Advertisements have become an integral part of many online businesses today. Ads act as a fixed source of revenue for almost all the major content driven websites. However, rising security concerns, high volumes of data usage and annoyance caused by the sheer number of ads has led to the growing adoption of ad blocks. This is a major setback to the revenue pool of big corporate houses as well as the smaller ones. As stated by the latest report jointly released by Adobe and PageFair on ad blocking, titled The Cost of Ad Blocking 2015, an estimated $22 billion potential advertising revenue is to be lost in 2015 owing to the increased sense of ad blocking among the users. This is a 41% increase over the numbers last year.
The historic data shows that since 2013, ad blocking has seen an unprecedented rise in the number of monthly active users. From 54 million in 2013, it rose to 121 million in 2014 and it stood high at 181 million in June 2015. This trend boldly represents the resentment of users for the unwanted ad that often distract them from the primary job. In the USA alone, 48 million active monthly users were recorded blocking ads in Q2 2015, which is a 48% rise over the last year. Oregon clocked the highest rate of ad blocking at 16.4% while Washington DC had the lowest of 8.2%.
Europe had a slightly lower growth with 35% increase and had a total of 77 million monthly active users. Among the European nations, the UK had the highest growth of 82% YOY. Greece, which has the largest share in internet usage in Europe, also had the highest rate of ad blocks.
The loss in revenue due to blocked ads increased by 86.3% YoY and amounted to a whopping $21.8 billion in 2015. The losses are expected to double by the end of next year. Almost 14% of the global ad spend was lost due to ad blocks worldwide. This was brought in by a mere 6% of the global internet users going for ad blocks.
In the US, an increase of 84.5% was recorded in the losses YoY in the last one year. The absolute amount stood at $10.7 billion. The losses amounted to 18.3% of the total ad spending in the US; Adobe estimates that this number will rise to 30% by 2016. Given that the US alone accounts for 40% of global ad spend, it is quite clear that the global ad earnings are sure to experience a great dip in the recent years. Also, the loss due to ad blocks in 2016 for the US alone is predicted to be equal to the present global loss. This is sure to add a great weight to the global loss scenario.
Adoption of Ad Blocks: Desktop vs Mobile Browsers
Chrome was the browser with a maximum of 126 million monthly active users who went for ad blocks. Also, it had the largest YoY increase of 51%. Mozilla Firefox and Safari followed with a count of 48 and 9 million monthly active users going for ad blocks. For the last few years, Chrome has been closing the gap with Microsoft IE. According to Netmarketshare, between July 2013 and 2015, Chrome’s market share has increased from 17.7% to 22%. One of the major reasons for the growth of ad block on Chrome was due to the increased ease of installing such software on the browser. It is quite surprising to notice that Google, whose 90% of revenue came from advertising in Q2 2015, is used by the largest number of users for ad blocking.
A major part of browsing is through mobile devices which account for 38% of global traffic. In spite of this fact, only 1.6% of ad blocks are from mobile browsers. Chrome has the best ad block facility (AdBlock plus app) in place which accounts for 53% of ad blocks across all mobile browsers. Firefox followed with 40% share of total ad blocks. Apple iOS 9 has provided better ad block facilities and it is estimated that Safari will see a rise in the ad blocks by the end of this year.
One of the primary concerns of users behind blocking ads has been privacy. Almost 50% of users cited this reason for blocking ads. Several big players in this market like Electronic Frontier Foundation, AdBlock and Disconnect are of the view that they might be ready to suspend ad-blocking if publishers abide by the Do Not Track policy. Campbell Foster, Adobe’s director of product marketing, made the point that users prefer to draw the line when ads get annoying, intrusive or creepy. Blanchfield is of the opinion that publishers should learn to respect the sentiments of the users and refrain from force-feeding of unwanted content. The worldwide scenario is set for a makeover and ad blocks are going to be more prominent across all platforms and browsers alike. Under such circumstances, the online publishers will have to rethink their business models as the ad revenue is set to experience a strong blow.