Two things that give digital media executives nightmares: the increasing use of ad blockers and the 49 percent share of all digital ad revenue growth currently going to Google.
So with Google’s Thursday blog post confirming the 2018 release of an ad blocker for its hugely popular Chrome web browser, those executives might start experiencing full-on night terrors.
Google and Facebook dominate the digital advertising industry; the two companies reportedly accounted for 89 percent of all digital ad revenue growth in 2016. And antitrust experts and media industry leaders are concerned about any move — like next year’s ad blocker release first reported by the Wall Street Journal — that would give the tech conglomerates even more market power.
“I don’t love that Google is kind of imposing a solution through Chrome,” said David Chavern, leader of the News Media Alliance, an industry association for print and digital news organizations. “It’s sort of saying ‘Here, publishers, this the deal. Take it or leave it.’”
Google Chrome is already the most-used web browser in the U.S., with a 44.5 percent market share. According to Google, the ad blocker will be turned on by default, screening content and flagging advertisements that don’t conform to standards laid out by the industry trade group Coalition for Better Ads. (Google and Facebook are members of the CBA along with many other media companies and trade associations.)
If a website consistently violates those standards, the filter will block all ads on that website. In addition to the ad blocker, Google is introducing a tool called “Funding Choices” that will allow publishers to ask readers to either disable ad blockers or pay to view content without ads — and Google would get a cut of the payment.
“We look forward to working with the Coalition as they develop marketplace guidelines for supporting the Better Ads Standards, and are committed to working closely with the entire industry… to roll out these changes in a way that makes sense for users and the broader ad ecosystem,” Google Senior Vice President Sridhar Ramaswamy said in the blog post, citing support from industry figures like Hearst Digital Media President Troy Young.
In recent years, more and more consumers have begun using ad blockers to avoid being surveilled by advertising technology and to eliminate disruptive ads. The ad tech firm PageFair said in February that 11 percent of internet users worldwide deploy an ad blocker, and that number is expected to grow.
“We’re supportive of action as it helps to clean up the ad ecosystem and improves consumer trust,” Jason Kint, CEO of Digital Content Next, the trade group for digital media publishers like Vox Media and CBS Interactive, said in a statement to VICE News. “Separate and apart from the coalition, it must be said we continue to be deeply troubled that Google has paid to have its own ads bypass ad blockers.”
Google has been known to pay off ad blockers to whitelist its own ads.
Few people with antitrust and competition concerns expect action anytime soon from the Federal Trade Commission, the pertinent antitrust enforcement agency. Instead, they’re largely resigned to the relatively pro-Google perspective of Maureen Ohlhausen, the acting FTC chairman appointed by President Trump in January.
“Google will serve as the prosecutor, judge, and jury for ad quality while maintaining a huge financial stake in the outcome,” Jonathan Kanter, an antitrust lawyer at the firm Paul, Weiss who has represented Google rivals, said of the antitrust problem posed by the ad blocker. “Google is testing the will of U.S. antitrust enforcers, and so far it is working.”
But Scott Cleland, a business consultant and longtime critic of Google who has testified before Congress about tech and antitrust more than a dozen times (and has previously taken funding from Google competitors), says that regulatory action may come from elsewhere in part because the ad blocker “gives Google the power to turn off the oxygen to their competitors.”
That could help trigger a Justice Department investigation into Google, according to Cleland, because the DOJ Antitrust Division has tools and purview that the FTC doesn’t. And he believes that the recent congressional testimony of Trump’s pick to head up the antitrust division, Makan Delrahim, indicates an appetite for this kind of case.