Are you using an ad blocker?
Of course you are, and so am I. Online ads are on the rise and can be very annoying. Thankfully, ad blockers easily allow you to block advertisements and increase the speed of browsing. But did you ever wonder what the consequences of using ad blockers are? And what about the latest developments in this industry? This 3-minute read will get you up-to-date.
The online advertising industry
Online advertising is one of the few industries that can bend on growth rates between 15-20% each year. In the past 10 years, internet advertising has seen a CAGR (compound annual growth rate) of 17%. Mobile internet advertising even shows a CAGR of 110% over the past 5 years.
The rise of ad blockers
With the rise of online advertisements, there has been a rise in the adaptation of ad blockers as well, especially in the last few years. A recent report from Adobe shows that globally around 200 million people are currently making use of ad blockers, a growth of 41% in comparison to 2014.
Graph 2: Global monthly active users that have an ad blocker
As we speak, ad blockers are mostly used on non-mobile devices. However, Apple’s newest iOS 9, which runs on iPad and iPhone, might change this trend. The new software update of Apple makes it possible to use ad blockers on both iPhones and iPads. Mobile ads seemed to be the future of advertising, but might stagnate due to this development.
Companies are missing money – a LOT of money
There are a lot of companies and content creators who are dependant of online ad revenues. Ad blockers are bad news for them. Some websites, among which Wired.com, kindly request you to whitelist their page, in order to keep their websites running. But how big is this ad-blocking problem for these companies? According to the report of Abobe and PageFair, $22 billion(!) of ad revenue is lost due to ad blockers this year. If the increasing adaptation rate of ad blockers continues as it did in the past few years, the results for content creators and companies can be devastating – and might affect the average internet user as well.
What will the future bring us?
A decrease in ad revenues might result in less content on the web, as ad revenues won’t always enable people and companies to cover their expenses. The entry barrier to create and share quality content might rise, as revenues derived from this content will get more uncertain. A second consequence might be that there will be more places where you will need to pay to access content. Personally I can see the upside of this second consequence, as it makes us, as internet users, more picky in what and how much content we consume.
Seen from a business perspective, the increase in the usage of ad blockers might lead to a change of business model for a lot of companies; they cannot just simply rely on ad revenues anymore. In the future we might see websites with a Spotify-type of business model: view content for free if you are willing to accept ads (whitelist a website if you are using an ad blocker), or pay a subscription fee if you want ad free content.
Studies and examples such as Spotify Premium have shown that users are willing to pay for an ad-free web-environment. Would you be willing to pay, or would you rather see ads in return for free content?