by Jessica Guynn …..
SAN FRANCISCO — Facebook will no longer allow ad blocking software on desktop computers.
Starting Tuesday, Facebook will make it tough for ad-blocking software to distinguish between a status update and a sponsored ad on the desktop version of the social network.
This the first time Facebook has attempted to circumvent the increasingly popular — and controversial — software that strips ads from websites, joining the advertising industry’s fight against ad blockers.
“We are making it harder for ad blockers to be effective on Facebook for desktop,” says Andrew “Boz” Bosworth, Facebook’s vice president of ads and business platform.
The move shows how seriously Facebook is taking the rise of ad-blocking software. Facebook, which makes most of its revenue from advertising sales, also stands to benefit financially as it hits the upper limit on how many ads it shows users.
A growing backlash is gaining steam as consumers get fed up with being bombarded by digital ads that obscure content, cause pages to load slowly, drain batteries, consume excessive mobile data or pose risks to their security or privacy.
But the advertising industry says ad-blocking software costs billions of dollars a year in lost revenue and violates an implicit social compact: People agree to be targeted by ads to consume free content and services.
Facebook is largely insulated from ad-blocking software which typically does not work in mobile apps, where Facebook users spend the most time and Facebook makes the most advertising revenue. But the Silicon Valley tech giant is closely tracking the proliferation of ad blockers and their growing reach on mobile devices.
In 2016, 69.8 million Americans will use an ad blocker, an increase of nearly 35% from last year, research firm eMarketer says. Next year, that figure is expected to grow another 24% to 86.6 million people. Ad-blocking software is more common on desktop computers and laptops than on smartphones.
About 90% of users of the software block ads on desktop while about 30% block ads on smartphones. But, analysts say, as mobile device usage grows, so too will the use of mobile ad blockers. The number of people using ad blocking software on smartphones will jump nearly 63% this year, eMarketer projects.
The number of people in the U.S. using ad-blocking software will jump by double digits this year, according to research firm eMarketer. (Photo: eMarketer)
Facebook listed ad-blocking software as a risk in its most recent quarterly filing.
“Revenue generated from the display of ads on personal computers has been impacted by these technologies from time to time,” Facebook said in the filing. “As a result, these technologies have had an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed.”
Facebook makes nearly all of its revenue from advertising. It generated $6.44 billion in revenue in the second quarter, easily topping Wall Street estimates. Mobile represented 84% of the $6.24 billion in advertising revenue Facebook collected. Advertisers are flocking to Facebook to reach the 1.71 billion users who are hanging out there.
“Facebook definitely recognizes (ad-blocking software) as a risk,” eMarketer analyst Bryan Yeager says. “This is a way for them to see what type of success they could have at mitigating that risk and extending that into a larger scale strategy for all their properties.”
Research conducted for Facebook by Ipsos Connect found people resort to ad blockers to avoid disruptive ads (69%), ads that slow down the browsing experience (58%) and security and malware risks (56%).
“The rise of ad blocking is a clear signal to the ad industry that consumers are dissatisfied with their current experiences,” says Adam Isaacson, research director of Ipsos Connect.
Younger consumers are more open to being targeted by ads and having their data collected, but across the board consumers want ads to be personalized and relevant, Isaacson found.
Bosworth says Facebook does not believe ad blockers are the answer.
“I don’t think the all or nothing approach that ad blockers end up taking is really the best way forward,” said Bosworth, who would not say how prevalent the use of ad blockers are on Facebook. “Our approach is to find a middle ground. So instead of all or nothing, we want to partner with consumers through tools like ad preferences that allow them to work with us to see ads that are more relevant to their interests and that don’t interrupt their experience.”
Facebook is addressing the underlying reasons why people use ad-blocking software by updating its ad preferences tool so Facebook users can remove interests for marketing purposes — say travel or cats — and so they can remove themselves from businesses’ customer lists, Bosworth says.
It may take more than that to win over Jordan Hall, a senior application developer from Staffordshire in the United Kingdom, who says an ad blocker is one of the first extensions he installs when setting up a Web browser, and he also recommends ad blockers to family and friends.
Hall is mostly worried about security and privacy the incidences of major websites serving up malware to visitors through advertising networks. He also doesn’t like that ads, especially large image or video ads, increase load time for Web pages and gobble up too much bandwidth.
“I think most people who’d never used an ad or tracking blocker before would be amazed at the increased responsiveness and clean look of many popular websites when ad blocking is active,” he says.
Any service including Facebook that blocks ad blockers will drive away users, Hall says. He also thinks ad blockers will be able to override attempts to block them.
“I tend to use ad blocking on all sites by default, including social networks,” he says.
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