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Summary

In August 2016, around 80% of Swedish publishers plan to block users of ad-blocking software from accessing content, forcing readers to pay for content or uninstall their ad-blocker. Swedish publishers – like many publishers around the world – are upset at what they see as a protection racket, where advertisers and publishers can pay for white-listing. It is difficult to quantify the impact of ad-blocking on digital advertising revenues. Some publishers – and politicians – have had enough, and are joining forces to strike back.

Publishers should follow the Swedish example and join forces

Publishers across the world resent consumers' growing use of ad-blocking software. The software has a direct impact on the advertising revenues that publishers rely on; digital circulation revenue is simply not big enough and will not grow quickly enough for publishers to count on.

Ad-blocking software vendors such as Eyeo operate white lists, where publishers and advertisers can pay to have their adverts shown to users. However, this only helps individual publishers and not the industry as a whole, and publishers still have to agree to only show advertising that meets the ad-blocking software vendor's criteria for "acceptable" advertising. Eyeo asks for 30% of the revenue generated by unblocking ads for publishers with more than 10 million adverts being blocked a month. The UK's culture minister, John Whittingdale, has joined the debate, calling this "a modern day protection racket."

A number of publishers have attempted to prevent users of ad-blocking software accessing content, but the joint effort by Swedish publishers is a first. As well as asking users of ad-blocking software to pay or switch off their ad-blocker, participating Swedish publishers can also reduce the quality of video for users of ad-blocking software, so that the content is almost unwatchable.

What effect this approach will have is unclear, given the ability of some ad-blocking software to foil attempts to block it. Similar attempts in English-language markets may struggle given the ready availability of free content. It may be that attempts to improve consumer ad experiences will prove to be more effective. In Ovum's view, publishers should consider following the Swedish example and dealing with the ad-blocking problem not as individuals but as a group with a shared goal.

Appendix

Further reading

2016 Trends to Watch: Digital Consumer Publishing, ME0002-000635 (December 2015)

Ad-Blocking: How to Address the Threat to Revenues, ME0002-000606 (September 2015)

Digital Consumer Publishing Forecast: 2015–20, ME0002-000586 (July 2015)

Digital Consumer Publishing: Reaching for 2020, ME0002-000583 (July 2015)

Author

Charlotte Palfrey, Research Analyst, Digital Media

charlotte.palfrey@ovum.com

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