Dusseldorf, Germany-based MediaBeam last month said it's testing a product that aims to detect ad-blocking software and charge the people using it a fee to view a Web site's content. The product, called AdKey, is scheduled for commercial release by November.
"People using anti-ad software...have the advantage to use our service but (not to) participate in the advertising system. But we need someone to pay the bill," said MediaBeam CEO Frank Beckhert, whose 15-person company has been testing AdKey for the last two weeks. "We just couldn't accept that people were using our service for free" anymore.
MediaBeam's announcement highlights fears among publishers of a consumer backlash against the moneymaking efforts that many sites see as necessary for survival amid a downturn in the advertising market. Numerous Web operators have added fees to services and content that were previously free, while others have opted for more intrusive forms of advertising.
Web sites, hoping to improve consumer response and lure reluctant marketers, are experimenting with a range of ad formats, including large interactive units, full-length banner commercials, and pop-up and pop-under ads.
Analysts said the introduction of software such as AdKey may spark a series of evasive moves by anti-ad software makers and Web publishers. As Web site operators employ software to block the blockers, ad filtering companies will most likely develop workaround solutions to the technology.
"What we have here is the escalation of the arms race between consumers and advertisers," said Jim Nail, an advertising analyst at Forrester Research.
For their part, ad-filter makers said they do not believe their products have had a significant effect on the bottom lines of Web publishers; rather, their filters have become a convenient scapegoat for deeper problems in the online-advertising market.
"Let's face it, online advertising isn't exactly keeping publishers flush with money, and some might understandably be feeling emotional about the shortfall," said Jason Catlett, president of Junkbusters, which offers free ad-blocking software. "But if people are determined enough to filter ads, then they're unlikely to cough up money to pay for content. Economically it's pretty irrational for publishers to erect these barricades."
Blocking the blockers
MediaBeam's Beckhert said he believes there is a large market for his company's software, starting with his own company's Web site, DirectBox.com. Beckhert estimates that 10 percent to 20 percent of DirectBox visitors use ad filter Webwasher, produced by a German spin-off of computer company Siemens. The free product receives about 2,000 to 5,000 downloads per day globally.
Industry executives estimate that the population of Net surfers using ad-blocking software is in the range of 2 percent to 5 percent. Software developers for Webwasher and AdSubtract, two popular ad-filter products, claim millions of users worldwide, including many who signed up this year.
Most ad-blocking software works by selectively loading graphics on a Web page. For example, an ad filter can screen out graphics based on their dimensions, often standard banner sizes, or by blocking the delivery of graphics served from common ad-network domains such as "ad.doubleclick.com."
AdKey operates from the server side through HTTP (Hypertext Transfer Protocol), a set of rules used for transmitting and receiving all data over the Web, by detecting whether the graphics queried for an HTML (Hypertext Markup Language) page have loaded properly. HTML is a collection of formatting commands used to create Web pages.
If the graphics have not loaded, the page can deliver a notice that prevents the Web surfer from viewing the page. Web publishers using AdKey must enhance their pages with special AdKey commands to classify content of the site.
MediaBeam is planning to license AdKey, a plug-in for Web servers, to corporations using Microsoft's Internet Information Server and Linux Apache, among others. Although the pricing model has not been set yet, Beckhert said that it will most likely cost companies $5,000 for the application.
"We've created workarounds to such problems, so it could escalate into a cat-and-mouse game," English said. "But consumers are fed up with a lack of limits and restraints of what the online advertisers are doing."
Horst Joepen, president of Webwasher, says that MediaBeam's software lacks teeth because blocking Internet ads is just one of Webwasher's functions. The free version of the tool, which has more than 5 million users, is an attractive marketing instrument to lure corporations to Webwasher's content-filtering application, which brings in most of its revenues, he said.
"Webwasher is not an anti-advertising technology; it's pro-user self-determination," Joepen said. "At the end of the day, they can still make up their mind to see ads or pay for content by choosing the sites they visit."
Thomas Matheson, president of Mendham, N.J.-based Guidescope, shares the view that filtering is a secondary consideration.
"The real issue is not whether people are filtering ads. Why worry about what 5 percent of the population is doing when most of the ads are being ignored?"