Ad Blocking Costing Websites $21B In Revenue, Report Finds - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership // Digital Business
Commentary
8/20/2015
02:05 PM
Larry Loeb
Larry Loeb
Commentary
50%
50%

Ad Blocking Costing Websites $21B In Revenue, Report Finds

A new report from PageFair and Adobe finds ad blocking software will cost websites more than $21 billion in lost revenue this year, and that's only expected to increase in 2016.

7 Hot Advances In Email Security
7 Hot Advances In Email Security
(Click image for larger view and slideshow.)

Ad blocking software is convenient for users, but is starting to cost websites billions of dollars in lost revenue, according to a new report issued by PageFair, a Dublin-based consultancy that sells ad blocking solutions, and Adobe. The study illustrates how difficult it is to support the new web-based economy with traditional advertising methods.

The company's third annual report estimates that $21.8 billion in advertising revenues will be lost in 2015 due to ad blocking. In the United States, ad blocking costs were an estimated $5.8 billion in revenue in 2014, and that number is expected to jump to $10.7 billion this year and $20.3 billion in 2016.

The global cost of ad blocking is expected to reach a total of $41.4 billion by 2016.

Globally, the number of people using ad blocking software grew by 41% year-over-year, according to the report. As of June, there were 198 million monthly active users (MAUs) across the major browser extensions that block ads.

Ad block usage in the United States grew 48% during the past year, increasing to 45 million MAUs during the second quarter of this year. PageFair also found that 16% of the US online population blocked ads during the second quarter.

(Image: nopporn suntornpasert/iStockphoto)

(Image: nopporn suntornpasert/iStockphoto)

Interestingly, PageFair also found that Oregon has the highest ad blocking rate in the United States at 16.4%, and that Washington D.C. has the lowest ad blocking rate at 8.2%.

They also estimated that ad blocker usage in Europe grew by 35% during the past year, increasing to 77 million MAUs during the second quarter.

"Although the 198 million MAUs in Q2 2015 represent only 6% of the global internet population, ad blocking is estimated to cost over $21B in 2015, which is 14% of the global ad spend," according to the Aug. 10 PageFair report.

The report also found that blocking varied by the type of website visited.

Gaming website visitors were more likely to block advertising, while visitors to health, charity, and government or legal websites were significantly less likely to block advertising.

PageFair blames Google's Chrome browser for the growth in ad blocking.

The report noted: "The ease with which ad block extensions can be installed on Google Chrome, combined with the continuing shift of internet users to Chrome for browsing, are major drivers of ad block growth."

[Read about improvements to Chrome.]

Ad block use on Chrome increased 51% from second quarter of 2014 to the second quarter of this year, averaging 126 million MAUs.

The irony of this was not lost on them. As the report states: "It is well known that Google's primary business is in online advertising; ironically, Google's own browser appears to be bringing ad blocking to the masses."

Mobile browisng has yet to significantly affect ad blocking stats. 

PageFair thinks this will change from a "very underdeveloped state" with the release of iOS 9 in the fall. Mobile Safari represents 52% of the mobile browsing market (and 14% of total web browsing). With support for ad block apps coming in iOS 9, they expect ad blocking on mobile Safari to trend toward the levels seen in the mobile version of Firefox (16% on Android) over the next year.

Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek. He has written a book on the Secure Electronic Transaction Internet ... View Full Bio
We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Page 1 / 4   >   >>
larryloeb
50%
50%
larryloeb,
User Rank: Author
8/31/2015 | 11:08:36 AM
Re: Ad Blocking
They exist because by auto-playing they can be shown to have some effect.

Marketers need numbers to justify their existence in the food chain.
progman2000
50%
50%
progman2000,
User Rank: Ninja
8/31/2015 | 10:58:26 AM
Re: Ad Blocking
True that. I've often wondered how many office internet surfers get busted by those randomly audio playing website advertisements. How they still exist boggles my mind.
larryloeb
50%
50%
larryloeb,
User Rank: Author
8/31/2015 | 10:57:31 AM
Re: Ad Blocking Costing Websites $21B In Revenue, Report Finds
@zerox

The insterstitial ads on sites like Crackle or Snag dont seem to be affected in my experience.

I wish they were, believe me.
larryloeb
50%
50%
larryloeb,
User Rank: Author
8/31/2015 | 10:55:29 AM
Re: Ad Blocking
@progman

Annoying, isn't it?
zerox203
50%
50%
zerox203,
User Rank: Ninja
8/31/2015 | 10:43:23 AM
Re: Ad Blocking Costing Websites $21B In Revenue, Report Finds
I try to avoid being too preachy, but ad-blocking always seemed to me like such a petty thing to try and stick it to the man with. Video producers, bloggers, developers, and artists all make their living off of the ads on their sites and content, and it doesn't really cost you anything to view them. I would tell my friends who proudly ad-block everything 'don't you want them to be able to keep making more videos?'

That being said, I have come around in some cases and do use ad block for some services. Some video players don't remember your place correctly when they pause for an ad, so you miss minutes of video... and when you try and rewind, you have to watch the ad again! Sorry, not sorry for blocking that. I also don't need to see the same ad dozens of times. If I'm not buying a car this year, the same ad for the same car 30 times isn't going to change anything.
progman2000
50%
50%
progman2000,
User Rank: Ninja
8/30/2015 | 6:29:54 AM
Re: Ad Blocking
Honestly, as soon as an ad starts playing music I am usually off the page, but I guess it makes little difference as the website already has my impression by then?
larryloeb
50%
50%
larryloeb,
User Rank: Author
8/27/2015 | 8:51:00 AM
Re: Oregonians
Yes, you make that choice when asked politely.

It's not shoved down your throat like many ads are today.

Advertisers really have to learn that lesson.
larryloeb
50%
50%
larryloeb,
User Rank: Author
8/27/2015 | 8:48:37 AM
Re: Ad Blocking
The ad agency reports to the advertiser.

The advertiser has to take the responsibility.

I hope they learn the lesson here. They are making people angry.
mak63
50%
50%
mak63,
User Rank: Ninja
8/26/2015 | 10:41:37 PM
Oregonians
I'm one of the 16.5% of the Oregonians who uses an ad blocker. I don't really miss any ad. I can live without them. Nonetheless, there a are a few websites that I need to disable it on a page or domain. The content on those pages are a must have for me. So, for what is worth, they ask me politely to do it, and I comply disabling the blocker.
Broadway0474
50%
50%
Broadway0474,
User Rank: Ninja
8/26/2015 | 10:00:28 PM
Re: Ad Blocking
The auto audio ads ... yes! Those are #1 on my list of most hated. They usually can be found on cheesey newspaper sites. Maybe they work because ads get credited with an engagement every time someone clicks, clicks, clicks to get the thing to mute. How else can they still be in favor? Who thinks they are a good idea? It's not even the advertiser's fault. It's their digital ad agency who has them drinking the kool-aid.
Page 1 / 4   >   >>
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
Slideshows
Flash Poll