Digital

All Eyeballs on Reader Reaction as Ad-Blocking War Comes to India

ToI and HT are a part of the group of offenders when it comes to intrusive online ads. How will the ad-blocking wars play out in India?

A sustainable business model that satisfies readers as well as publishers needs to be found. Credit: PTI

A sustainable business model that satisfies readers as well as publishers needs to be found. Credit: PTI

“Half the money I spend on advertising is wasted,” former US postmaster general John Wanamaker once famously lamented. “The trouble is I don’t know which half.”

The trouble with online advertising, even with all of the medium’s abilities to track and closely identify its intended audience, is that there’s a very real likelihood that all your advertising budget is being wasted because of ad-blocking software.

On Thursday, reported first by FactorDaily, readers in India woke up to the consequences of their ad-blocking ways: major news publishers including Times of India (ToI) and Hindustan Times (HT) started flashing messages like the one above that asks users to turn off their ad-blockers if they want to view the content in question.

Both publications come with a slightly different way of trying to convince their users. While the homepages of both websites can be viewed, once a user clicks on a ToI specific story they are not allowed to view anything; a HT story however gives the reader two paragraphs of content after which they are prompted (very much like a subscription warning) to turn off their ad-blocking software.

A little premature?

Multiple executives from advertising agencies such as Media.net that The Wire spoke to, who had meetings with ToI and HT officials in the months running up to this decision, believe that the time has come for such a step.

“As India’s digital economy bursts at its seams, the pace at which consumer technology debates happen in India are also speeding up. So while issues such as net neutrality and privacy, which started being hotly debated in the US over ten years ago, are only happening now in India…other issues such as ad-blocking which only blew up in the US last year are already impacting India,” said one advertising executive.

And yet, publicly available data on the popularity of ad-blocking software in the country and the impact of ad-blockers on India’s multimedia and content industry is muddled at best.

There are a few random data points: market researcher GlobalWebIndex in a 2015 survey showed that “42% of India’s iPhone 6 users used the in-built ad-blocking software compared with a global average of 31%.” This doesn’t say much though – Apple’s market share in India stands only at little under 2% of total sales.

Banning the ad-blockers. Credit: TOI

Banning the ad-blockers. Credit: TOI

Most of the data that comes up again and again is from PageFair, an Irish start-up whose website states that it “helps companies bypass ad-blocks”.  A 2015 Mint article points out that the “number of people actively using ad blockers in India increased from two million (in the second quarter of 2014) to 4 million by June 2015” – a grand total of only about 2% of India’s total internet users.

These four million “active ad-block” users, according to the PageFair study (which, curiously, doesn’t specifically say four million) hit Indian publishers for $74 million in the second quarter of 2015.

What further complicates matters is that PageFair came out with a subsequent report in 2016 that specifically addressed mobile ad-blocking, which has been widely believed to be more rampant in Asia-Pacific countries. The results of this study were slightly more alarming: over 120 million users in India were using mobile browsers that had built-in ad-blocking capabilities. This means that as of May 2016, it is likely that a substantial chunk of those 120 million users were engaging in some form of ad-blocking; the caveat being of course that they had not switched those browser-specific ad-blocking capabilities off.

To put the 120 million statistic in perspective, India currently has 300-350 million desktop and mobile internet users.

Another important note of caution here, one senior Google executive warned The Wire while talking about the study, is that it doesn’t mean there are 120 million people in India who have “actively gone and downloaded AdBlock Plus or something similar”. It just means that the mobile browser that they are using (either by default or choice) has built-in ad-blocking capabilities; the nature of which is not known.

“One of the reasons that it [the 120 million number] is so high is because UC Browser has built-in ad-blocking capabilities and it has currently a little over 50% market share in India… even ahead of Google Chrome,” said the Google executive. UC Browser, made by Chinese e-commerce giant Alibaba, entered India at a time when the number of proprietary Android smartphone browsers were few and has made significant inroads.

Much ado about nothing?

Why does the number of Indian ad-blockers and a quantitatively-verifiable, ad-blocking-caused impact matter? After all, if ToI and HT have started banning ad-blocking, it’s obvious that there are enough ad-blockers to pose a threat to the the publications’ bottom-line.

The most critical argument against digital advertisements – in their current, privacy-intruding form – is that they have gone far beyond their initial social contract with readers. The implicit understanding was that readers enjoyed free content in exchange for viewing a couple of advertisements. The online ads that many publications serve up these days (sometimes for no fault of theirs) however hog user data, pass on viruses and stall network activity. The worst advertisement networks no longer serve their earlier purpose of trying to inform a reader about a product but instead are used to engage in the illegal collection of user data.

The public-facing heads of InMobi, an Indian online advertising firm that at one point used to command billion-dollar valuations, for instance, have always maintained that it “makes sense for advertisers to respect user privacy”. And yet, just last week, InMobi was slapped with a $4 million fine by the FCC in the US for “tracking the location of hundreds of millions of consumers, kids included, and using that information to serve behaviourally targeted advertising.”

As well-known app developer Marco Arment described the current state of affairs last year: “Publishers, advertisers, and browser vendors are all partly responsible for the situation we’re all in. Nobody could blame the users of yesteryear for killing pop-up ad rates, and nobody should blame the users of 2015 for blocking abusive, intrusive, misleading, and privacy-stealing ads and trackers, even if it’s inconvenient for publishers and web developers.”

While New York Times CEO Mark Thompson may declare that “no one who refuses to contribute to the creation of high quality journalism has the right to consume it”, it doesn’t take away from the fact the news websites are more likely to feature trackers; even more than pornographic websites.

In Digital India, the argument in favour of ad-blockers becomes far more poignant. Bloated online ads, that often come with malicious code, can puff up the data size of a web page to as much as 14 mb, drain battery power and stall network activity. This is intolerable for internet users in Tier-3 and Tier-4 towns and definitely not acceptable for the residents of India’s villages; seeing as most of them will be forced to depend on some form of public Wi-Fi system as their sole means of connecting to the internet.

One of the reasons that Alibaba’s UC mobile browser is so popular in India – and why built-in ad-blocking browsers are popular across Asia – is because, as the PageFair study notes, it improves “page speed and reduces bandwidth consumption on [a] mobile”. Accordingly, these type of browsers “are most rapidly adopted in markets where mobile data infrastructure is less developed and therefore slow and/or expensive relative to income”.

Worst of the lot

As a senior Google executive pointed out to The Wire, “it’s no coincidence that ToI and HT both have some of the most intrusive and annoying online advertisements amongst all Indian news publishers”.

“It makes sense for both of them deciding to go in on this [ad-blocking] together. They are some of the biggest online traffic generators in India, both have intrusive advertisements and if it backfires, it hurts both of them jointly,” the search giant executive said.

One of the more common theories floating around the online advertisements and digital marketing industry currently is that more news publishers will join in on the ad-blocking because it’s being currently seen as a way of avoiding subscriptions for the next couple of years. One Indian Express business executive concurred with this perspective.  “It’s being seen as an experiment for now. If it works, then the question of digital subscriptions can be postponed for another day.”

There’s are a very few precedents in this matter. Forbes, in December 2015, decided to ban ad-blocking software for around 50% of the publication’s ad-blocking visitors. The company’s business executives recently came back with some results: Around 4 million desktop visitors (or 42% of those asked) either “disabled their blockers or whitelisted Forbes.com”. In addition to this, “visitors who turned off their blockers spent an average of 149 seconds per session versus 117 seconds for visitors who were placed in a control group with their ad-blockers still active”.

For Indian news publishers, there is very little doubt that this is a gamble that will affect the future of journalism and content production. History tells us though that a sustainable business model, which takes into account the concerns of readers and users, is the way to go. It may be naive or seem foolish to suggest that ToI and HT should orient their business models to accommodate rural, internet-handicapped or privacy-conscious readers. It is also true, however, that writing a piece of code that gets around the ban on ad-blocking software is playfully simple.

Disclaimer: The Wire competes with Times of India, Hindustan Times and other news publications mentioned in the article.