Troubles Ahead for Internet Advertising

[Commentary] When it comes to advertising, the Internet is at war with itself.

Much of the Web relies on advertising income, but anti-ad technology could put a dent in that revenue. A recent report from the Web service PageFair said that on average 22.7 percent of visitors to 220 Web sites were using ad-blocking software, which automatically removes most ads from a Web page. The figures were highest in gaming and technology Web sites, which tend to have a large concentration of savvy users. PageFair said the practice was growing at a rate that suggests almost all sites will appear without ads by 2018.

Earlier this year, Google kicked Adblock for Android mobile devices off its store, making it harder to get the mobile version (it’s still available at an Adblock site). This “had a significant impact on user growth,” said Till Faida, a co-founder of Eyeo, which produces the Adblock software for numerous browsers. Google is keen to make income from mobile ads, partly because the price advertisers pay Google for largely nonmobile Web advertising has fallen for the past seven quarters. Advertising, in effect, will have a less distinct role in overall marketing. And when a product or function is subsumed, it typically loses some of its profit margin.