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The Definitive Guide: Solving the Adblock revenue loss problem

Sep 12, 2018 7:39:00 AM

Part 1: An overview of adblock revenue loss estimates and user rationale

Industry Impact:
When discussing an issue as contentious and divisive as adblock, it’s always better to look dispassionately (if possible) at the data. So first let’s look at the data regarding the impact to publishers:

  • According to MediaPost, adblocking software is estimated to have cost digital publishers over $42B in revenue in 2017.
  • In the US, adblock users represent 26% of the web using population while this number is even higher in Europe at 32%. (Pagefair)

These numbers tell the story of a significant revenue loss for publishers of all categories and sizes.

However, solving for lost revenue from adblockers is something within the publisher’s control -- unlike the revenue and control losses stemming from the continued growth of the mega platforms of Amazon, Google and Facebook.

Publishers can earn back revenue, while giving end users an acceptable ad experience that doesn’t interrupt their content consumption. Read the rest of this post and our next in the series to understand the methods available.

But before we dive into that, we’ll start off this blog series by dissecting adblocking adoption rates and the reasons why users block ads at all.

Let’s start with a snapshot of adblocking growth from 2015 to 2016 (it’s grown even further since):

  • The global desktop and mobile devices that block ads: +142 million Y/Y reaching 615 million devices (Dec 2015 - Dec 2016. Source: Pagefair)
  • Mobile global adblock usage: +108 million Y/Y reaching 380 million active devices (Dec 2015 - Dec 2016. Source: Pagefair)
  • Desktop global adblock usage: +34 million Y/Y reaching 236 million active devices (Dec 2015 - Dec 2016. Source: Pagefair)

blockthrough-adblock-revenue-recovery-pagefair-data

End user rationale:
In order to help you decide on the right path forward, let’s look at WHY users are installing adblockers. Understanding their motivations is the only way to ensure a sustainable solution to your adblock revenue loss.

The most cited reasons for adblock installation by users are as follows:

  • 30% Security: i.e. protection from viruses and malware
  • 29% Interruptive ads
  • 16% Slow site load times
  • 14% Too many ads on page

Growth in adblock use is a referendum on adtech's impact on end users. Over time, publishers and the adtech industry have created an online ad experience that threatens end user online enjoyment, safety and efficacy.  Simply put, the current state of the industry's cumulative technology bloat has forced users to vote with their adblockers and publishers suffer as a result.

It’s no surprise that when a double-digit billion dollar revenue recovery opportunity arose, a lot of solutions popped up in the market to attempt to both recover this revenue and improve the user experience to reduce the desire for adblock installation. As with any such market, there are winning and losing solutions in the adblock recovery market. In our next post, we share our thoughts on some of the pros and cons within each solution category.

Tune in, in a day or two or subscribe now to learn about the three methods of recovering adblock revenue: Adblock Recovery, Access Control, and Alternate Compensation.

Marty Kratky-Katz

Written by Marty Kratky-Katz

Co-founder & CEO at Blockthrough