
Correlation behind adblock growth surge and AdSense revenue doldrums - seanblanchfield
http://blog.pagefair.com/2014/adsense-smoking-gun/
======
thaumaturgy
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.

~~~
furyg3
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.

~~~
thaumaturgy
> _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.

~~~
coldpie
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.

~~~
userbinator
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.

------
a2tech
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?

~~~
hiphopyo
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...](http://adsense.blogspot.se/2014/05/a-new-look-for-text-ads-on-
google.html)

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?﻿

~~~
jonknee
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.

~~~
hiphopyo
For instance, here's the guy responsible for their latest text ads:
[http://adnanvirk.com/](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.

------
leephillips
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.

~~~
seanblanchfield
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).

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

------
jcampbell1
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.

------
dobbsbob
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/](https://addons.mozilla.org/en-US/firefox/addon/adblock-edge/)

~~~
a2tech
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...](http://gizmodo.com/google-supposedly-paid-off-adblock-plus-to-not-
block-go-682029020)

~~~
sethammons
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. :)

~~~
quesera
The hyphen-with-spaces is a poor substitute for an em dash (&mdash; -- 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.

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

~~~
seanblanchfield
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.

~~~
coldpie
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
:)

~~~
seanblanchfield
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.

~~~
coldpie
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.

~~~
coldpie
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?

See also:
[https://news.ycombinator.com/item?id=8021255](https://news.ycombinator.com/item?id=8021255)

------
davidw
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.

~~~
jdangu
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.

------
JetSpiegel
[http://blog.pagefair.com/wp-
content/uploads/2014/07/chart_1....](http://blog.pagefair.com/wp-
content/uploads/2014/07/chart_1.png)

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

~~~
stato77
It's crazy isn't it. Google aren't exactly going to to take this lying down.
Advertising has evolved for centuries.

------
jonknee
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).

------
jpmattia
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.

------
thewarrior
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.

------
Kiro
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).

~~~
userbinator
_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".

------
porlw
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.

~~~
malka
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.

------
hyperbovine
How do I Adblock this pagefair thing?

~~~
seanblanchfield
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.

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

~~~
seanblanchfield
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.

~~~
CmonDev
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?

------
cm2012
I've always had a hard time getting Google Display Network to operate cost
efficiently.

------
grondilu
Ironically enough, this link was blocked by Privoxy.

------
lalwanivikas
Nothing's opening for me :(

------
netcan
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.

------
smackay
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...](http://www.businessweek.com/debateroom/archives/2008/08/internet_ads_irritating_and_ineffective.html)

~~~
cm2012
You realize that online marketing for direct acquisition is insanely easy to
track, right? Branding is another story, of course.

