For many Internet users, closing a pop-up ad is virtually instinctive at this point, and more and more people are taking the extra step of downloading ad-blocking software to their computers. With ad-blocking software installed, display and pop-up ads are prevented from being served, and users are free to surf the Internet without watching thirty-second commercials or staring at an ad for five seconds. But what does this mean for advertisers and publishers?
Ad-blocking software prevents ads from being served; and typically, ads are paid for after they’ve been served. Advertisers, then, lose potential views, and the sites hosting the advertisements—publishers—don’t get paid. One estimate suggests that Google lost $1.86 billion in US revenue to adblocking in 2014.
Of course, many Internet users believe they have the right to an ad-free browsing experience; however, publishing sites need to make revenue, and ads are often the best way to do so. By some accounts, U.S. publishers lose an estimated 9% of ad revenue due to ad blocking, and this number can grow to as high as 26% for websites with tech-savvy readers. Worldwide, 200 million people are now regularly using ad-blocking software, and the current ad-blocking rate in the U.S. is about 15.4%—that’s 45 million people.
Until fairly recently, most ad blocking took place on computers, simply because ad blocking wasn’t readily available on mobile devices. The lack of ad-blocking software for mobile helped fuel the growth in mobile advertising, and the market grew accordingly; mobile advertising now represents about half of all digital advertising. However, with the release of iOS9, Apple has made it possible for newer Apple mobile devices to download ad-blocking web extensions. Ads can still appear in apps, however (where smartphone users spend most of their time), and Apple’s News app allows publishers to bring their own ads or let Apple itself sell the ads and split the revenue.
Check back tomorrow for three strategies publishers can use to drive higher CPMs.
To learn more about how publishers are driving value through better targeting and identity resolution, read our whitepaper, Digital Publishing: Increasing Advertiser Value Through Data and Identity.
Originally published October 22, 2015