The Ad Blocking Cost

Ad blocking cost
Ad blocking cost the digital publishing industries an estimated $41.4 billion
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Ad blocking cost the digital publishing industries an estimated $41.4B Last year

Ad blocking cost the digital publishing industries an estimated $41.4 billion worldwide in 2015, according to Parks Associates.

What is ad blocking?

Ad blocking extensions, browsers, VPNs or DNS solutions act like a firewall between the web browser and all known ad servers. Most ads are blocked by open-source web browser extensions, installed by end users. The database of blocked ad servers is curated by a large and active open source community.

The most popular ad block extensions are “Adblock Plus” and “Adblock”. Once installed, these extensions automatically block ads on all websites and are effective against almost all ad formats.

Parks associates report warned that consumers might increasingly use ad-blocking solutions while streaming video if the digital advertising methods disrupt their viewing experience.

Parks Associates’ digital media analysts advise service providers and media companies that the best defense against these ad blockers is to develop digital advertising models that are integrated and non-disruptive to the viewing experience. “Many content creators rely on advertising revenue to monetize video, especially as newly launched digital services seek revenue. As digital video viewership increases on all screens, use of ad-blocking technologies is a concern for content owners and distributors.

Ad blockers have their roots in web publishing, often to prevent full-page overlays or popups that would disrupt the experience. As internet video viewership on the television screen increases, advertisers are seeking to leverage prime living room real estate in this new media model. Content and OTT providers and advertisers need to ensure their methods do not interfere with the viewing experience, which would otherwise drive viewers to ad-blocking technologies,” said Parks Associates research analyst Glenn Hower.

Parks Associates forecasts total digital video advertising revenue increasing from $14.4 billion worldwide in 2016 to $28.9 billion in 2020, leading to a five-year CAGR of 15%.

Additional research from the study includes:

  • Ad blocking cost the digital publishing industries an estimated $41.4 billion worldwide in 2015.
  • Internet video viewership increased by a five-year CAGR of over 18% from 2010 to 2015.
  • The total number of OTT video services has tripled from 2010 to 2015.

Mobile will facilitate future ad blocking growth

Although a large portion of online browsing is performed from mobile devices, mobile ad blocking is still very underdeveloped. The release of iOS 9 in the Fall of 2015 may be a game changer, as it will allow users to easily install ad blocking from the App Store.

The Adblock Plus app, which can be manually installed on Android devices, enables users to block ads within Chrome. The Firefox mobile browser, which is available directly from Google Play, allows users to install ad blocking extensions.

The findings

  • In Q2 2015, mobile accounted for 38% of all web browsing but only 1.6% of ad block traffic.
  • During Q2 2015, 40% of mobile ad blocking comes from Firefox users who had installed an extension to block ads.
  • In June 2015, 16% of Firefox users on Android had configured ad blocking from within their browser settings

The bottom line

As technology develops and ad blocking plug-ins become more commonplace, the growth in ad blocking usage will receive yet another catalyst. This has the potential to challenge the viability of the web as a platform for the distribution of free ad-supported content.

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