Ad blockers have many great reasons to use them, including better security, better privacy, less or no advertisements to see, and as I wrote before on this blog, faster load times for web-pages. However there is a big downside to them, they might kill the free internet as we know it. And that is a good thing.
Websites and web services exist because someone is keeping the lights on, paying for the bandwidth, computing power, storage, and creating content. This should not be a surprise to most people as nothing in the world is free. Someone has to pay. Fortunately for us, there are many models websites can follow in receiving income:
- Subscriptions ($$$)
- Donations (Free)
- Sponsorship (Free)
- Government funding (Free)
- Displaying advertisements (Free)
- Selling premium exclusive services (Free/$$)
- Company loss leader (Free)
- Gathering and selling user information (Free)
- Running crypto-currency mining operations on the user’s machine (Free)
Let’s go through this list one by one to see how a website could use that model to keep operating. I will also explain if and how that model can break down in an age of mass adblocking usage. But before I do that I want to come out and say two things: I use adblockers daily and that I believe the usage of adblockers is immoral, which makes me an immoral and selfish person by my own standards. And I am not here to tell anyone to turn off their adblockers as I will not be doing so either, this is merely an educational thought experiment.
Why I believe ad-block usage is immoral
I am not here to argue about the benefits of using ad-blockers, I know those benefits full well and written about the benefits. What I am here to talk about is the economics of widespread adblocker usage and the ethics of adblocker usage by a small percentage of people. The ethics boil down to a simple idea: ad-block users are being subsidized by those that use the website without ad-blockers. If the website receives most or all of its income from ad revenue and provides a service for free, like a video streaming site, then what is happening is users with ad-blockers get a better experience as they get the same free content without advertisements and the users without ad-blockers get a worse experience as they get the same content and must-see advertizements. And most importantly, the group that is getting the worse experience is subsiding the group that is receiving a better experience.
The closest physical example I can think of is fare jumping that is happening in the Bay Area Rapid Transit System (BART), where most users do pay their fare to get on the metro, but some jump the gate and come in for free. Both groups receive the same BART services, however, one of them is subsiding the group that gets more value by not paying at all.
It is easy to see why fare jumping is wrong but the same logic applies to ad-block usage. A simple rule of thumb to determine if an activity is right or wrong is to expand it to everyone. If everyone fare jumped BART would crumble due to no income and everyone suffers, similarly, as I will explain later if everyone blocks advertisements the revenue websites receive will go away and many websites will shut down. Once again, everyone suffers.
The most simple and straightforward way to earn money is to charge your users a one-time fee or a regular fee to use the online service. We can see this with things like Netflix where users pay a fixed monthly rate to get access to Netflix’s complete library of Movies and TV Shows. We can also see this with many journalist publications like The Economist. This model of funding an operation existed long before the internet as the default way to make money off a service. This model is unaffected by ad-blocking. This model is also sustainable.
When I said “kill the free internet as we know it,” that was more of a clickbait attention grabber. In an internet dominated by ad-blocking, there will still be free websites as multiple models support them without needing to have advertisements on your pages. Donations are a great example.
The donations model is as old as the subscription model, or even older. An example I can think of in the physical world is musicians and artists performing in public areas like streets and those passing by would donate if they enjoyed what they are seeing and/or are feeling generous. Online we all know about Wikipedia, the free encyclopedia, which stays afloat due to user donations. This model is unaffected by ad-blocking.
However, I do not think this model is as flexible or scalable as other models. Going back to Wikipedia for example, yes it is run by donations, but they do not produce much content. The content is mostly all written by and edited by the community, the majority of the cost (in theory at least) should be to pay the hosting and bandwidth of the site. Such a model will not work very well for sites and services with high costs and demand for lots of highly paid creative and smart content creators. YouTube, for example, has content coming from the community for free, however, their bandwidth costs are astronomical due to the sheer volume of videos they have. Based on a website called Youtube – Every Second, the amount of new content uploaded is almost 10 hours of video every second. All of that gets processed and converted to dozens of formats and video sizes and stored permanently, so the cost to operate YouTube always grows. I do not believe it can be sustained with donations, it requires another model. The donations model is sustainable on small scales or with little overhead costs.
There two are forms of sponsorship, one where the content is “sponsored” by another company in the form of a soundbite or favorable articles written. One example is a podcast I listen to often called the Joe Rogan Experience. At the beginning of each episode, Joe Rogan goes through this episode’s sponsors by talking about their products and talking about offer codes. I consider this to be more of an advertisement and is easily countered by ad-blockers by skipping to the content right after the sponsored segment or if there is a built-in mechanism to make sure the sponsored content is played the ad-blocker could overwrite the sponsored segment with something else.
For websites that post articles and blogs, they might have the entire article or blog to be sponsored, often written by the sponsoring company, where favorable elements are inserted about the sponsoring company with the style of the hosting site. This is called Native Advertising and it is a clever way to advertise and give the user something of value. There is no way to block Native Advertising as it is the actual content, however, it is not as scalable as I cannot envision YouTube staying free using this model as an income stream. It is sustainable on a small level though and can exist as a stable revenue source for blogs.
The second form of sponsorship is directly funding something just to have your name attached to it without goals of direct benefits. This is done for publicity stunts, like RedBull sponsoring a man jumping from space. By sponsoring some content or entire websites the content could stay free for all to enjoy and it is a way for companies to feel good about themselves and spread their brand recognition. Ad-blocking should not affect this revenue model.
This model, however, has two big downsides, the first is greater corporate control as they could cut sponsorship at any time leaving the website without income, and the second downside is that it is not scalable. It will take many large corporations dedicating massive sums of money to keep afloat a service like YouTube, so this model only works for small websites and onetime events or posts.
If there are Communists and Socialists reading right now they would perk up at the idea of government-controlled or funded internet, no more Capitalist greed online! However I do not have to spend much time talking about why the government should not fund most websites, this is self-evident. It can, however, continue the few programs it has right now like NPR and PBS, that content should be free to use and without advertisements.
The most widespread approach to funding online operations is showing advertisements on your website from services like Google AdSense and Microsoft Advertising. The approach is as simple as picking where on your webpage an advertisement will appear and services like Google AdSense will place an advertisement there depending on what user is viewing your site and if the user clicks the ad you made some money. Zero overhead is required on the side of the website owner as they have to do literally nothing for the ads to show up. This model is obviously going to go away with the widespread adoption of ad-block usage.
A better post free internet
A future internet where mass ad-block usage permanently kills the idea of internet advertising will be a better and safer internet. The vast majority of free websites will stop existing, but that isn’t something bad. The vast majority of “free” websites are low-quality clickbait sites and articles with clickbait ads all over the webpage. In a post-advertising world, only quality content will exist.
To keep a website up without advertising you need to convince users to give you money either through donations or subscriptions, or some hybrid model of free and paid content. The only way users will give websites money is if they had quality content; articles like “most bought items at Walmart” where each item is an item and you must go to the next page will die fast, nobody will pay for that.
Another great benefit to a post advertising internet is more privacy. Companies like Google and Facebook exist for one purpose and one purpose only: to get as much information about you as possible, index it, and show you the advertisement that you are most likely to click. Google won’t go away because people will be willing to pay for its services like Google Search, YouTube, and Gmail. But Facebook will go away, nobody will pay to have access to Facebook.