We Hope the FTC Takes a Close Look at Ad Blocking
I learned from a reporter’s phone call last Friday that the Newspaper Association of America (NAA) has filed a complaint with the FTC that mentions several companies in the ad blocking arena, specifically, Optimal.com (where I am the CEO), Eyeo GmbH (the creator of Adblock Plus), Flattr who is partnering with Eyeo, and Brave Software, Inc.
It appears to me that while the NAA does want the FTC to look at the practices of the aforementioned companies, they also wished to avoid consumer publicity (which research has shown might inadvertently increase the adoption of ad blocking by increasing consumer awareness) — which they might achieve by posting this late on the Thursday before a long weekend.
I quickly wish to point out a few inaccuracies in this document, and also offer, as I have previously to publishers, trade organizations (I’ve twice spoken at Digital Content Next events and explained in detail what we’re doing to their premium publisher audience, including at least one NAA representative in the last few weeks) and consumers, to speak about / debate / and describe the problems that the online advertising ecosystem faces and offer potential solutions to these problems. As an example, this unfortunate issue should not be happening today. While largely due to third parties who serve this traffic, malware is a huge problem that ad blocking helps millions of users avoid.
This is the first bit in the document I want to address:
First, we’ve clearly specified publicly (including in the aforementioned presentation) that 70% of the amounts we collect will be paid to publishers. We’ve also said that we chose that amount so that the aggregate publisher share reflects the amount of mobile display advertising revenue in the US (per eMarketer publicly-shared data), excluding Facebook’s native ad revenue, that is available to mobile web publishers.
Second, since we only launched very recently, we have built but haven’t yet made available to publishers the mechanism available to claim their funds from us, but we will soon. We have already started outreach to publishers to come and sign up for a mailing list to be informed when that is. We will also give them ample time to come and do so (a minimum of 12 months from when we launch this feature).
Third, while we’ll be using industry best practices for domain confirmation (as pioneered by companies like Google), and we’ll be reaching out directly to publishers to establish direct payment relationships, we’re open to a variety of mechanisms for publishers to help us make sure that fraudsters don’t attempt to collect the funds we’ve set aside for them, just as fraudsters and ad tech companies currently eat up (according to the IAB/PwC, the majority -> not a typo -> 55% of programmatic ad revenue goes to ad tech companies, not publishers) a lot of revenue that advertisers might think is intended for website owners. Happy to consider: just send us your thoughts, you know how to reach us!
We are providing a mechanism for people who are blocking ads to pay for it. It is a subtle distinction, but think of if like National Public Radio (NPR). Anyone can listen to NPR for free (just as most can and do, block ads for free with no payment to publishers), but some portion of users are encouraged by NPR to make a donation of some nonzero amount. There is no set scale, no validation of whether someone has paid, and the end product is no different whether you pay or not, but these donations represent (I believe) 39% of NPR’s operations budget. Also, very important to note that users can always see how much money each publisher is getting from them, and can upvote/downvote a publisher mostly to provide a signal of quality to other subscribers. The publishers creating the best content should do well with consumers’ votes! And although that does to a very small extent influence their revenue share, it’s an order of magnitude smaller than the third-party traffic figures that determine their starting share which publishers also control.
We provide two major mechanisms for the user to voluntarily increase the amount of money they pay a given publisher:
- The user can “tip” any publisher an amount of $0.01 to $1.00 per month, that gets added to their subscription. If you read a great article, you can immediately reward that publisher an amount far in excess of what a few extra banners would bring.
- The user can favorite up to 5 sites, immediately increasing their revenue share in a visible way in the interface.
These are clearly outlined in a slide that we presented at the DCN event, whose audience included an NAA representative, and of course are on the website for subscribers:
I want to help explain TODAY’S ad ecosystem to the FTC
I’ve helped the Federal Trade Commission before, and I welcome the opportunity to do so again, about ad blocking and more broadly the online advertising market and it’s problems. They have not been very visible nor vocal in the debate so far despite my recent attempts to engage them! Previously, I presented at their Consumer Information Security Workshop (when I was an analyst at Jupiter Research), and a few years ago when Facebook had announced plans to acquire Instagram, I provided expert opinion to the FTC upon their request about the effects of the deal on the then-nascent mobile advertising market. But today’s ad environment is getting worse by the day, and plagued by disjointed incentives that put the consumer last (if they consider her at all)!
Readers of my Medium posts will know well where I stand on many of these issues. I’d encourage the FTC to read some of the articles here and the survey research we’ve released along with our partner Wells Fargo Securities that you can find here.
A consumer has a right to block ads and protect themselves from malware — we’re providing a way for users to pay more than they currently are ($0.00) when they block ads. We welcome the dialog!
PS. the reporter who called me happened to mention that he uses an adblocker on his personal computer. He is not (yet) an Optimal.com customer paying publishers to do so.