One day in 2012, OkCupid, the ad-supported dating site with well over 7 million members, uncovered a puzzling problem. The site's internal ad-impression numbers weren't jibing with those of an advertiser, which were lower. OkCupid co-founder Sam Yagan recalls the brainstorming session when someone chimed in, "Well, there are ad blockers …" Bingo.
Ad blockers are free web-browser extensions that, once installed by individuals, prevent ads from appearing on every web page visited. For the millions of ad-driven sites on the web, they make dollars disappear. In fact, more than 9 percent of all online impressions in the U.S. are eaten by ad blockers, according to Israeli startup ClarityRay. Ouch.
In August 2012 OkCupid published a special notice that was inserted behind every ad position on the site. When users of ad blockers visited the site, instead of seeing white space where ads would typically appear, they saw an OkCupid banner that read, "So normally there would be an ad in this spot. But you're using an ad blocker like a boss … Here's a solution: You donate $5 to us once, and we remove all ads from the site forever."
Yagan would not disclose specific financial results from the program but claims that the banner spurred a significant share of donations--enough to put a sizable dent into the monthly sum of money lost from ad blockers across the site.
But the more valuable lesson learned was that people were willing to support the site directly with cash. "This group of people was probably the least willing to pay for anything among anyone we have," Yagan says, "but pay they did." This insight encouraged the matchmakers to launch more products that request voluntary payments, such as the Crazy Blind Date app, which asks users to make a donation if their date went well.
A Second Opinion
Paul Berry, former CTO of The Huffington Post and current founder and CEO of RebelMouse, a social content management system, likes OkCupid's ad-blocker initiative, although he doesn't think it's the solution. He believes ad-supported businesses will eventually lose out to the subscription model.
"We're in the infancy of understanding subscription models, how to build them, make them valuable and make them grow," he says. But he concedes that in the interim, OkCupid's initiative is an innovative way to recover lost revenue--just not one to build a business around.