Ad Blocking Is Disrupting the Online Advertising Ecosystem

Ad Blocking Disrupting Online Advertising Ecosystem

Internet Advertising and Publishing Business Losing Billions to Ad Blocking Software as Consumers Shun Ads

NEW YORK, NY — The use of ad blocking software grew by 48% in the last 12 months to more than 45 million monthly active users, or approximately 16% of the U.S. online population, according to the latest report from PageFair and Adobe. In Europe, ad blocking grew by 35% during the same period to 77 million monthly active users. The report estimates more than $21 billion in advertising revenues will be lost in 2015 due to ad blocking, and its forecasts to jump to more than $41 billion worldwide by 2016.

The joint report, The Cost of Ad Blocking, details the global state of ad blocking and what its rapid growth means for the future of the Internet publishing and advertising industries. It finds that the number of ad block users worldwide has increased by 41% in the past 12 months. There are now 198 million monthly active ad block users.

“It is tragic that ad block users are inadvertently inflicting multi-billion dollar losses on the very websites they most enjoy. With ad blocking going mobile, there’s an eminent threat that the business model that has supported the open web for two decades is going to collapse. PageFair is working with thousands of publishers to securely display user-friendly advertising and keep free websites in business. I hope this report will prompt more editors, website owners, and publishers to join with us to combat the problem”, said PageFair CEO and co-founder Sean Blanchfield.

PageFair has tracked the growth of ad blocking for three years, and measures over a billion ad blocking hits every month across its 3,000+ client websites to determine the types of content most affected. With many websites impacted with up to 27% lost ad inventory, ad blocking now poses an existential threat for the future of free content on the Internet.

“By working with PageFair, our goal with this research is to shed light on the effects of ad blocking so the industry can develop better solutions for content publishers, advertisers and consumers alike,” said Campbell Foster, director of product marketing for Video Solutions at Adobe.

The report further explains that ad blocking, which has been concentrated on desktop browsers, is now spreading to mobile in Asia. This trend will likely accelerate globally in September when the ability to block ads is introduced into Apple’s iOS.

Another recent study found that one in ten people were actively blocking advertising even before Apple’s latest iOS update. Sourcepoint’s study, The State of Ad Blocking, looks at the adoption rate of ad blockers on desktops and mobile devices. Sourcepoint’s study, which was developed with comScore, found that ad blocking software is rapidly gaining traction among higher income Millennials. The demographic differs slightly in the United States where ad blocker usage on desktops is a bit higher among 45-54 and 55-64 year olds, than among those between 35-44 years of age.

The combination of ad blocking, fraud and ongoing issues with viewability has placed the online advertising ecosystem in disarray. Consumers are actively filter out unwanted content through mental firewalls, banner blindness, and by increasing their use of ad-blocking software. It’s difficult to imagine any advertiser having full confidence in online advertising until all of its issues are completely resolved. Could all of this translate into a larger opportunity for digital out-of-home advertising space?

Editor’s Update—June 23, 2016—New data from eMarketer and PageFair show that consumers use of ad-blocking software is accelerating. Nearly 70 million Americans will use ad-blocking software in 2016, representing about 26% of all U.S. Internet users, according to eMarketer. In 2017, eMarketer is forecasting that more than 86 million Americans, or 32% of all U.S. Internet users, will block online ads. Approximately 22% of the world’s 1.9bn smartphone users, roughly 419 million people worldwide, currently block advertising on their mobile devices, according to PageFair’s 2016 Moble Adblocking Report. Both mobile web and in-app ads can now be blocked, which calls in question mobile advertising’s long-term effectiveness. Another thing to consider, while the online publishing and ad industry sees ad-blocking as a problem, consumers see it as a solution.

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