Ad-Blocking Companies Fire Back at NAA FTC Complaint

"The only part of [NAA's] press release that resembles reality is the part about ad blocking being a statement of consumer dissatisfaction with an ad industry that has spied on them, deceived them and, most of all, annoyed them with intrusive ads for years," Germany-based Eyeo said in an emailed statement Friday. It said NAA is misconstruing the company's "Acceptable Ads" initiative, which it described as "an innovative, nuanced approach to ad blocking" that was offered as a compromise between users and publishers over the past five years.

"We clearly understand that ad blocking is responding to consumer frustration and everybody needs to work and improve the ecosystem in how ads are delivered," said Paul Boyle, NAA senior vice president-public policy, in an interview. He said the companies are delivering the ad-blocking services to "entice" customers and then are trying to figure out their business model. The FTC needs to scrutinize "how the consumer is being taken advantage of with the growth of ad blocking" and any potentially related privacy issues, said Boyle. But he said NAA isn't asking for guidelines. An FTC spokesman emailed that the commission received NAA's complaint filed Thursday but couldn't comment beyond that.

Boyle said large advertisers pay to be on Adblock Plus' white-listing program, which, based on certain criteria, accepts quality ads that can then be delivered through the ad-blocking software. But he said Eyeo alone determines what's acceptable, and even an advertiser that has an acceptable ad but doesn't pay would be blocked, something that he said is akin to a "shakedown." In its email, Eyeo, which said it has nothing to hide, provided links to how the initiative works that also spell out the criteria for ads that would be permitted on the white list. "No ad can be whitelisted without meeting those criteria, and users can always turn off Acceptable Ads and block all ads if they so choose," Eyeo said. "The rest of the statements from the NAA are apparently directed at other ad blockers; however, for the part that seems to misunderstand what we do at Eyeo, we have nothing to hide."

​Optimal CEO Rob Leathern would "love the opportunity" to talk to the FTC about deceptive trade practices in online ad and third-party companies that "unwittingly" distribute malware -- issues that the commission should focus on more, he said in a Friday interview. "I honestly don’t have a problem with discussing our plans or business model further." Leathern worked in online ads for a decade, including stints at LinkedIn and NexTag.

Optimal doesn't offer ad-blocking software -- which Boyle disputed -- but Leathern said the company is the first to provide an ad-blocking mechanism that helps reimburse publishers for lost revenue from blocked promotions. Users can pay Optimal a flat $5.99 monthly subscription fee, of which 70 percent is shared with publishers, he said. He didn't provide any statistics about his service, except it's in a beta test that has been out for about a month and has "a small number" of users. But he said Optimal is "very clear" about how the revenue is distributed and has "the most transparent product out there."

Boyle said Optimal implies to consumers that publishers are "made whole" or given some share that would replace lost revenue from ad-blocking services. He said "there's no evidence that the subscription approach" would replace millions of dollars lost from ad blocking. He said Optimal like others is trying to develop a business model after offering ad-blocking services, but instead should be working with publishers to solve the problem. He couldn't provide a figure of lost ad revenue but said that anecdotally publishers lose about 10-20 percent of sales through ad blockers -- mostly on desktop computers and a smaller amount through mobile. Optimal forecast in a recent blog post that ad blocking could cost U.S. media owners $12.1 billion in commercial revenue by 2020.

Through its browser and mobile apps, Boyle said Brave Solutions is stripping publishers of their ads and replacing them with their own ads, which raises intellectual property issues and potentially violates trademarks. He said the company has met with publishers to explain its technology. Boyle said another problem with ad blockers is that it's hard for publishers to figure out which consumers are blocking ads. In this way, publishers are prevented from making offers to consumers such as a subscription in exchange for ad-free content.

"NAA would like to have the FTC believe it is acting in favor of 'the customer experience' by attacking adblockers," emailed Brave Software CEO Brendan Eich. "Users voted long ago against the miserable experience of excessive ads and malvertising served to them via NAA members and chose to defend themselves with adblockers." He said his company will "display fewer and better ads that don't spy on users and that don't infect them with malware."

Brave also will donate up to 70 percent of profit to publishers, a higher share than they now receive, Eich said. He called it a "win-win" for users and publishers. He said the company's technology is aimed at fixing an ad ecosystem "that the NAA has let decay for years at the expense of users."