Live

Watch CBSN Live

Ad blockers have media companies in a bind

Media companies haven't figured out how to combat the growing popularity of ad blocking software.

About 10 percent to 15 percent of visitors to news sites are now deploying the software, and that figure is "rising rapidly," according to David Chavern, head of the Newspaper Association of America.

"Some have less," he said. "Some have more, but clearly it's getting to be more than an annoyance, and the trends are bad."

Publishers are trying everything to counter ad blocking's growing popularity, from restricting access to their sites for readers who use the programs to asking people to add their sites to a "white list" of those whose ads won't be blocked. There's no definitive evidence to show that either approach is working, and that concerns media companies that rely on advertising to fund their operations.

Apple enabling ad-blocking apps

"What you're finding in the U.S. is that most publishers have been ignoring the issue because the incidence of ad blocking hasn't been as high (compared with Europe), although trends are going up sharply" said Chavern. "Folks have tried these experiments. ... I don't know whether any of those have worked particularly well."

Among the U.S. sites that ad blockers are hitting especially hard are those that cater to tech enthusiasts and gamers, according to the Interactive Advertising Bureau's Alanna Gombert. Data released this week by Internet guru Mary Meeker and by PageFair showed that ad blocking technology use is surging on mobile devices.

Meeker, a veteran Wall Street analyst who's now a partner at the venture capital firm Kleiner Perkins Caufield & Byers, found that 420 million people around the world block ads on their mobile devices, a key market for media companies. That represents a 94 percent increase over the past year.

Ireland-based PageFair found 419 million mobile users are using the technology. Though the vast majority of this activity is occurring is Asia, interest is on the rise in the U.S. and Europe. And advertisers are noting the trend with alarm.

"Now is the time for advertising professionals and marketers to take a hard look at ourselves to understand why consumers are not responding to these types of ads, and figure out how we can correct the issue to better engage with the consumers we're trying to reach," said Nancy Hill, head of the American Association of Advertising Agencies, in a press release.

Ad blocking could be especially problematic for traditional media companies such as newspapers that have become increasingly dependent on digital ads in recent years as their print business withers.

Since March, New York Times Co. (NYT), which has navigated the digital transformation better than many of its rivals, has been experimenting with several approaches to combat ad blockers, including the use of white lists, according to Danielle Rhoades Ha, a company spokesperson.

"Our goal with this testing is to inform users of the harm of ad blocking and to encourage white-listing of nytimes.com," she said. "We plan to test various options if users decline to white-list the site."

New York Times CEO Mark Thompson is due to speak about the issue at a conference sponsored by the Interactive Advertising Bureau next week. Top executives at The Washington Post, Forbes and CBS (CBS) Interactive, the corporate parent of CBSNews.com, are also expected to address the conference. Both the Post and Forbes try to explain to ad block users why the software is harming their businesses.

"People on the Internet don't remember or realize that they're getting amazing content for free," said the IAB's Gombert.

But that's not capping interest in the technology. A recent Midia Research survey of 3,600 people in the U.S., Latin America and Europe found that 41 percent of those surveyed knew about ad blockers, and of that group, 80 percent blocked ads on desktops and 46 percent blocked them on smartphones.

"The notion of ad blocking is here to stay," Gombert said.

View CBS News In