Ad blocking ruled legal in Germany

April 2015

Ad Blocking is a thorny topic online. On one hand many user feel the need to block ads, as demonstrated by the sheer popularity of ad blocking extensions. On the other hand ad-blocking takes away the revenue that pays for the content that those users want to consume.
With some publishers reporting a loss of up to 40% of ad impressions to ad blockers, it is no surprise that it is a matter that has resulted in a number of law suits being launched. In Germany this week one of those cases has come to a close with the judge ruling against the claimants and asserting that users have the right to control what appears on their screen.

A little about the case

The case was brought by two German online publishers who operate three key websites between them: Zeit.de; Handelsblatt.com; and Wiwo.de . They claimed that use of ad blocking software was anti-competitive and were hoping for an injunction to prevent blockers being used on their websites.

The Hamburg Regional Court judge has ruled against that though, stating that the end user has the right to control what appears in their browser. Some press releases are hailing this as a great result for the consumer, but I am not so convinced.

Let me first say that, despite earning much of my living through display advertising, I am not entirely against the use of ad blocking software. Some ads are certainly annoying beyond that I find acceptable and at OKO we try to help our publishers find a balance between monetisation and user experience. When viewing one of the Plaintiff’s websites today I was forced to watch 18 seconds of nearly full-screen video before seeing the content. I definitely get the need.

I do though have a couple of real issues with the state of ad-blocking today:

Issue 1 – they are indiscriminate

When overly-aggressive advertising on one website leads a user to install an ad blocker it isn’t just that website that suffers. Most ad-blockers block nearly all websites by default, rather than taking the approach of just allowing the user to block the ones that they find annoying. This makes every publisher “guilty until proven innocent”. This is particularly harmful to small and independent sites that are more likely to be reliant on a narrow revenue stream.

Issue 2 – they force an arms race that punishes those that play nicely

Since the rise in popularity of ad-blockers many websites have responded by making their ads more aggressive to compensate for lost revenue. This in turn encourages more people to install ad blockers. This arms race has been driven my many big corporations who aim to preserve ad revenue over user experience. Publishers who haven’t responded by “turning up the ads” are the ones that lose out.

Issue 3 – the alternatives are not established

Many users of ad blockers will blame the business model of ad funded websites, but that model is still what supports many of the most popular destinations on the web. Small and independent publishers are again those most likely to be hit as they don’t have the resources to diversify their income streams so easily.

Programs such as Google Contributor are starting to appear, but are still in their infancy. Some of the ad-blockers also operate a white-list (sometimes free, sometimes paid) that allows sites to apply to be the exception. Even ignoring the cries of “Protection racket”, these whitelists aren’t a viable solution for every publisher as they don’t guarantee ads will not be blocked and impose restrictions that may not work for every website.