How Ad Blockers are changing the Advertising Game!

Why adblocking is bad

Four days ago the marketing and advertising world was taken back by Apple’s Approval of been choice; an App That Blocks Native Ads, Including Ads in Apple News, Facebook, Google, Yahoo, and almost any application known to both mobile and desktop users, leaving only two survivors to enjoy the virtues of advertising, Twitter and Youtube.

The founders of the application explained it’s functionality for Techcrunch, the application basically utilizes a VPN service as a portal for all the traffic to go through, and eliminates ads in the process as users browse clean websites and applications.

Although Apple removed the application from it’s store for an invasion of customers privacy, the app will be back in the itunes store after modification, as the founder of Been co-founder Dave Yoon mentioned in his email to the Business insider " We will remove this capability to block ads in Facebook, Yahoo, Yahoo Finance, Google, and Pinterest tonight and resubmit tomorrow morning for expedited approval. The ad and tracker blocking in other apps will not be impacted."

Yes, Advertisers And Publishers Do Have A Reason To Freak Out!

The past couple of days signaled the beginning of a long anticipated threat, the day mobile ad blocking applications see light. It’s not really a controversy about the Been choice app itself, it’s on the disruptive effect of such new technologies on digital marketing practices.

The Impact Of Ad Blockers

Although many parties argued that the impact of Ad blockers will not be that disastrous, and constantly reminded publishers and advertisers not to freak out, or consider it the new MobileGeddon, such as Ubs analysts who announced that “ The impact of the introduction of ad blocking on iPhones and iPads on global digital advertising revenues will "only" be $1 billion”,but to many others that’s not the case. After all None of the previously existing ad blockers operated on mobile, let alone were able to block native Ads, or in app advertising.

Online Behavior Statistics And Numbers That Will Make Marketers Reconsider Things!

According to the cost of ad blocking PageFair and Adobe 2015 Ad Blocking Report:

  • Publishers are actually estimated to lose nearly $22 billion during 2015
  • There are now 198 million active adblock users around the world.
  • Ad blocking usage grew by 41% globally in the last 12 months.
  • US ad blocking grew by 48% to reach 45 million active users in 12 months (up to June 2015).
  • UK ad blocking grew by 82% to reach 12 million active users in 12 months (up to June 2015).

The report offers a concise argument, predicting the consistency and the growth of the current consumer trend, and adoption of the concept of ad blockers, for both desktop and mobiles, and here are some of the takeaways:

According to the report, the estimated loss of global revenue due to blocked advertising during 2015 was $21.8 Billion. On another note in 2014, Emarketer published a Report predicting Advertisers to Spend Nearly $600 Billion Worldwide in 2015, with the digital’s share of total advertising reaching 33.5%, that’s $201 Billion (Estimated). A loss of 21.8 Billion of revenue is a 9.1% of overall advertising spending budgets, and 2015 is not even over yet, and Ad blocking application adoption is nowhere around diminishing!

ad blocking growth

Ad Blocking Growth And Penetration Is Now A Global Trend:

According to the Pagefair report, Usage of ad blockers in the United States grew by 48% during the past year, increasing to 45 million average monthly active users in Q2 2015, and grew in Europe by 35% during the past year, increasing to 77 million monthly active users in Q2 2015. The Ad blocking growth isn’t stopping there, the whole world is catching up with the trend.

The Image below is exhibits the global Ad blocking penetration 2015.

ad blocking penetration

The Cost of Blocking Ads:

According to the report, ad blocking is estimated to cost over $21B in 2015 which is 14% of the global ad spend with only 198 million monthly active users ( that’s 6% only of the internet global population), and $41.4 billion cost by 2016.

cost of ad blocking
So, Is It Just The Advertising Industry That Needs To Worry?

Simply NO, because this trend will not only affect advertising companies, but will reach all industries, but with different variations:

Ad Blocking Apps Are Not Something New, So What Changed?

Many things changed in the last couple of years, mainly:

  • A technical setup is no longer required for ad blockers, users either install an app, or a browser extension. That’s it.
  • Ad blocking applications didn’t use to affect native ads
  • Ad Blocking apps didn’t Block in-app Advertisements, or mobile websites.
  • Users are now getting benefits and value in exchange for their information ( eg: Been choice app offered users money and gifts in exchange for their data). Hence, users are now motivated to use ad blocking apps.

The report assumes that “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”

mobile ad blockers

Interactive Advertising Bureau President-CEO Randall Rothenberg wrote in his recent Ad Age op-ed, "Ad blocking: the unnecessary Internet apocalypse." "Some websites, particularly those with millennial audiences, are already losing up to 40% of their ad revenue because of ad blocking,"

Why Should Websites And Mobile Users Care?

Regardless of the many reason users have to download ad blocking apps (whether desktop or mobile apps) mainly revolving around security and sharing data concerns, many users aren’t aware of the aftereffect of the increased usage, and growth of Ad blocking applications.

In a world where most websites and applications depend solely on monetizing their website traffic and display advertising, if such websites failed to earn revenue due to any reason, ( Say perhaps the growth of ad blockers), users will no longer have access to free content, or free membership. A company called Advertising Age actually did the math, and here's a simple demonstration of how much some websites will cost users without online Ads:

Ad blockers are evil

And that’s just a mere glimpse of what the aftermath of the growth of Ad blocking would look like, not to mention the millions of jobs in the advertising industry that will be jeopardized by such a change.

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