Ad blocking software is relatively simple, but its ramifications for publishers and companies alike can be huge. There’s no question it makes websites more pleasant to look at, interact with and navigate, but advertising’s part in funding free websites is an often under-considered aspect. Those who make their living online warn that the future of the internet as we know it could be at stake, thanks to software that essentially strangles a site’s revenue stream; the cost of ad blocking is estimated to be in the region of $41.4 billion this year.
Even so, usage is on the rise, and eMarketer estimates that 24% of UK internet users will use ad blocking software by 2017. The projected percentage of smartphone users with adblock apps installed is lower, at around 8.8%, but this number will only grow as installation becomes simpler and awareness balloons. This will eat into the $59.67 billion mobile ad spend in 2017 - as projected by Statista. There’s no denying that ads on mobile are as, if not more, unwelcome than they are on desktop; they slow loading speeds, obstruct content and eat into data allowances. Their restriction will invariably lead to more subscription-only mobile content, though, and the future is uncertain for the large part of the web built on ad money.
When Apple gave the green light to the use of ad blockers on their iPhones last year the reaction was, in places, one of hysteria. The apps quickly shot to the top of the most-downloaded App Store charts and, of those who block ads, 28% now do so on their smartphones. Publishers enjoying a period of renewed ad revenue during the mobile boom - and before the rise of mobile ad blockers - will need to rethink their monetization strategies once again, whilst quietly hoping that ad block on mobile never becomes ubiquitous. The backlash from publishers has been fierce but largely unsuccessful. Four major German broadcasters have taken unsuccessful cases against Eyeo - the makers of AdBlock Plus - to court. The argument is that on top of hurting their businesses, ad blocking is unethical, as it allows users to consume content without ‘paying for it’ with an ad impression.
However genuine the threat from ad blockers might be to publishers, though, fear over mobile ad blocking may be misplaced. It currently doesn’t affect apps, where most smartphone users spend the majority of their time, and sandboxing should prevent it from doing so. Digital publishers will often have their own apps, with their own advertising, revenue that will be untouched by mobile ad block software. Also, according to research from AdRoll, Apple’s allowance of ad blockers has had very little effect on the amount of mobile advertising being served to users. After an initial drop-off - which, among the existing and quite pronounced ups and downs, didn’t look too anomalous - a steady rise has actually been noted.
Adam Berke, president of AdRoll, told Mashable that the hype surrounding mobile ad block was a fleeting one, and that the effort involved in installing and enabling ad blockers on mobile was simply not worth the average user’s time. The amount of users installing ad block software is currently too minimal to have a significant effect, and interest in them on mobile may genuinely be too low to be a catastrophe for publishers and advertisers.
Also, many see the rise of ad blocking more generally as a message to publishers that their revenue stream is in need of diversification anyway. Many businesses are wholly dependent on ad revenue, something Jason Knit, CEO of Digital Content Next thinks will change. ‘A natural evolution would be diversifying that revenue, and I think that ad blocking is one of those topics that just accelerates that discussion,’ he says. David McDiarmid, head of paid search ad agency DigitasLBi, takes a similar view of an industry in need of a rethink, saying: ‘We need to accept that ad blocking is part of the evolution of an ad-funded Internet… consumers are fed up with non-relevant ad content, and it wants to open up a dialogue with advertisers.’ Revenue for digital publishers is in need of change, and ad blockers are a multi-billion dollar problem. Mobile ad block’s adoption has been far from emphatic, though, so let’s not declare mobile ad revenue endangered just yet.