There are so many versions of the Internet birth. There are people who think that it all started in the 60s in one of the American states. Some other people are convinced that the Web was created by Tim Berners-Lee in 1989, who founded the World Wide Web.
The third version is that the real Internet wasn’t available until the Web 2.0 became popular in 2004. The latter is explained by the ability to engage with the content people see (and with other users) that came with the Web 2.0.
Well, all of them support wrong versions, as the Internet we are familiar with now was born in the mid-90s. One day, the executives of one American car manufacturing company didn’t like seeing its advertisement banner on one of the Internet pages.
They have seen their banner on the page with a rather eccentric sex act depicted there. A team from the company, including Ethan Zuckerman, who’s currently at the Massachusetts Institute of Technology’s Media Lab, decided to fix the situation. They demanded tripod.com to replace their banner with a separate window that would open with the opening of the original page.
They had invented what Zuckerman has since admitted is “one of the most hated tools in the advertiser’s toolkit”. It was the first pop-up ad. Since then, we have all been driven as mad as hell by pop-up ads that, perversely, destroy whatever goodwill we may have once felt towards the advertiser.
It’s not only pop-ups. Bad ads are to the internet what zits are to a teenager: an existential threat. They are a) too numerous; b) too low-quality — especially those claiming to offer one simple trick to get rid of belly fat; c) too creepy, following you round the web like a dodgy salesman; d) too bloated, soaking up bandwidth, slowing down page loads; and e) if you are paying roaming charges, they are costing you a fortune.
All of which is made worse by the knowledge that we are being followed by crazy “bots” that log everything we do online and leave little markers — “cookies” — inside your computer. Try this: install the bot and adblocker Ghostery on your browser. It shows all the bots it has stopped, which is, again, creepy, but at least informative. Or search Ghostery Global Opt-Out to see a full list of offending bots — there are hundreds. This is, without question, the biggest spy network ever devised.
What happened lately was that the entire ad- and netocracy was galvanised by the realisation that not only were we mad as hell, we also might not be willing to take it any more. The first evidence for this was a report produced jointly by the Dublin-based internet-ad researcher PageFair and the software company Adobe, showing that nearly 200m people in the world were using software to remove ads from web pages, and that number had grown by 41% over the previous 12 months. It was said this would cost internet publishers $22bn this year alone.
The second evidence was the announcement by Apple that its new mobile operating system — iOS9 — would offer adblocking. So when you fire up the Safari browser on your iPad or iPhone, you can choose to block ads in your settings. Apple does not rely on ads for its revenues; its main competitor, Google, however, is really only an ad company — it hates it when you say this — with 90% of its revenues coming from advertising.
There are 3.2bn internet users in the world, so some say that 200m active blockers is not that big a figure. The downside for the advertisers, however, is that most blockers tend to be young, male and well-educated. One study found they spend about €200 a month online. They’re a small but high-value group. Mobile browsers such as Safari, they also say, are not big ad carriers, the blocker is selective, allowing through certain types of ads, and ads in mobile apps would not be affected. The downside of this is that nobody has yet managed to find a way to produce effective ads on the small screens of mobile devices. PageFair, meanwhile, has been detecting adblocks at the rate of more than a billion a month.
In spite of the denials, the shudder that went through the industry was profound: the entire business model of the web was at risk. “The genie is out of the bottle,” says Johnny Ryan, head of ecosystem at PageFair. “You are going to get adblocking everywhere, it is just a matter of time.”
“For digital publishers it is an existential threat,” says Sarah Wood, co-founder of Unruly, which advises companies on video ads, “and digital publications are experimenting with new monetisation strategies as a matter of urgency.”
For 20 years it had been agreed that advertising was the way to make the web pay for itself, and that this advertising would, with the aid of bots, be very precisely targeted and personalised — so-called programmatic advertising. Is this model broken? Some say no, some say yes; but all agree that internet advertising had gone badly wrong and that something has to be done. But why? And what?
As if this crisis were not bad enough, it was accompanied by a Damascene moment among ad execs. The key document in their conversion is a book, How Brands Grow, by Byron Sharp, a New Zealand-born academic based in Australia. With impeccable logic, Sharp showed that personalised advertising does not work, especially for big brands, because in essence you are preaching to the converted — the band of loyal users who don’t need to be nudged into buying your fizzy drink or car.
Big brands need big, old-fashioned campaigns that reach everybody, because from out of this mass comes the crucial, unexpected, occasional buyer who drives growth over and above your loyalists. No bot can find these people, precisely because they’re the ones who don’t fit the demography. So the summits of advertising aspiration remain, in spite of technology, exactly where they were — on television, in the costly ad breaks in the Super Bowl in America, and in the weepies provided by the likes of John Lewis at Christmas.
In April, this digital crisis was redefined as spiritual by Giles Hedger, chief strategy officer at the advertising agency Leo Burnett. He defended the creativity of his industry against the tide of algorithms, apps and bots that threatened to mechanise everything.
“Marketing,” he concluded, “will never be about reductive computation. It will never owe as much to the computer that cracked the Enigma code and began the digital age as it does to the expansive power of ideas. Because marketing is not a riddle of elimination, but a test of the imagination, and there is no algorithm or app for that.”
This is not just a bunch of Mad Men clutching their heads and sobbing — they’ve always done that — it is a game being played for almost unimaginably high stakes. Globally, advertising is a £360bn market. This money is provided by us every time we buy something, and it supports Google and assorted other Silicon Valley companies, the publishing industries, ad agencies, IT companies and, indeed, the internet itself, as it is currently conceived.
But first things first. Adblocking, it is said, is a direct result of the poor quality and infuriatingly intrusive style of so much online advertising. As such, it is seen, optimistically by some, as an opportunity to put things right. “It is a short-term phenomenon that will force improvements in the marketplace,” say Brian Lesser, CEO of Xaxis, an advertising technology company based in New York.
“I say we are blessed with this catastrophe,” Johnny Ryan agrees. Sir Martin Sorrell, CEO of WPP, the biggest ad agency group in the world, also describes the crisis as an opportunity. “Let’s get this clear,” he says, “if it’s intrusive, it’s ineffective. If I am having a conversation on Facebook with my kids and I am suddenly peppered with ads, the result is going to be negative. If, however, I am searching a car site and looking at models of cars and I get a competitive ad, or one giving supplemental information on the model I am looking at, I am likely to welcome that.”
However, Sorrell also warns that mass adblocking would not be good for the consumer. “The price of content will rise. Advertising performs a useful function, so if adblocking does take off, it means the consumers will have to pay more, as subscription prices will rise.”
What Ryan calls the “catastrophe” of internet advertising has been 20 years in the making and it is, in his terms, the result of “a whole load of publishers who were desperate to monetise their stuff and who weren’t really taking the web seriously. They let advertisers run amok.”
The technology of internet advertising was enthusiastically embraced as a solution to the old paradox identified by the American marketing pioneer John Wanamaker — “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Using cookies, bots and all the other tech paraphernalia, it looked as though the wasted half could be identified and eliminated. Achieving this requires machine marketplaces that recognise you as a demographic profile with a fully logged browsing history so that, as soon as you open a web page, the spaces available are auctioned to those sellers seeking someone like you and the winning ad is then placed. This all happens within fractions of a second and no human is involved.
If this programmatic advertising takes over the entire advertising world — as many, including Brian Lesser, now say it will — then it has two immediate implications. Much of the grunt work done by ad agencies will be taken over by machines. Second, the auction algorithms are not interested in the nature of the publication they are selling against, they are interested in a demographic. This takes away a traditional prerogative of the editor — to accept or reject ads on the basis of their suitability to his or her publication.
This may be the future, but for the moment, it doesn’t work very well. It has become, in many respects, a race to the bottom, with prices falling for everybody. It will “erode ad prices wherever it’s implemented”, says Michael Wolff, the always-controversial media commentator. And if prices fall, so does quality.
“Programmatic automation of the ad-buying process is good for efficiency, bad for quality,” says Sarah Wood of Unruly.
It also doesn’t work, because it’s inaccurate. I am chased by ads that have nothing to do with me or my buying habits and none of which I find entertaining. I cannot remember clicking on a single one. As a result, I use an adblocker and have done for some time. Yet, at the same time, I know there is a problem with this, as do others with a conscience.
In September the internet developer Marco Arment launched an app called Peace, which could block content on Apple mobile devices using the new operating system. It became an instant bestseller on Apple’s app charts, but then, within days, Arment withdrew Peace, saying he didn’t “feel good” about it, adding that while adblockers “do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit”. On the other hand, he added, “I still believe adblockers are necessary today,” and he recommended Ghostery on desktops and laptops and Purify or Crystal on mobile devices.
This led to a quasi-theological argument about the justice or otherwise of using adblockers. Some, imbued with the utopian zeal of the early days of the web, argued they were an essential tool of internet liberation. Others pointed out that, never mind the big players, there were lots of small players, notably tech bloggers, who would simply go out of business if adblocking became the norm.
The response of the big players was more nuanced. The Guardian, for example, noted that I was using an adblocker and asked me to subscribe instead. This pleading became more annoying than the ads, so I “whitelisted” — turned off — the adblocker for its site.
The German tabloid Bild, meanwhile, has actually demanded a subscription payment from adblocking readers, otherwise they are banned. The London-based financial daily City AM is moving in the same direction, with a trial on the Firefox desktop browser that will probably extend to all devices and browsers. “We are solely ad-funded in print and digital,” says Martin Ashplant, City AM’s digital and social-media director. “We don’t have a subscription model to fall back on. The threat of adblocking as a growing issue was something that was always going to be on our radar.”
Ashplant looked into the problem, expecting to find perhaps 10% of his readers using adblockers. In fact, the figure was a much more alarming 20%: “That’s a fair chunk as it is, but it’s only going to get bigger. The threat to our revenue is quite clear.”
He also notes a painful injustice about the whole adblocking business. Adblocking software usually allows users to “whitelist” sites whose ads are not so intrusive or annoying. But Ashplant thinks, reasonably enough, that most people just won’t bother to do this, preferring to block them all.
This points, ultimately, to an all-out war between advertisers and blockers and, indeed, this is what Marco Arment called it when he withdrew Peace: “a First World, low-stakes, both-sides-are-fortunate-to-have-this-kind-of-problem war, but a war nonetheless, with damage hitting both sides.”
Martin Sorrell sees four possible outcomes: government regulation of blocking, which is highly unlikely. Or reducing the amount of advertising in America to British and French levels. Or there is the all-out-war scenario involving a concerted counter-strike against the blockers. (Twitter was awash with rumours that Google had gone down this road in September, when Chrome users with adblockers installed found themselves unable to “skip” video ads on YouTube, and had to endure the full three minutes. Google dismissed it as an unintentional “bug”.) Finally, Sorrell muses cautiously on the issue of reform.
“People talk about us becoming more creative, in terms of arresting people’s attention, and I think there is some validity in that. But when you think about advertising on small screens, like smartphones, it’s a very different job to a 60-second TV ad. People don’t like banner ads in the middle of a social conversation. Everything has to be done in context.”
The solution, for the moment, must be creative; to make people love rather than loathe the ads. The problem here is that people are not just anti internet ads, they are anti ads in general. “Trust in advertising is at an all-time low,” says Sarah Wood, “and we found that 93% of viewers would consider using adblocking software if nothing changed.” She says people are suffering from “content shock”. There is too much to take in from just being on the internet, let alone when dozens of ads are clamouring for our attention.
“We need to earn people’s attention by making an emotional connection. We must create content that will have a meaning and a value… In one sense, the technical adblocker is a red herring, because of the much broader debate about ad avoidance and the psychology of avoidance.”
After the shocks of this year, all the industries involved have begun to organise themselves to bring about higher-quality internet advertising. The Internet Advertising Bureau has launched a programme called Lean (Light, encrypted, ad-choice supported, non-invasive ads). “We take this [adblocking] seriously,” it says, “and we understand that when consumers encounter poor user experience online, this will lead them to block ads.”
On the other side of the fence is Ben Williams of Adblock Plus, a company that makes an adblocker and other software, but also earns money from companies that pay to be whitelisted (they have to agree to ad quality control first). Williams organised a meeting at Camp David of all the key players. The conclusion was that everybody was guilty.
“What everyone eventually will admit to is that we all got ourselves here, we didn’t develop optimally. Now we see what everyone would agree is a broken online advertising ecosystem.”
AdBlock Plus is planning to start a global committee to vet ads, presumably threatening the non-acceptable with automatic blocking.
Perhaps, in the future, a wholly new model will emerge. Sarah Wood points to the invitation-only social-media site tsu.co, which returns 90% of its revenue to its users on the basis that they provide the content. All the famous social-media sites — Twitter, Facebook and others — consist solely of user content, an asset their shareholders acquire for nothing.
Another cost-free asset of the big tech companies is our personal information — the big data hoovered up from your web browsing by those busy little bots. One suggestion is that we should be free to offer or withhold our data; that, in short, it should be our own tradeable asset. No advertiser really thinks about this seriously, but the scale of big data, held as a tradeable asset in private hands, may prove a genuine threat to freedom.
Probably, the future will be none of the above. What is clear is that internet economics is a subject still in its infancy. The technology remains too dynamic, and too wildly unpredictable, for any one model to look like a favourite.
We are living, says the advertising blogger Bob Hoffman, in “the golden age of bullshit”, which is another way of saying nobody knows anything. Or, perhaps, they know just one thing: that no car company wants its banner ad on a page about unusual sexual practices.