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10/3/2014
09:26 AM
Thomas Claburn
Thomas Claburn
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Ad Haters: The Backlash Against Google And Facebook

Social network Ello is capitalizing on discontent with online advertising.

Social network Ello says it's receiving 40,000 requests per hour to sign up. What could attract such interest? Ello advertises itself as a website without advertisements.

Ello's rise can be attributed to various factors -- Facebook fatigue, luck, appealing design, or effective evangelism. But its core value proposition, the absence of ads, clearly resonates with those expressing interest in the social network.

The fact that Facebook just introduced its Atlas ad network to advertise to Facebook users on third-party websites may just be a coincidence. But Ello isn't the only company gaining traction by treading on advertising. AdBlock Plus has declared that its ad blocking software will block ads served by Atlas.

It turns out a lot of people don't like online ads. A study conducted in January by Harris Interactive on behalf of game framework maker Goo Technologies found that 82% of Americans ignore online ads.

According to PageFair, a company that helps publishers avoid ad blocking, there were approximately 144 million active adblock users worldwide -- almost 5% of all Internet users -- in Q2 2014. The company says that number represents a 69% increase from a year earlier and that ad blocking has shifted from the technically savvy to mainstream users. In the U.S., 27.6% of U.S. internet users surveyed acknowledged using ad blocking software.

A survey conducted in June by ad buying software maker Strata suggests that 64% of respondents between the ages of 18-44 found targeted online video ads intrusive and that 28% of respondents would not watch an online video ad for any reason.

To an extent, it's always been thus. Some people reject ads, some accept them, some enjoy them, and the ad industry gets by. But dominance of ad-dependent Google and Facebook has created an incentive for competitors like Apple and Microsoft and would-be challengers like Ello to promote privacy, at the expense of advertising.

In an open letter published last month, Apple CEO Tim Cook wrote, "A few years ago, users of Internet services began to realize that when an online service is free, you’re not the customer. You’re the product. But at Apple, we believe a great customer experience shouldn’t come at the expense of your privacy."

You can find that same sentiment on Ello's website: "We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce and manipulate -- but a place to connect, create, and celebrate life. You are not a product."

Privacy has never sold very well, but that may be changing. Last year, the revelations from ex-NSA contractor Edward Snowden about the scope of NSA spying put privacy in play again. Over the summer, a Senate subcommittee held a hearing on the security threat posed by online advertising. The report characterizes malvertising as "real and growing problem," noting that "malvertising has increased over 200% in 2013 to over 209,000 incidents generating over 12.4 billion malicious ad impressions."

The report calls for further industry self-regulation -- no surprise there -- but the growing passion for ad blocking suggests consumers don't believe the industry can police itself. Neither do businesses: "Facing the onslaught of threats, a disturbing trend has emerged with enterprises opting to block all third-party advertising viewed by their employees," said Craig D. Spiezle, executive director and founder of the Online Trust Alliance, in testimony to the subcommittee.

In August, Ethan Zuckerman, director of MIT's Center for Civic Media and the inventor of the now-reviled popup ad, penned an essay apologizing for the popup ad and calling for a business model for the Internet other than surveillance.

"I have come to believe that advertising is the original sin of the Web," Zuckerman wrote. "The fallen state of our Internet is a direct, if unintentional, consequence of choosing advertising as the default model to support online content and services."

Zuckerman identifies four problems with online advertising:

1. Online ads require surveillance
Surveillance, knowing something about the person viewing the ad, makes it valuable. Hence, the hunger for personal data.

2. Traffic whoring
The tyranny of pageview metrics pushes publishers to create shareable clickbait rather than substantive reporting. You won't believe which formerly reputable news organizations have published headlines that begin "You won't believe..."

3. Online advertising encourages centralization of power
This centralization of power affects online speech because corporate decisions to ban content are as far-reaching as government decisions. (Witness the concern over Europe's "right to be forgotten" and the consequences of Google being the primary tool by which controversial content is found.)

4. Divisive personalization
The personalization offered in conjunction with online ads is detrimental to social cohesion. It divides us into camps that cannot agree upon anything, Zuckerman argues.

There are several additional problems with online ads:

  • Delays: Online ads slow page loads and consume bandwidth.
  • Security: Online ads can lead to malware infections or information theft.
  • Attention starving: Because ads sustain crummy content, quality content faces more competition for attention.
  • Ads are either manipulative or worthless: If ads work, they've manipulated the viewer; if they don't work, the advertiser may still be charged.
  • Time tax: Ads consume time, time you'll never get back.
  • Ads are a cynical product: Ads are the equivalent of quack cures. Ad buyers have no guarantee their ads will accomplish anything.
  • Advertising relies on implied rather than explicit consent: Publishers bemoan the use of ad blocking but fear to actually demand customers consent to view ads or to enforce a paywall.
  • Consumers want something for nothing: Internet users want content and they don't want to pay for it.

At the same time, ads are essential. Companies launching new products need to make people aware that their products exist.

Ads can also double as compelling content, despite ulterior motives. Well-made ads can be entertaining, enlightening, even beloved.

It's hard to imagine that on the Web, where the business model remains mired in deceit -- Benjamin Edelman, an associate professor at Harvard and spyware researcher, has documented the shadier side of the business over the years.

To combat growing disinterest in ads, Facebook is pushing "native advertising," which is another way of saying ads disguised as editorial content. Google is concerned enough about sustaining ad revenue to have removed AdBlock Plus from Google Play for interfering with other apps -- despite the fact that customer opted for that interference. Online ads don't seem to be beloved.

Meanwhile, the same consumer desire for control that bred ad blocking software has led to AdDetector, a browser plug-in designed to reveal advertorials masquerading as balanced reporting.

Companies shouldn't be at war with their customers; it's a war without winners. But that's where we are. The ad industry needs to get serious about curbing bad practices, honoring privacy choices, and eliminating malware. Publishing companies need to start respecting Internet users and offering them frictionless ways to pay for content without ads. Platform companies need to rethink the consequences of free as the default price of digital goods. Maybe then, Internet users will show some respect back.

Enterprise social network success starts and ends with integration. Here's how to finally make collaboration click. Get the new Enterprise Social Network Success issue of InformationWeek Tech Digest today. (Free registration required.)

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio
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Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
10/3/2014 | 3:49:21 PM
Sinful
This puts things in perspective, and makes you realize the long tail of damage done by having advertising as the default model for the Web. I never thought of it as the "original sin" but that's an apt description.
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