The increasing use of as blocking could cost as much as $12bn in digital advertising revenue in the US, according to a new report. Optimal.com Ad Blocking Survey and Forecast from Rob Leathern A forecast by analytics firm Optimal says more than 43 million people in the US will use an ad blocker this year, […]
The increasing use of as blocking could cost as much as $12bn in digital advertising revenue in the US, according to a new report.
A forecast by analytics firm Optimal says more than 43 million people in the US will use an ad blocker this year, taking more than $3.8bn (£2.63m) out of the digital ad industry.
At the current rate of growth, that figure will more than triple to over $12bn by 2020 when more than 100 million US web users will be blocking ads.
Optimal said its forecast suggested adblocking would reduce US digital ad revenue from a predicted $50bn in 2020 to $38bn.
The prediction will add to worries among publishers already feeling the squeeze from downward pressure on the rates they can charge for ads.
Optimal said that it has found almost half of those it surveyed were now aware that blocking ads was possible, meaning there was still significant room for more people to begin doing so.
It added: “Given that adblockers are often distributed to users without charge, the increase in awareness of adblocking will be a major adoption driver, and it is possible that publisher action to curtail content to adblocking users might actually further increase consumer awareness of online/mobile adblocking.”
The forecast also highlights Facebook’s comparative immunity to the problem, predicting just 3.2% of the company’s mobile ad revenue will be lost in 2020, equivalent to $335m.
In contrast, other publishers will see around a third of their potential ad revenue eaten by adblockers by 2020, though that will be partially offset by rises in the amount companies are prepared to pay per person with a smaller audience accepting ads.
Antti Pasila, CCO and Founder at Kiosked, commented on the findings: “With the news that ad blocking cost US media owners a staggering $12.1bn in lost revenues in 2015, it’s time the industry stops panicking, and starts thinking about how to solve the issue.
“It’s great that publishers and brands alike are now addressing it as a legitimate problem. It’s clear these companies have realised that aligning their growing business with ads is problematic with ad blocking in place. However, instead of focusing on fighting ad blockers, brands need to address the cause of the issue: Why users are turning to ad blockers in the first place.
“Publishers often put monetisation at the expense of the user, which leads them to installing ad blockers for a better viewing experience. The industry is at a tipping point, and in order to survive we must wake up and begin treating this root cause of the ad blocking issue. Publishers need to put user experience ahead of quick monetisation wins. Two key aspects of a successful ad impression include the ad actually getting seen by a user and being relevant either contextually or behaviourally. Using a transparent platform and positioning ads in key places, publishers will create a much better overall user experience and go some way to making ad blockers defunct.”
Read the full report on ad blocking in the US here
