By Jack Marshall
When Dean Murphy created "Crystal," an application to help users
block ads on Apple Inc.'s mobile devices, he knew there was pent-up
demand from consumers frustrated with how cluttered the Web has
become.
Still, the U.K.-based software developer was surprised by how
fast consumers snapped up his product. In the week following its
Sept. 16 launch, the 99 cent app received over 100,000 paid
downloads, according to data from mobile-app market intelligence
firm Apptopia, generating an estimated $75,000 for Mr. Murphy.
He's hardly the only developer cashing in on ad blocking. A
cottage industry is emerging around the phenomenon as it gains
momentum with consumers seeking to avoid ads on both mobile and
desktop devices.
Apple's enabling of the technology in the latest edition of its
mobile operating system "iOS" has given rise to many new entrants,
from BlockBear to Blockr. With over 35,000 downloads and a $3.99
price tag, an iOS blocker called "Purify" has generated over
$150,000 dollars in revenue since its launch on September 16th,
Apptopia said.
In most cases, these are small-time software developers -- one
or two-man shops -- doing this in their spare time. Mr. Murphy
spent two months creating Crystal by himself from his home. He
views Crystal as a way to challenge himself and improve his
programming skills, he said, describing the app creation process as
"a labor of love."
Ad-blocking could become a major threat to ad-supported online
publishers if it continues to gain traction. Many publishers say
they haven't seen a material increase in mobile ad blocking
following Apple's new software release, but describe the wider
issue of ad blocking as a serious and growing concern.
Some ad-blocking software developers are experiencing pangs of
conscience as they consider that sites that rely on ads for revenue
might get crushed by the blocking barrage. A blocker called "Peace"
generated over $110,000 dollars in sales and 38,000 downloads in
just two days last week, according to Apptopia, before its creator
Marco Arment removed it from the store.
"I don't feel good making [an ad blocker] and being the arbiter
of what's blocked," Mr. Arment wrote in a blog post explaining his
decision.
There's money to be made blocking ads and, as it turns out,
allowing ads to evade ad blockers. Eyeo GmbH, the company behind
popular desktop ad-blocking tool Adblock Plus, now accepts payment
from around 70 companies in exchange for letting their ads through
its filter. Eyeo stipulates that they must comply with its
"acceptable ads" policy, meaning their ads aren't too disruptive or
intrusive to users. In total, ads from some 700 companies meet the
acceptable ads policy, an Eyeo spokesman said.
Eyeo is now reaching out to developers of other ad-blocking
tools to cut deals that allow certain ads to pass ads through their
filters, too, in exchange for payment.
Mr. Murphy said he's taken Eyeo up on its offer, and plans to
implement an option within his app whereby "acceptable" ads will be
displayed to users. The feature will be switched on by default, Mr.
Murphy said, and he will receive a flat monthly fee from Eyeo in
return. Mr. Murphy declined to disclose the fee, but said he
expects to make less money from Eyeo's payments than from sales of
the app itself.
According to Mr. Murphy, he isn't adding the option for
financial gain, but rather to make sure publishers aren't
overburdened by all-out blocking of ads on their sites.
"Given how popular Crystal has become, it doesn't provide any
way for users to support publishers," he said. "I decided that's a
good feature to provide, and from what I've seen the 'acceptable
ads' policy doesn't let through what I'd classify as bad ads."
Eyeo declined to disclose which companies are on its "whitelist"
-- those that escape ad-blocking. According to a person familiar
with the company's business relationships, Eyeo's paying customers
include Google Inc., Microsoft Corp. and Taboola.
Typically the company seeks payment from any firm that generates
more than 10 million unblocked ad impressions a month, an Eyeo
spokesman said. Eyeo's fee is tied to the amount of revenue its
clients garner from the ads it passes through its blocker.
Some companies are taking a different approach to ensure their
ads are seen, using new technology tools to disguise their ads and
to sneak them past ad-blocking tools.
New York-based startup Secret Media, for example, says it's now
working with 10 publishers in the U.S. to help them deliver video
ads in a way that cannot be detected by ad-blocking tools.
Most ad-blocking software works by preventing code from known
advertising companies from loading into web pages. Secret Media's
product works by obfuscating that code, thereby making it hard for
ad blockers to identify it and to prevent it from loading on users'
machines.
Secret Media Founder and Chief Executive Frederic Montagnon said
the company's goal is to preserve the ad-supported media business
model. But even Mr. Montagnon said he understands why consumers
want to block ads.
"The number of banners is too much," he said. "If you mix
banners with video and everything else, it's too much for everyone.
At this stage the advertising market is going crazy."
Because of that, Mr. Montagnon said Secret Media plans to only
work with "premium" publishers who don't bombard users with large
amounts of low-quality advertising.
Mike Shields contributed to this article.
Write to Jack Marshall at Jack.Marshall@wsj.com
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(END) Dow Jones Newswires
September 24, 2015 13:47 ET (17:47 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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