Last Friday, as an end-of-term exam for my innovation and technology course within the Master in Management at IE Business School, I took advantage of the presence in Madrid of Manuel Caballero, the Acceptable Ads Relations Manager for Eyeo GmbH, the German company that manages online advertising blocker AdBlock Plus, to discuss this controversial and extremely interesting company’s business model.

Taking as their starting point a model based on open source code and consumer defense, my students were asked to think about the way that online advertising will develop, and what the survival chances were of a model that charged users for managing a white list of advertisers and sites prepared to use so-called acceptable ads (which is to say no animation, pop-ups, pop-unders, sound, pre-activated video, extensibles, etc.).

The students had 90 minutes to read the one and a half pages Eyeo GmbH mini-case (pdf), explore links and any other information they wanted using their laptops, and to ask questions during an open session with Manuel, who appeared 10 minutes into the exam “by surprise”. After that, three very open questions that they sent in via email.

AdBlock Plus already has more than 300 million installations around the world, and is growing quickly. It is not the only advertisement blocker on the market, but is the most successful and the only company in the sector that has a business model that goes beyond donations, and that offers some alternatives to companies that want to be seen as reasonably business friendly. The company’s customers can set the application to default and will see advertisements AdBlock Plus sees as acceptable, or can block these as well if they wish.

As far as advertisers are concerned, they must decide if they want the chance to get their message over to this segment of users, or pass on what is a growing market: in some countries and within certain demographic segments, such as the under-25s in North America, more than 40 percent of whom block ads. For websites, Adblock Plus offers the chance to reach this segment by using advertisements that are considered acceptable.

The growing popularity of AdBlock Plus has led to criticism that it is extorting advertisers, prompting legal action in Germany, and in all likelihood in France too.

I would like to thank Manuel Caballero and Till Faida, the co-founder of the company, for their help and supervision. If we must have exams, at least they can be about something interesting and current, and hopefully teach us something useful in the process…