Google is the internet’s largest ad company. So why is it building an ad blocker?

Where technology and economics collide

Google has a plan to protect users of its market-leading Chrome web browsers from intrusive ads. It’s a plan that could make the web browsing experience better for tens of millions of people. But it could also raise thorny questions about Google’s growing market power.

“It’s far too common that people encounter annoying, intrusive ads on the web,” writes Sridhar Ramaswamy in a Thursday blog post, “like the kind that blare music unexpectedly, or force you to wait 10 seconds before you can see the content on the page.”

The new Chrome feature, slated to be rolled out next year, won’t block all ads. Rather, it will block ads that Google considers particularly intrusive. Google is publishing guidelines to help site owners understand which ads are likely to be blocked. The company hopes that most publishers will drop the most annoying ad formats from their sites, improving the browsing experience for everyone without many ads actually being blocked.

This is something Google CEO Larry Page has been thinking about for years. “The industry needs to do better at producing ads that are less annoying and that are quicker to load,” he said in 2015. “I think we need to do a better job of that as an industry.”

The tricky issue here is that in addition to having the internet’s most popular web browser, Google is also one of the biggest companies in the advertising business. And that creates a danger that it could use its power in the browser market to give itself a leg up in the ad market.

“Google has a lot of power,” says Mark Patterson, a Fordham legal scholar who has written a book on antitrust in the internet age. “This is dictating what sort of ads will be permitted if you use Chrome.” And given Chrome’s popularity, those rules are likely to become de facto standards across the web.

Patterson worries about a private company having so much power over the kinds of ads that appear online. But he doesn’t think Google has much to worry about on the regulatory front.

“It’s hard to see a court getting really agitated about Google trying to eliminate annoying ads,” he says. “Annoying ads are annoying. Any effort to get rid of them could be seen as a good thing.”

Antitrust officials are likely to decide they have bigger issues to worry about, Patterson predicts.

Google is trying to use its clout to squash intrusive ads

For years, Google has tried to use its influence to raise standards across the web. For example, pages that have more ads than content at the top automatically get downgraded in Google search results. Google has long penalized websites that load too slowly. More recently, it has started giving preference in search results to sites that use the secure SSL encryption standard.

In the short run, these policies help Google’s users find sites that are fast-loading, secure, and not cluttered with ads. But more significant is the incentive it creates for online publishers. Almost all websites want to maximize their ranking in Google search results, so rewarding sites that deliver a better user experience gives site operators a stronger incentive to improve their sites.

Chrome’s market share has grown in recent years to reach a majority of the desktop market. Which means that Google’s browser now has the same kind of powerful influence that its search engine has long enjoyed. And so it’s pursuing the same strategy: rolling out a new feature that will protect Chrome users from intrusive ads in the short run, while giving online publishers a powerful incentive to stop using intrusive ads altogether.

And that incentive will be powerful. About half of web users are on Chrome, and most of them will accept the default configuration of Chrome. So any publisher that refuses to comply with Google’s ad quality standards could suddenly see a large fraction of its ads blocked, with devastating effects on its ad revenue. So we can expect publishers to scramble to comply with Google’s requirements in the coming months.

Google is making a preemptive strike against third-party ad blockers

Google is clearly worried about the potential antitrust implications here. The company has joined a broad advertising group called the Coalition for Better Ads that played a key role in drafting the ad quality standards Google will be enforcing. The goal is to position these rules as reflecting widely accepted industry standards rather than Google’s idiosyncratic priorities.

Essentially, Patterson says, “it’s a cartel orchestrated by Google.” Publishers and ad networks that are already enforcing high standards have every reason to want spammier ad networks driven off the web.

And one common challenge shared by Google and other advertisers is the rise of third-party ad blockers. Google’s new feature won’t block all ads, just ads Google and its partners consider bad. In contrast, competing products like AdBlock Plus have the ability to block ads altogether — including Google’s.

Eyeo, the company behind AdBlock Plus, has a program that’s somewhat like the one Google announced this week. The company has published a list of criteria for “acceptable ads,” and publishers that meet the criteria can apply to be on a whitelist. Inclusion on the list is free for smaller sites, but larger sites have to pay Eyeo to be included.

A relatively new browser called Brave has a similar business model. It blocks third-party ads, replaces them with its own ads, and offers sites a share of the resulting revenue. Needless to say, publishers and ad networks don’t like this at all.

Banishing the worst ads from the web will reduce user interest in third-party ad blockers that block everyone’s ads. That will discourage other companies from trying to capitalize on user dissatisfaction to get a cut of companies’ ad revenue. And that would be good for Google’s bottom line.

Sourse: vox.com