Commentary

Ad Blocking Will Cost U.S. Publishers $12B By 2020

by Erik Sass , Staff Writer @eriksass1, May 17, 2016

With the number of people using ad-blocking software rising fast, the cost of ad-blocking to publishers is also set to jump: according to a new forecast from analytics outfit Optimal, the approximate losses in digital ad revenue will jump from $3.8 billion this year to over $12 billion by 2020.

That equals a fifth of projected digital ad revenues of $50 billion in the latter year, leaving publishers and media companies with $38 billion.

Over the same period, Optimal expects the number of U.S. Web users with ad blocking software to more than double, from 43 million this year to over 100 million four years from now.

While over half of consumers surveyed by Optimal were still unaware that ad-blocking software exists, the company points out that awareness and adoption have been rising fast, meaning there is plenty of potential growth for ad-blockers in years to come.

The report further noted that some publisher responses to ad-blocking may actually make the situation worse.

For good or ill, the publishing industry is gradually organizing itself to take on the threat of ad-blocking. Last month 17 members of the Newspaper Association of America, representing a total of around 1,200 newspapers across the U.S., signed a letter to a startup, Brave, warning that its plans for ad-blocking and replacement in its new browser are illegal.

After unveiling its open-source Web browser in January, Brave Software proposed a new business model that would include blocking publishers ads and replacing them with its own ads, while still displaying the publishers’ content on the browser and apps.

Overseas, publishers have banded together to enforce blackouts on ad-blockers in France and Sweden, while a number of U.S. publishers have tested their own bans on ad-block users, including Forbes and The New York Times.

Typically, publishers first present a message asking the visitor to disable their ad-blocking software and briefly explain the importance of ad revenues to their continued operation.

ad blocking, online publishing, research

4 comments about "Ad Blocking Will Cost U.S. Publishers $12B By 2020".

Check to receive email when comments are posted.

Henry Blaufox from Dragon360, May 17, 2016 at 5:37 p.m.
Don't bother projecting that many years out, especially with the assumption that "all else is equal," nothing will change in the way of behavior or technology along the way. Let's come back in five years and see what actually happened to ad blocking, and online advertising in general. Don't expect the reality to bear much resemblance to this financial projection five years out.
Reply

Richard Reisman from Teleshuttle Corporation, May 17, 2016 at 6 p.m.

The underlying problem is that publishers are not providing value propositions that satisfy users. There is a battle underway. I suggest a more participative, personalized approach to making content value propositions adaptively win-win will enable cooperation instead of conflict. More in my blog post at http://bit.ly/1WDdJvC.

Ari Rosenberg from Performance Pricing Holdings, LLC, May 17, 2016 at 7:36 p.m.

“Given that ad blockers are often distributed to users without charge, the increase in awareness of ad blocking will be a major adoption driver. It is possible that publisher action to curtail content to ad blocking users might actually further increase consumer awareness of online/mobile ad blocking.”

This is a big statement Erik. If true then the practices being taught and deployed to let users know why ad blocking is "bad" will create more ad blocking. But I am confused on how the reach of this messaging will grow to cause this impact when these messages, as far as I know, only get served to those who already have downloaded an ad blocker. If I have this wrong please explain because this quote above is a VERY big deal.

Jonelle Hilleary from Strategy Links LLC , June 29, 2016 at 6:36 p.m.

I have to agree with Richard Reisman on this issue. When advertisers consider the value and the annoyance factors, it becomes obvious why we arrived at this impasse.

The only ads I block are the annoying light boxes that have hidden "x" marks so you can't read the article or get rid of the ad. Who loses in that case? Everyone... I don't consume content, the writer misses out on engagement, the community misses out on discussion, and the vendor alienates the target audience.
No value, no view.

I actually don't mind retargeting ads and have clicked on software ads in the sidebars. But as a matter of principle, if you mess with my content, count me out as a customer.