Ad-Blocking Software Gains Traction

MarketingClick/Reuters–Frustrated by larger and more intrusive online advertisements, Internet users are increasingly turning to a dramatic solution: software that can scrub ads from Web sites completely.

Programs with names like AdKiller, AdSubtract and WebWasher have been available for several years, but have been gaining traction lately among individual users concerned about privacy, slow download speeds and cluttered Web pages, as well as businesses looking to increase efficiency.

WebWasher, developed by Siemens AG, claims 4 million users, including 1,000 corporate clients. Intermute Inc. President Ed English says his AdSubtract product will be bundled with 20 million computers, modems and other products by the end of the year.

One product, Guidescope, even aims to replace the current banner-based advertising system with a voluntary e-mail marketing program.

Industry spokesmen say they aren’t losing sleep just yet.

“Right now I don’t think it’s a threat,” said Stu Ginsburg, spokesman for the Internet Advertising Bureau.

To counteract slowing revenue growth and declining click-through rates, ad shops are modifying the traditional banner ad into larger, more attention-grabbing formats recently approved by the Internet Advertising Bureau.

As popular Web sites like Salon.com and Yahoo Inc. devote more on-screen real estate to advertisements, ad blockers say they have been reaping the rewards.

“People see those ads and say, ‘You gotta be kidding me,'” said English, of Intermute. “We’ve been getting a lot of fan mail about that.”

The advantages of an ad-free Web are obvious: faster downloads, cleaner computer screens, and fewer concerns about cookies, Web bugs, or invisible markers placed on Web pages to track user movements, and other tracking software.

Ad servers like Doubleclick Inc. track Web users’ movements to increase the effectiveness of their ads. The company does not link Web habits with personal information without permission, and allows users to opt out of its data collection techniques.

For Web surfers uncomfortable with this practice, many ad blockers allow users to block cookies and Web bugs completely, or only allow them on selected sites.

“Once people get educated about what sort of a privacy risk general browsing represents, they get pretty animated,” said Thomas Matheson, president of ad blocker Guidescope Inc.

A Doubleclick spokeswoman declined to comment.

While nobody disputes the right of Web surfers to control what content hits their screen, Ginsburg said the wide-open Web could eventually be cordoned off into pay-only sites if everybody adopts blocking software.

“It’s going to be very small or very expensive,” he said. “Content is paid for by advertising. That’s the model we’ve all grown up with television.”

Some ad blockers don’t deny that their products could undermine the effectiveness of Internet advertising.

“Everybody acknowledges that the ad model is broken on the Web. It never worked, and it’s just going from pathetic to ridiculous,” said Jason Catlett, whose Junkbusters organization offers the Junkbusters Proxy ad filter.

Ginsburg said while click-through rates may have declined to around 0.5%, the total number of clickthroughs is higher than it was a year ago as more people are online. Furthermore, the slowdown in revenue growth has hit the entire advertising industry, not just the Internet, he said.

Guidescope’s Matheson is pushing an alternative approach.

“We are not anti-advertising. Advertising is very useful when it informs and provides bargains,” he said.

Rather than broadcasting ads to consumers who do not ask for them, Guidescope encourages users to sign up for e-mail promotions in areas of interest. The messages are sent to an anonymous Web-based inbox to preserve customer privacy.

Matheson said the relatively high participation rates–between 25% and 50% of Guidescope users sign up–prove the model’s success.

“Advertisers do come back to us, so we presume it’s working,” he said.

In the end, customer inertia may ultimately limit the number of Web users willing to download and install ad-blocking software, Catlett said.

“In a land of VCRs flashing 0:00, are most people going to install the software? I don’t think so,” he said.