No one actually clicks the friggin' things, do they?
Dollarwise, Ad Blockers Add Up
By Charles Babcock, InterATctive Week
April 9, 1999 4:46 PM PT
The number of suppliers of ad blocking software for Internet clients is growing, and their makers claim there is an increasing appetite to stifle the Internet's onslaught of advertising.
The two best-known ad blockers, AtGuard from WRQ (www.wrq.com) and InterMute from Internet Mute (www.intermute.com), were joined recently by a third entrant, WebWasher from Siemens (www.siemens.de/servers/wwash/wwash_us.htm). All are available for free download to consumers and at prices of $19.95 to $29.95 to businesses.
The real interest in ad blocking may lie inside corporations, where implementing ad blockers on users' desktops can reduce network download traffic by as much as 25 percent, says Anne Marshall, AtGuard product marketing manager.
Ad blockers are one way for users who already have seen enough to do something about advertising downloads. Because many ads come from well-known, centralized servers, any calls to those servers can be blocked at the client's desktop. AtGuard even allows the user to drag a specific ad to a trash can, which will prompt the software to block any future calls for the ad.
The blockers also can detect animated GIFs, Java animations and pixel-intensive graphics, which dramatically slow downloads, the ad blocker suppliers say.
So far, blockers have caught on with only a small percentage of the population, but that doesn't mean they can be ruled off the Internet client of the future as the advertising presence grows.
Total Internet advertising is expected to top $1 billion this year, up from $267 million in 1996, the first year figures were offered by the Internet Advertising Bureau.
The most recent figures from IAB indicate that the growth in consumer advertising is about to displace computer advertising as the leading segment of Internet ad suppliers.
"The more traditional consumer product advertiser is starting to take over. The Internet is no longer just a medium for techno-geeks," says Tim Meadows, an analyst at the Internet site usage measurement firm NetRatings.
With advertisers pouring dollars into Web sites, the advent of the ad blocking software on the desktop is a threatening prospect for many. Major search engines such as Yahoo! or online services such as America Online rely heavily on advertising, as do news organizations like CNet and ZDNet, which is owned by InterATctive Week publisher Ziff-Davis.
Evan Neufeld, director of Jupiter Communications' online advertising strategies, says ad blockers will be used only by a fringe group -- "the 10 percent who say they hate advertising."
Other Internet users will ignore ad blockers and pick and choose what they want to look at on the Web, including ads, he says.
The alternative scenario, where millions of Internet users look at content but block out advertising, "is horrible. It would certainly change the economics of the Internet," he says.
But some experts, such as Jakob Nielsen at consulting firm Nielsen Norman Group, are not convinced Internet advertising has an assured future. "Banners have been blinking for some time, but we are starting to see sound effects as well.
"This is all a desperate reaction against the fact that advertising doesn't work on the Web," he says. Neufeld at Jupiter disagrees: "Most people accept the fact that ads bring you the Internet content for free."
However, Nielsen's view is backed by a standard measure of advertising effectiveness, the click-through rates on ads of major sites.
NetRatings measured click rates of 1.35 percent in early 1998, and the rate declined consistently through the year. "I think it's safe to say it's still declining," says Meadows, who pegged the current click rate as "below 0.5 percent," or less than one in every 200 users viewing an ad.
It may get worse. WRQ's Marshall says that demand remains brisk for its AtGuard product. The product was downloaded 12,000 times the first month it was offered last year, she says, and downloads have doubled since November 1998.
Blockers may catch on, Nielsen says, because Web users are in a different class from television viewers. Advertisers fear their ads on the Web are not attention-getting enough, but they define the problem the wrong way, he says.
"The reason they don't work is because they are in a fundamental conflict with the user experience, which is: I go where I want to go when I want to go there. It is a very goal-driven environment."
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