have smartphones, but I don't know anyone who relies on that as their only access point for online services.

Are you including Adblock Edge? How is that doing?

Adblock Edge is included, as is every plugin or proxy that acts to remove advertising from web pages. Unfortunately, we can't specifically distinguish adblock edge from the others right now.

OK, thanks for the info!

Pagefair is basically "Clean ads as a service." If they detect your using Adblock plus, they'll server you an ad, adblock plus won't block, because they pay adblock plus. (And because they claim to follow adblock plus's policy of 'good ads').

Which is annoying, because if you aren't using adblock plus, you don't get decent ads (just the standard ads), so ultimately it defeats the goal of adblock which is to make all ads non-obtrusive, for all users, not just the chosen few who use adblock.

Adblock edge will block pagefair ads, because adblock edge is a not-for-profit adblocker, unlike adblock plus.

Also hosts blocking remains a completely viable option.

> adblock plus won't block

I was wondering if this is true. It is! Take a look:

Here's ABP's policy on "acceptable ads":

https://adblockplus.org/en/acceptable-ads

From there, you can find the "acceptable ads" whitelist:

https://easylist-downloads.adblockplus.org/exceptionrules.tx...

And indeed, PageFair has a few domains listed. Fascinatingly, there's also a link to a forum thread where the whitelist was requested:

https://adblockplus.org/forum/viewtopic.php?f=12&t=20718

That thread links to a page that uses PageFair. After enabling a bunch of JavaScript domains (what, you're still not running NoScript?), an ad does indeed show up:

http://forums.utopia-game.com/forumdisplay.php?1583-Suggesti...

Rather hilariously, the ad is for a "Free Mp4 Player" and links to Ask.com or something. If this is PageFair's idea of the future of quality advertising, I don't think their company is long for this world.

There was an ealier story in new about pagefair cleaning 600k in funding. I idled slightly and read their FAQ's while waiting for a tests bench to get set up.

It's interesting, I imagine they'll be sucessful, and it will ultimately drive up hosts blocking again (I do this, hate no script, I like my website's shiny chrome).

I'm interested to see how the web business model changes in the next decade. I think it's likely that web advertising is a dead end. There's been a number of articles about how Facebook advertising is a waste of money, ad impressions are down in general, and like this article describes, Adblock is really taking off. I think, and desperately hope, that we're going to see more voluntary subscription type services like Patreon, where the content itself is released for free.

I personally loathe advertising. When watching YouTube videos on my phone, where I can't use Adblock, I actively mute and set the phone aside during ads that can't be skipped, or that I choose to let play to support the content creator. Then I come back 30 seconds later to view the content I wanted.

I recently switched to using Firefox on mobile because it's the only mobile browser I'm aware of with an Adblock plugin. I put up with mobile advertising for several years--I understand that's how web content creators get paid in 2014, even if I think it's a crummy business model. But advertisers crossed the line when my phone started talking about construction contractors at me out loud. Instantly switched to Firefox, installed Adblock, and didn't look back. Advertisers have no one to blame but themselves for the rise of Adblock.

Sorry, advertisers, but your ilk are simply too scummy to put up with. You abuse otherwise valuable technology, you waste my time and bandwidth, you manipulate feelings and entire cultures, and you convince people to buy crap that is useless and often actively harmful. I'm done with advertisers and I hope Adblock hastens their demise. Content creators will figure out a different business model without your horseshit.

This post became progressively more angry the more I thought about advertisers :)

> I personally loathe advertising.

I've always had issues with the constant brain-washing with trivial rubbish, stupid humour and idiotic themes so often used in TV commericals. I tend to download movies/television now, or buy them on DVD, and so I hardly ever watch television per se. When I do, I find it jarring to be taken out of a story to be told about lavatory cleaner or some novelty foodstuff. I have the same feeling when browsing without AdBlock. How am I supposed to read the article with so much stuff dancing around my peripheral vision? Oh, I'm not, it's the ads which are the important thing.

In terms of practical effects, I find I am far less materialistic than many people I know, and less likely to buy things for the sake of it. I think this is because constantly being told you want a new car or consumer electronics will inevitably cause you to believe it. I don't mean this to be rude, btw - it's just how advertising works. Constant repetition combined with all the tricks of the trade like social proof, limited offers, etc.

I used to block ads before we noticed that 30% of our website revenue was lost to adblocking. We realised that people weren't intentionally blocking ads on our site, but probably due to some bad advertising that pushed them over the edge somewhere else on the internet. There was nothing we could do, so started a new business (PageFair).

In your post, you are correctly angry at advertisers. But adblocking doesn't punish advertisers, it punishes websites, starting with your favorite ones. Right now, the advertisers just go somewhere else for their traffic. Even if it did somehow punish advertisers, would it discriminate between the relevant & polite ones (e.g., job ads on stackoverflow) and the spammy ones (magic weight loss pills on dictionary.com)?

Agree that the publishers and web users need something better. That's our goal at PageFair.

> I used to block ads before we noticed that 30% of our website revenue was lost to adblocking.

I'm curious how you came at that number.

I'm inclined to believe that at least some of the population that does click on and interact with advertising is part of a very different group than that would install AdBlock.

I find myself in the latter - I run AdBlock, but even if I didn't, I wouldn't be clicking on ads anyways. Am I part of that 30% lost revenue?

I think I have never-ever bought something via a banner. I will always read several comparison reviews first. SO ads don't get blocked in my browser for some reason, but the quality of their job ads is very low (e.g. no salary info in 99% cases) and it only works well for open-source-high-rep type of developers anyway. So basically just a timewaster for both me and an ad-provider. Hence block all-around :).

Good luck to you, but it never works. As you say, there's no way to discriminate between relevant & polite ads and spammy ads except for human intervention. I'm not involved in the business (clearly), but I think the overheads are sufficiently small in the advertising business that that's just not viable.

That's why I don't think advertising is a viable business model for web content in the long term. Spammers are going to spam, users are going to install adblocking software to get rid of the spam, and whatever's left will either get caught up in adblock or be too cost ineffective for businesses to bother with.

Replying to myself to ask Sean a direct question. Your ads appear to be really crap quality. "Free Mp4 Player" with a link to Ask.com is really your idea of better advertising?

"But advertisers crossed the line when my phone started talking about construction contractors at me out loud. Instantly switched to Firefox, installed Adblock...."

Bingo. Every time I switch to, or add a browser to the ones I regularly use (this also included a desktop Windows to Linux switch), I forgo Adblock. But I inevitably install it after hitting a seriously abusive ad.

In theory I'm willing to give advertisers a chance, in practice the bad actors have poisoned the well so thoroughly I, and evidently many many others, including ones I influence, or setup and maintain their computers (my parents, who have a fair amount of disposable income), block almost all advertising.

And, yeah, I can't see how this won't end up changing a number of business models.

I installed adblock when i finally got fed up of 30 second-1 minute unskippable ads on 1-3 minute youtube videos.

Of course, the killing of malvertising/download-software-with-adware etc ads is another good thing.

In my opinion, if there was an easy link to report an ad directly on the search results, I'd pause adblock to search for various terms and report the fake support/adware laden download links/etc ads.

But as it is, I think tipping is the future. But maybe that's just my connections to the Dogecoin community coming through.

How solid are those numbers? 25% sounds like a lot to me for your 'average user' kind of people, who make up the vast bulk of people on the internet. The curve also looks a bit optimistic.

My guess is that they have a script that observes ad placements and counts "non-impressions". Counting impressions at the site level is not the same as counting them at the ad server level. There are generally multiple ad servers daisy-chained into the ad tag, creating a lot of latency. It is very typical to lose 10% or more ad inventory simply because the ad can't load in time. If pagefair can't account for that, then the number is highly inflated.

Not solid at all, at least according to the traffic I get. In verticals like HN it is quite likely to be high, but in the real world it's not. If anything I would wager that AdBlock usage is declining because of the dramatic increase of mobile traffic.

http://blog.pagefair.com/wp-content/uploads/2014/07/chart_1....

I like that this chart "predicts" that more than 100% of users will have block ads in about 2017.

It's crazy isn't it. Google aren't exactly going to to take this lying down. Advertising has evolved for centuries.

I've been an AdSense publisher for over a decade. Since AdSense primarily pays you by the click (there are some CPM based ads, but it's a fairly small number), users who have AdBlock don't usually end up costing you much because they're very unlikely to have clicked on the ads in the first place. Mobile is a big deal though. A huge deal. You can bring up the reports quite easily, the eCPMs for mobile is way less than for desktop while mobile traffic is ballooning month over month.

Interestingly, all this new mobile traffic means less users have AdBlock (but the traffic is still worth less so it averages out against the publisher's favor).

The article seems to imply that by cleaning up scammy/spammy advertising, that users will dispense with Adblock.

I disagree: I think it is more a case of uneducated users not knowing that Adblock was out there. Now that the cat is out of the bag, no amount of cleanup is going to make them decide that they want to view an ad-infested web, no matter what the quality of the ads. They will simply leave adblockers on. Moreover, network effects are present, so the knowledge of adblock will continue to propagate.

This is another reason why most of the services will shift to apps. Its much harder to stop apps from tracking you or shoving ads in your face.

Every day I hear about sites being broken for people with AdBlock. Yesterday a friend couldn't complete his buy at a online ticket agency due to AdBlock. The problem is that you never know if the site is broken or if it's due to AdBlock and most of the times you don't even realize it (especially true for people who are not power users).

especially true for people who are not power users

This is particularly sad because those people are also the ones who are the most easily misled into getting bitten by ad-originated malware and thus the ones who will derive the most benefit from AdBlock. Power users who know and use AdBlock would be also far less likely to fall for such deception.

There's one decision that is clear when using the Internet: either you can learn enough to be able to take control of your browsing experience, or you can remain complacent and be controlled by the entities who will manipulate you to their satisfaction. I've chosen the former and wish more people would too.

Personally I find that just having JS off by default cuts out a huge amount of the crap on most pages (including ads) and don't need more than that + a HOSTS file to kill off the rest, but this is unfortunately a setup that is probably unusable for the (current) "average user".

I'm not so fussed about ads I can ignore, but (along with analytics and stuff like social media buttons) - they all add latency to web browsing with extra DNS lookups and HTTP requests.

It's especially bad on mobile.

So no matter how nice, useful or relevant the advertising is, unless it's hosted on the site I'm visiting, it will probably be blocked.

on mobile, my service provider (free.fr) offers ad block on ISP level. Very nice feature, my only concern is that it is an opt-out choice.

How do I Adblock this pagefair thing?

It's easy. If you ever see one of our ads, you can permanently opt out using the close button. We're working hard not to show the kinds of ads that most adblock users would want to block. We currently have < 1% opt outs.

Are your ads image-only, or can they be Flash, iframes, or include scripts?

Only text and/or static images with strict limited on how they are displayed so that they are not annoying or intrusive. No scripts, so no viruses, and no third party trackers or creepy stuff like that either.

Will those ads know that I bought/browsed for something several month ago and still try to sell me similar products that I no longer need?

> We currently have < 1% opt outs.

I have a feeling this may be because even "Close Buttons" on ads have a reputation for being untrustworthy.

I've drilled it into the heads of all of my not-so-computer-savvy relatives to NEVER click anything on any ads, even if it looks like a close button. They often aren't. (Telling mom and pop that clicking on 'em will give you viruses is very effective.)

The point is, I don't ever want to see one of your ads. Not even one. Whatever detection method you're using, I also want to block. Sorry if I sound like a prig, but I object in principle to advertising and the consumerism it seeks to instill.

I've always had a hard time getting Google Display Network to operate cost efficiently.

Ironically enough, this link was blocked by Privoxy.

Nothing's opening for me :(

This is based on adsense partner network earnings, which is a small section of the total online advertising market. I don't think you can reach conclusions about online advertising in general (which is all affected by adblocking) from this.

Adblock may be playing a role, but I don't think that's what this data shows.

Several reasons:

_ 1 the centralization of the web. Adsense was built for the long tail web. Today's web is much more centralized with more impressions going to fewer, bigger sites. Google themselves play a few roles here. They run some of the big sites sucking up the traffic. Their search results are increasingly directing people to the big sites.

Fewer blogs more circles and tweets.

The data cited is from Google's quarterly results. Taken as a whole the data seems to support this theory.

  Q1-2014 'Sites Revenues' : $10.47 billion, a 21% increase over Q1-2013
  Q1-2014 'Partner Revenues' : $3.40  billion, a 4% increase over Q1-2013

  Q1-2013 'Sites Revenues' : $8.64 billion, a 18% increase over Q1-2012
  Q1-2013 'Partner Revenues' : $3.26 billion billion, a 12% increase over Q1-2012
 4% increase in Network Revenues.

Overall, the growth in ad revenue actually accelerated from 19% to 22%. The growth just shifted from the partner network to Google's own network. Both are similarly affected by adblocking. There isn't an overall slowdown.

- 2. The market adsense ads are a part of is competitive, much more so than search.

For search ads, Google's reach, platform quality and ad quality is best by far. There is no competition. For content network ads, Google's inventory (the sites displaying adsense ads) and the platform is nothing special.

Competition is growing. Social media (including Google's own sites) advertising is the biggest new source of competition. In-app ads are anther. Those 'you might also like' content recommendation ads you might find on news sites on are another source are another growing segment 9and an important way of picking up that one weird trick for flatter bellies).

Facebook is the real elephant in this room. Facebook ads work. The platform is improving and marketers are learning how to use it. They have an enormous inventory. They have user data enabling really powerful (or scary, depending on your perspective) targeting. Since so many Facebook users check in multiple times per day, campaigns can target (and report on) daily impressions and such.

Facebook ads work in ways other ads don't. A lot of ad dollars are flowing into Facebook, some would have gone to adsense.

_ 3 "content network" ads on adsense are in the more direct competition for ad dollars with the offline world than most online ads. This is a volatile market segment. Blue chip advertisers can cut 7-8 figure budgets to zero in a bad year (like 2011). On a smaller scale, it's still a volatile market

I'm not saying that adblocking doesn't matter. I'm sure it does. But these are two noisy datasets you are looking at. You need to correlate different things to make this point. Maybe earning per 1m pageviews for some site.

Yes, it's much better to blame the users and those pesky hackers than admit that online advertising is largely a waste of money.

http://www.businessweek.com/debateroom/archives/2008/08/inte...

You realize that online marketing for direct acquisition is insanely easy to track, right? Branding is another story, of course.

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