- The Washington Times - Wednesday, August 10, 2016

Facebook rolled out a feature Tuesday that aims to circumvent ad-blocking software as millions of internet users adopt tools intended to restrict the type of content displayed on their computer screens.

With nearly 70 million Americans expected to use ad-blocking tools this year, the implementation — if successful — may help keep Facebook afloat in the face of an impending multibillion-dollar tax bill revealed through an IRS filing last month, according to research firm eMarketer.

Facebook made $3.69 billion in profit on $17.93 billion in revenue in 2015, and generated $6.44 billion in revenue during the second quarter of 2016. With a majority of that money being made by paid advertising, however, the proliferation of ad-blocking tools in recent years risks making further profit an obstacle for the social network, even with upwards of 1.7 billion users logging on to the website each month.

“Revenue generated from the display of ads on personal computers has been impacted by these technologies from time to time,” Facebook said in its quarterly filing last month. “As a result, these technologies have had an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed.”

Indeed, eMarketer predicts the number of Americans relying on ad-blocking software will grow by 24 percent next year to 86.6 million people, undoubtedly putting a dent in Facebook’s potential profit. But in detailing Facebook’s latest maneuver in a blog post this week, the vice president of its ads and business platform, Andrew “Boz” Bosworth, described the decision as one aimed at helping its users, not its financial interests.

“When they’re relevant and well-made, ads can be useful, helping us find new products and services and introducing us to new experiences — like an ad that shows you your favorite band is coming to town or an amazing airline deal to a tropical vacation,” Mr. Bosworth wrote. “But because ads don’t always work this way, many people have started avoiding certain websites or apps, or using ad blocking software, to stop seeing bad ads. These have been the best options to date.

“We’ve designed our ad formats, ad performance and controls to address the underlying reasons people have turned to ad blocking software,” he wrote. “When we asked people about why they used ad blocking software, the primary reason we heard was to stop annoying, disruptive ads. As we offer people more powerful controls, we’ll also begin showing ads on Facebook desktop for people who currently use ad blocking software.”

Those “disruptive ads” aren’t problem just for Facebook, but the entire industry, Mr. Bosworth told The New York Times this week. As millions of people each year turn to ad-blockers, however, he suggested stakeholders should consider other options.

“This isn’t motivated by inventory; it’s not an opportunity for Facebook from that perspective,” he told The Wall Street Journal. “We’re doing it more for the principle of the thing. We want to help lead the discussion on this.”

Those on the other side of the equation, however, are predictably displeased. Ben Williams, the communications and operations manager at the company behind one of the tools likely affected by Facebook’s announcement, Adblock Plus, said the social network’s decision was “an unfortunate move” that takes a “dark path against user choice.”

“Facebook dominates social media because it has delivered a valued service to its users. But with its initiative to deliver ads to people who may not want to see the ads, Facebook is gambling with the relationship it has with its users,” Larry Chiagouris, a professor of marketing at Pace University’s Lubin School of Business in New York, said Wednesday in a statement to The Washington Times. 

“For a variety of reasons, Facebook will likely walk back this effort or modify it in such a way that users will continue to have control of their desktops,” Mr. Chiagouris said. “If Facebook does not do so, competitive forces will work in such a way to force it to do so.”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide