Eyeo’s Adblock Plus: Consumer Movement or Advertising Toll Booth
Adblock was started in 2006 by Wladimir Palant. It was initially started as a hobby where
he wrote code for Mozilla Firefox Browser and called it Adblock Plus 0.6. This eventually grew
to become a big company called Eyeo GmbH. During this time, there was a less technological
advancement. The popular mode of internet browsing was the use of desktop and personal
computers. No smartphone had been launched at that time. Thus, Adblock became popular with
the desktop and PC users, where it saw 50 million downloads by mid-2009. The trend of being
popular with the desktop and PC users would come to haunt it after the shifting of the internet
market to the use of smartphones to browse. However, the company enjoys market leadership in
the ads blocking industry with 250 million people using it. It has an 11% market where it has
been installed in 615 million devices. This case will outline the company’s main problems and
issues it is facing in the market. It will also analyze its internal and external business
environments; SWOT analysis will also be used to determine strengths and opportunities and
well as its threats.
The Adblock plus is faced with various problems in in its growth strategy.
The main problem lies in how it will manoeuver the new dynamic of the internet where
the consumers are preferring to use mobile phones to access the internet rather than using
The popularity of the software is majorly with the desktop and the PC users and the least
with the mobile users.
Adblock Plus is facing the challenge of the publishers who are calling blocking of ads
illegal. They are claiming that blocking internet ads on their platforms amounts to
unethical internet actions.
Browsers have also modelled their platforms to ensure that consumers only view
acceptable ads. The current operational strategy does not address how the company will
CASE STUDY: EYEO’S ADBLOCK PLUS 3
gain popularity with mobile phone internet users. Adblock Plus should have a strategy
which will be modelled to target both desktop and smartphone internet users equally.
Monetizing its product has been a challenge as the strategy is modelled to be a consumer
movement. This should be innovated into to ensure that the company generates enough
revenue from the movement.
The competition in the market is posing great challenge for its growth. The competitors
are coming up with different product in ads blocking thus threatening the Adblock Plus
growth in the market.
The publishers were against the motives of the company to block their ads in their
platforms. This led to various lawsuits involving the company and the publishers which Adblock
plus won. The move by the company to filter and allow quality ads on the publishers’ platforms
solved much of these issues. However, this does not solve the issues completely as the opposing
side claims the ads should not be blocked at any given time. The promotional companies are still
campaigning for freedom on online ads and entirely outlaw ads blocking companies.
The monetization of the company’s product has been a problem. The revenue generation
model has not been well implemented, thus making the company change its growth strategy to
consumer movement for acceptable ads. In 2016, it generated the revenue close to $50 million.
This value can increase a monetization strategy is used on 100 million monthly active users.
Other economic factors on the company are that the company is developing other apps outside
Adblock. Through these platforms, it will be possible to generate more revenue after good
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The company had started to harmonize with the publishers in controlling ads on the
internet. With zero money going to the Adblock Plus, this association with the publishers will
guarantee consumers only view acceptable ads. Thus, the software will increase in popularity
due to its value and efficiency to the consumers. Also, the company has offices in different
countries. It will be easier to open offices in these countries and market its product to consumers.
Most of its employees were working from home, which is a cost-cutting measure in terms of rent
and office costs (Purce, 2014). Lastly, the company’s demography comprises of people aged
40yrs and below. This demography is the largest most developing markets; thus, the company
could directly market to them.
Fourthly, the technological advancement on the internet was something that was affecting
the growth of Adblock in the market. The competitors offering a similar product had doubled in
number from different countries. The advancement of technology also led to the shifting of
internet traffic from desktops to mobile phones. Majorly, the Adblock Plus consumers were
mainly desktop based. Thus, the company has not tapped the smartphone-based internet market,
which was increasing day by day. The company also enjoys a geographically diversified market.
Its product is used in China, USA, Germany and most European countries that are
technologically advanced. The technological advancement around many developing countries
presents growth potential for the company.
Adblock Plus is facing various issues in the macro-environment. The entry of competitors
who majored in making better ads blocking software in the market has made it hard for Adblock
Plus to popular with smartphone users. On the other hand, large internet traffic is shifting from
using computers to using smartphones. This is a bad spell for the future of the company. Also, a
lack of a good revenue generation model may make it difficult to finance future operations. The
consumer movement has not been welcomed by the publishers and promotion companies. This
clash of interest may also become an obstacle for the company's growth and to keep it running.
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Porter 5 forces and Competitors
Using Porter 5 forces and Competitors Analysis show that the company faces equal
strengths and weaknesses in the market. It has strength over the bargaining power of suppliers
since it selling a service that it has solely developed. There is threat of the new entrants is very
high since they are introducing product that the smartphone users. The ads blocking industry is
also an open one with no barriers. The company does not have an advantage on the bargaining
power of the buyers as there exists multiple products in the market that are different prices. This
also poses threat of substitutes in the market which is very high. The internet browser
companies have produced a similar product for its clients. Lastly, the company has competitive
rivalry advantage in the market due to its popularity. It enjoys the advantage of the first entry
thus it very trusted by consumers in the market.
The internal analysis will be analyzed based on the value chain and the VRIN of the
Adblock Plus. The integration of the two aspects gives the strength of the company’s primary
activities and the support activities. The primary activities can be analyzed from the time the
company was started. The growth of internet usage was one of the best developments of
technology in the early 2000s. Increase of the number of online publishers and the social media
platforms was an attraction to people and corporations. However, every person using the internet
had a different motive. Corporations saw an increase of traffic using the internet for browsing,
socialization through Facebook, Twitter and Instagram and learning as a potential market for
The companies using the internet to run their ads were growing day in day out. The
internet marketing valuation was increasing in three folds. Increase of ads on the various
platforms which users visited reduced the user experience. Additionally, the ads were run
without the users’ permission. Initially, the users never had authority over the ads neither did
they have the power to mute them. The Adblock Plus introduced software which allowed internet
users not to mute the ads. The popularity of the software grew within the first decade to reach 1
billion downloads within the first decade of operation. This was majorly contributed by the value
which the consumers were deriving from the software.
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Adblock Plus started offering ads blocking services when no such services available in
the market. Initially, consumers using the software enjoyed zero ads while they are using the
internet. This was a value they could not get from any other software. Thus, the services were
both valuable and rare in the eyes of the consumers in the market.
The Adblock Plus offered a product that was not substitutable in the market. Despite
offering to block all internet on the publishers’ website, the company introduced a whitelist
section which contained ads that attained the certain standard. This was a service that was not
available in the market as it ensured that consumers only viewed the desired ads. Poor and
blacklisted ads could not find their way to consumers. This gave the Adblock Plus a growth
potential in the market. This service made the company harmonize with the publishers as they
could ensure that only quality ads were accessible in their platforms. Thus, the product was
delivering value to both the publishers and the consumers (Mazzei & Noble, 2017). The
campaign for better ads was well received by the consumers who had control over the ads they
should view while using the internet.
The strengths of Adblock Plus include joining hands with the publishers to ensure that the
consumers view acceptable ads. It also enjoys a market leadership of more than 50%. Lastly, the
company has the best developed other platforms will ensure consumers have maximum control
over online ads.
The company has a weakness in finding the best revenue generation model. It is also not
quickly advancing with technology to capture smartphone internet users. Also, the company does
not have an active research and development team to ensure it models its products according to
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Various opportunities are existing for the Adblock Plus. It only enjoys 1% smartphone
market in various markets such as China, Germany and the USA. A good marketing campaign in
these markets will lead to an increase in market share. It has also not done marketing to
popularize whitelist segment. Monetizing the section is an opportunity for the company to grow.
The company is facing various threats in the market. The competition is very high in the
market as companies are targeting smartphone users. The lawsuits from publishers are also a
threat to its growth. Lastly, browser companies are coding their software ad introduces the
internet blocking service.
The company needs to diversify and create other various software which will ensure that
they are moving with technology. This software will include a smartphone-based software which
will increase value to the consumers. This will be serving as an advantage to the company since
it will ensure that it manages to increase its smartphone user market, which is very small. The
new software will then be used to promote the flagship software; Adblocker. It will amount to
the change of the change of the corporate strategy which is important for growth of the business
in the market (Babafemi, 2015). Consumers will have an increased trust on the new product form