Global Ad Blocking Growth Resulted in an Estimated Loss of $21.8 Billion in Global Advertising Revenue [Report]
A PageFair and Adobe report estimates $21.8bn in advertising revenues was lost in 2015 due to ad blocking and the number of ad block users has increased by 41%.
The third annual ad blocking report, brought to fruition by Adobe and PageFair, revealed some startling numbers about the growth of the ad blocking industry and the effects that ad blocking adoption rates have had on the global advertising revenue.
Advertising is still the primary source of revenue for a large majority of online businesses, but over the years consumers have grown increasingly susceptible to ads and certain security threats posed by online ads. This has directly led to the increase in adoption rates of ad blocking software.
Some startling facts from the report
- The number of people using ad blocking software grew by 41% year over year, globally. This is for the period Q2 2014 – Q2 2015.
- About 16% of the US online population blocked ads during Q2 2015.
- In Q2 2015 the average monthly active users (MAUs) of ad blocking software in the US grew by 48% to reach a staggering figure of 45 million.
- In Q2 2015 the average MAUs of ad blocking software in Europe grew by 35%. This now means that Europe has 77 million MAUs of ad blocking software.
- 16% of all Firefox users on mobile block ads.
- The ad blocking industry’s growth has meant that the online advertising industry suffered an estimated loss of $21.8 billion in global advertising revenue during 2015.
The most important figures among all of the above is the one concerning global advertising revenue. While many will argue that the ad blocking industry is nowhere close to the global advertising industry, there are a few very interesting conflict of interests that may eventually come to light one day, causing a great deal of trouble for both industries.
Are these two industries cannibalistic in nature?
So now we have enough indicators to suggest that the increase in adoption rates for ad blocking software is hurting the global advertising revenue. But what about the big picture? How will this surge in ad blocking software adoption rates eventually effect online advertising?
The report indicates that as of June 2015 there are 198 million MAUs of major ad blocking browser extensions. And even though these 198 million MAUs represent only 6% of the global internet population, the fact is there wasn’t really a percentage available for consideration a couple of years ago.
But as this percentage increases, and chances are that it will increase rather quickly, the advertising space will begin to see its market getting badly effected. The rise in the ad blocking industry’s revenue directly proportional to the decline in global advertising revenue. However, if the advertising behemoths such as Google and its partners were able to find solutions that compel advertisers to toe the line of cautionary advertising guidelines or face the wrath of search engines, things could go downhill for the ad blocking industry. Essentially if the ad blocking industry grows big enough to seriously threaten the global advertising industry’s existence, the two industry would end up cannibalizing each other’s markets even though they are two separate industries altogether.
While this situation may eventually effect the businesses of these two industries there is a third party involved whose interests are equally at stake. This third party of course are the consumers. Consumers should have the right to choose how much, if any, advertising they wish to see on websites. This is why the ad blocking industry is blossoming, but the problem is if every consumer ever blocked all advertising online all online businesses would go bankrupt and inadvertently the consumers would have harmed the online properties that they care about.
In the wake of these affairs it remains to be seen what kind of solutions come to the fore. We can only hope that those solutions keep in mind the collective interests of all three parties.