Ars Technica has a post up in which they argue that ad blocking software seriously hurts their main revenue stream (advertisement). A quote from that post:
My argument is simple: blocking ads can be devastating to the sites you love. I am not making an argument that blocking ads is a form of stealing, or is immoral, or unethical, or makes someone the son of the devil. It can result in people losing their jobs, it can result in less content on any given site, and it definitely can affect the quality of content. It can also put sites into a real advertising death spin. As ad revenues go down, many sites are lured into running advertising of a truly questionable nature. We’ve all seen it happen. I am very proud of the fact that we routinely talk to you guys in our feedback forum about the quality of our ads. I have proven over 12 years that we will fight on the behalf of readers whenever we can. Does that mean that there are the occasional intrusive ads, expanding this way and that? Yes, sometimes we have to accept those ads. But any of you reading this site for any significant period of time know that these are few and far between. We turn down offers every month for advertising like that out of respect for you guys. We simply ask that you return the favor and not block ads.
Basically, what they are saying is, “in order to receive value from Ars Technica, a customer needs to accept some abuse in the form of advertisement”. How’s that for a business model. I can understand and appreciate that a site like Ars Technica makes considerable costs (employees, bandwidth) allowing them to create and distribute solid technological content. I can also appreciate that in order to survive or even create a profitable business Ars Technica needs a revenue model.
But the problem I have with this quote is that they are clearly walking away from a responsibility that belongs to them, not to the end-user. They are addressing the wrong issue. The issue isn’t users blocking advertisement. The issue is that Ars Technica has chosen a revenue model that provides little value to its users. Those user that block advertisement clearly do not care about them. Another quote:
Imagine running a restaurant where 40% of the people who came and ate didn’t pay. In a way, that’s what ad blocking is doing to us. Just like a restaurant, we have to pay to staff, we have to pay for resources, and we have to pay when people consume those resources.
This analogy is wrong of course. The correct analogy would be “Imagine a restaurant where people who come in to eat have to see large billboards a t their table in order to consume food.” The end result would be that more than 40% will likely never visit that restaurant again, no matter how great the food is.
Generating revenue online is not easy. Generating revenue online with great content is not easy either. Advertisement, and the advertisement based business models are the easy way out. Instead of making tough decisions, think creatively about how your users WOULD pay for the service you offer, you choose advertisement, and then complain that no one cares about it.
It’s time we accept that the advertisement based business model simply will not do. Advertisement only works as a business model if the advertisement itself provides the user with direct value. In all other cases it is just a simple form of customer abuse. The sooner we accept this, the sooner we can start dealing with it. Each and every quality site will cease to exist, simply because their underlying advertisement based business model is faulty. I realize that users are not (easily) willing to pay for a great service. But that still doesn’t provide justification for a business model that is doomed to fail.
There are tons of other ways that publishers could attract revenues. The best business models leverage user value. Maybe that is the real issue that needs to be addressed by Ars Technica.