There is some evidence of rising advertising density in recent years, both on TV and on the web (if page load times are any indication), which may be a response to the way that ad-avoidance technologies have changed the profile of the audience for these forms of media. This may help explain the rise in ads broadcast in the United States over recent years. Greater penetration may cause content providers to raise advertising clutter – not to recoup lost revenues per se, but because marginal ad-viewers are less sensitive to ads. This changes the math for media companies: they can now include even more ads, secure in the knowledge that fewer remaining customers will be chased away by each one. Once ad blocking is adopted by part of the audience, the remaining audience members are presumably more stoic about ads. The authors term this "platform siphoning" because some consumers are siphoning off the desired media content without viewing the ads that support it. If an ad-avoidance technology is introduced, the most irritated consumers have incentive to invest in the technology even if it there is a large upfront cost. So media companies have incentive to ramp up their ad activity even if it drives away some customers because the additional ad revenue can make up for the loss of customers.Ĭompanies want to pack as many ads in as they can, up until the point where the next ad will not make enough money to compensate for the customers it drives away. In the author’s model, media companies make money off of each ad they sell, and their revenue is proportional to the size of their audience. In Platform Siphoning: Ad-Avoidance and Media Content ( PDF), authors Simon Anderson and Joshua Gans build a model to study what happens when a new ad-avoidance technology gains traction with media consumers. An article appearing in the American Economic Journal: Microeconomics considered the economics of ad avoidance back in 2011. But technology to circumvent ads is nothing new: ever since the introduction of VCRs in the 1980s, media executives have been fretting that new innovations will undermine ad-supported content.
Annoying tv commercials to scrutiny from software#
The proliferation of ad-blocking software has stirred a larger debate about the ethics of ad blocking and implications for media companies that survive on ad revenue. Sure enough, ad-blocking apps rocketed to the top of the App Store in the hours after the new release.
That's because the new operating system included tools that made it easy to detect and filter out ads on mobile websites. But at least two groups weren't so thrilled about the new release: mobile advertisers and the publications who survive off them. When Apple's new mobile operating system was released on September 16, millions of iPhone users rushed to upgrade. Increasing use of ad-avoidance technologies may lead to a deluge of ads for the remaining media consumers who don’t block ads.
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