Front Row Ventures, a student-run venture capital firm, just inadvertently engaged Google in a ad blocking battle to the tune of $25,000, and it does not look promising.
Though I did not retain much from my eleventh-grade economics class, one quote that still resonates with me is: “There is no such thing as a free lunch.” One way or another, nothing is truly free. While this idea seems intuitive, it gets convoluted and forgotten on the internet, especially in the world of ad blockers.
While you enjoy a free internet experience, those providing the content lose a bulk of their revenue due to ad-blocking services.
Ad blockers are internet plugins and browser extensions that remove content advertising on web pages. While a web page is loading, the blocker evaluates the site’s scripts and compares them against a list of sites it was built to block. It if finds any, it blocks them. Blockers may create a more ‘user-friendly’ internet. However, users do not see the effect from a corporate perspective. While you enjoy a free internet experience, those providing the content lose a bulk of their revenue due to ad-blocking services. There is no such thing as free lunch, and in the case of advertising, the internet is a zero-sum game.
Pelcro is a Montreal-based startup, introduced in the McGill X-1 Accelerator, which focuses on tracking, recovering, and measuring revenues lost to ad blockers. A large source of e-business comes from advertising. Large corporations such as Coca-Cola, Wix, and Via Rail pay companies to place their ads alongside web pages. Without users viewing ads, host sites are suffering losses, stunting their growth, making them more prone to failure. While larger businesses are able to ride out the proverbial storm, smaller businesses cannot. Pelcro comes in to remedy 30% of revenue lost to ad blockers, keeping smaller businesses afloat. Pelcro’s technology detects blockers, shuts the user out, and offers a subscription-based service for a premium no-ad experience.
Pelcro’s selling point is that they can get internet users to stop using ad blockers on host sites, redeeming revenue in the process. Unfortunately for Pelcro, Google is doing the same.
The idea was strong. The funds were weak. Front Row Ventures (FRV), a student-run venture capital firm with holdings of $600,000, invested $25,000 in Pelcro. While FRV has a plethora of applicants for their $25,000 investments, not all align with FRV’s vision. Ultimately, Pelcro’s forecasting regarding the future of web-based monetization proved its potential in the form of $25,000. While the investment seemed sound, it may have been premature. The investors did not take into consideration the possibility of being pushed out of the market by a bigger player with a more profound effect on internet users – in this case, Google.
Pelcro’s selling point is that they can get internet users to stop using ad blockers on host sites, redeeming revenue in the process. Unfortunately for Pelcro, Google is doing the same. In February, Google introduced a web browser feature that blocks ads that autoplay, engulf users’ screens, or hold users back from accessing content right away. Google’s service will incentivize users to disable their ad blockers, as a nuanced ad-blocking software will be implemented in the Chrome browser. As Klint Finley states, Google hopes ridding the web of its very worst ads might discourage Chrome users from installing more aggressive ad-blocking software that saps revenue universally. Google’s service poses a serious threat to Pelcro in the form of a larger, more reliable network that is offered for free.
Whether it be Pelcro’s more blunt operation of not allowing users to access content or Google’s more gradual vex-blocking technology, it will be interesting to see how this one plays out. Regardless of the outcome, the days of free rein on the internet seem to be coming to an end.
