Does Ad Blocking Hurt Good Websites?

An interesting post over at ARS Technica about how ad blocking hurts websites. The post is interesting for two reasons. First, the article, written by ARS Technica’s founder and owner, goes into more detail than is often the case regarding how ad supported websites work and how blocking those ads can hurt the website in question by depriving it of the revenue it requires to keep running. Second, the article mentions a “failed experiment” in which they blocked users who were blocking ads from viewing the site’s content.

The article, which I highly recommend you read, mentions an oft misunderstood concept about online advertising, namely, that all website advertisements pay per click. While, it is true that numerous popular advertising programs, such as Google AdSense, pay content publishers, or website owners, on a per click basis for some ads, that is not always the case. Even within the AdSense program, there are advertisements that pay based on “impressions”, or how often they are seen. However, for low-traffic websites, these amounts never show up as anything more than a penny here or there. For these website owners making money with AdSense means pay per click.

Because there are many more low-traffic web properties than there are high-traffic properties, and because those same numerous low-traffic websites write more about ad programs than higher traffic websites, they’re experiences and opinions are more widely disseminated. The result is that most people believe that only clicking on ads generates any revenues, and since they aren’t going to click on ads anyway, blocking them causes no damage to websites.

High Traffic Websites Earn Revenue Just By Showing Ads No Clicks Required

However, on a high-traffic website, such as ARS Technica, advertisers often pay based not only based on clicks, but often based on the number of impressions the ad generates as well. The most common standard advertising rate in this arena is based on one-thousand impressions, which is often notated as CPM (Cost Per Thousand). This is occasionally misunderstood as cost per million based on the erroneous assumption that M stands for a number that starts with M, when, in fact, it is the Roman numeral M which is 1,000. (You see the M all the time in movie credits that use Roman numerals for their dates.)

For example, a high-traffic website might get $1.00 for every 1,000 impressions. In other words, for every 1,000 times an advertisement is displayed, the website would get $1.00. (These numbers are all for example purposes only and do not necessarily correlate to real advertising numbers, rates, costs, or payments.) If the website in question gets 200,000 page views per day, that would add up to $200 per day of revenue. Over the course of a month, that is $6,000 which adds up to a nice $72,000 per year.

Even at that rate, you aren’t talking about a full-fledged publishing business with employees and benefits and the like. To get to those kind of numbers, you either need higher rates, or more traffic. Either way, you can see why the number of people with actual real world experience in this area is low. A site like ARS Technica get upwards of 10,000,000 page views per day, according to Alexa.

Re-do the math and you can see the kinds of numbers we are talking about here.

So, when a site like this notices that 40% of its users are blocking ads from being displayed, it isn’t just nickels and dimes we are talking about.

Ad Supported Websites Block Users Who Block Ads

Also in the article, the author talks about what he calls a failed experiment whereby the company kept users who used ad blocking software, most likely the Ad Block Plus plug-in for Firefox and others, from seeing the content on the website. Unfortunately, one of the major problems with the experiment was a lack of communication with the readers to let them know what was going on.

The other problem is that a certain subset of user populations is fanatical in both their efforts to block ads and their “right” to do so. Needless to say, there was some backlash.

But, did some good come out of all this?

I set my Firefox Ad Block Plus plugin to Disabled for the arstechnica.com domain. We’ll see how it goes. I’m perfectly willing to let websites display ads to generate the revenues required to continue their efforts. I am not, however, willing to let those ads slow down my browsing experience, and I am also not willing to let them be overly intrusive. I installed ad block plus when Kontera and its ilk came out and started manipulating text to have links that popped up ads if you so much as got your mouse close to them. That is unacceptable.

Furthermore, I am NOT going to unblock Flash on ARS Technica or any other website. Flash is a horribly bloated coding system that just gets worse by the day. Open a webpage with a few flash based ads on it, and watch your browser’s memory usage double. Since I like to leave tabs open while I do other things, those resource pig flash ads take up more and more system resources and that is not acceptable.

More interestingly, for the time being anyway, I have in the back of my mind the thought that some of my favorite websites (I read ARS Technica a lot whether directly or via RSS Feed) need to have those ads display to keep running. Otherwise, they’ll either disappear, become lower quality, or stoop to writing pay for review or pay for coverage articles.