Despite Wide Usage, Firms Say Ad-Blocking Software Lacks Impact

Despite the millions of businesses and consumers using ad-blocking software, online ad firms claim they remain unconcerned about the technology.

Firms such as WebWasher and interMute say users of their software can block banner ads, including the Interactive Advertising Bureau's new larger ad sizes, as well as cookies and certain types of files.

More than 4 million consumers and several businesses are using WebWasher's software, the company claims. The product's default setting filters interstitial pop-up ads, banner ads, portable document format files, executables, cookies and other communications.

InterMute, Braintree, MA, which makes AdSubtract software, will have shipped its software to 20 million users by the end of this year, said CEO Ed English. In addition, he said, bundle arrangements with modem manufacturers will place the software on 70 percent of North American retail modems by late summer. English added that three of the top 10 PC manufacturers also are adding the technology to their PCs.

In addition to continued consumer interest, corporate America will be the next big users of the technology, ad-blocking firms say.

“Companies have no interest in ads entering the building. That's not why they put the high-speed Internet connection there,” English said.

“Several Fortune 50 companies are testing our product to save bandwidth and create a more productive work environment,” said Frances Schlosstein, vice president of business development at WebWasher, Paderborn, Germany. Schlosstein said the software saves 25 percent to 45 percent of bandwidth per page.

“Many companies already screen out unwanted spam … and limit how large an attachment could be,” said Albert Catalfamo, programmer of shareware program AdKiller. “Now some are starting to look at other sources of bandwidth waste such as advertising banners. This would also include Flash and other rich media if that media was an advertisement and not something useful.”

Corporate fire walls are already a major concern of business-to-business e-marketers. “Blocking '.exe' files and closing fire wall ports typically closes the door on HTML and sometimes even Java-based documents. My concern is that this common combination closes just about every way I can think of to send rich media documents into my prospect base,” said Bruce Ciarleglio, vice president of sales and marketing at Aston Group, La Jolla, CA.

Ad-blocking firms are also in talks with Internet service providers that want to offer consumers faster bandwidth and less clutter. “Ad banners account for anywhere from 70 percent to 90 percent of their bandwidth usage,” Catalfamo said. “Since companies that provide high-speed connections to ISPs charge by bandwidth usage, removing ads will dramatically decrease the cost of providing their service. They will also use the 'ad removal service' as a selling point to get new customers who don't like seeing ads.”

Still, advertisers and ad tech companies said they have seen zero impact on their business.

“This doesn't present a danger in the near term and probably not in the long term. As long as business models require that a piece of revenue comes from advertising, they [Web sites] will require that users see it,” said Michael Rowsom, general manager of 24/7 Media's Mail division.

Sean Brevick, director of marketing services at Bluestreak, added, “We haven't heard much about it. The bigger concern would be more towards offline [ad deleting], such as TiVo.”

Interactive Advertising Bureau executives are concerned enough to be looking into the legality of the ad-blocking software, including possible intellectual property problems. However, bureau spokesman Stu Ginsberg said, the software “hasn't had as much consumer impact at this point. These companies are doing a PR push.”

Ad companies acknowledge that this software exists because of the “abuse” of banner and Flash ads by some companies. Some cited America Online's numerous pop-up ads at start-up as an example.

“Publishers have not gotten creative with advertising technologies. It's an advertising ghetto on some Web sites,” Brevick said. “Consumers may be getting fed up.”

IAB's larger ad sizes will only make consumers more interested in ad-blocking software, according to ad-blocking firms. “Advertisers said, 'Our click-through rates are really low, so let's create bigger, more intrusive ads.' That's not going to fly long term,” Schlosstein said. “It's too intrusive on individual consumer rights.”

English added, “The clutter-to-content ratio has gone up quickly. We are hearing over and over that people don't want to see content wrapped around a huge, blinking ad.”

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