Economics Everywhere | Issue 2

Economics Everywhere | Issue 2

Adblock

There’s no such thing as a free lunch. However, the internet is an all you can eat buffet of free lunches, provided you can put up with the ads. Enter adblock stage left. Adblock creates the ultimate user experience; everything is free and all the intrusive pop-ups are gone. But eventually, all this stealing is going to catch up with us.

Adblock relies on the idea that not everyone will actually use it. This concept is formally called the ‘free rider problem’; users benefit from a good without paying for it, relying on the contributions of others. Too many free riders lead to the good or service not being able to be provided. Unfortunately, the number of adblock users has been growing dramatically in the last few years.

A 2015 report by PageFair estimated that adblocking grew by 41 percent over the course of the year, resulting in 198 million active users of adblock and costing publishers nearly 22 billion dollars in revenue. Figures from PageFair’s 2016 mobile adblocking report follow the same trend, stating that 419 million people, or 22 percent of the world’s 1.9 billion smartphone users, are using adblock on the go. It should be noted that these reports have been criticised as biassed; PageFair has a large stake in the war against adblock, providing services to websites looking to reclaim their ad revenue. 

Nonetheless, the number of free riders is increasing at a phenomenal rate. Sooner or later, online publishers will not be able to sustain themselves and will have to shut down operations. This eventuality not only limits our content choices, but also reduces the competition for our attention. Less competition could mean that the publishers that survive may not even worry too much about the type of content they produce, instead coming out with the click-baity list articles that they know will get views. Gone will be the little guy with the cool idea, squashed by the likes of Buzzfeed.

Adblock supporters claim that the growing use of adblock is a message to online publishers and advertisers—make your ads bad and the masses will retaliate. 

Publishers need to solve out the underlying problems with their current advertising model if there is any hope of slowing down the adblock epidemic before the amount of free riders hits a critical mass.

This article first appeared in Issue 2, 2017.
Posted 1:56pm Sunday 5th March 2017 by Danni Pintacasi.