Ad Blocking: The Biggest Threat to the Digital Marketing Industry

 

ad blockingThe current state of affairs for the digital marketing industry has been increasingly lucrative, with the United States tripling their spending digital advertising spending in just eight years. Digital marketing is the second largest advertising medium in the United States, closely trailing television, with a whopping $59.7 billion being spent in 2016.  What is even more promising news is that digital advertising is the fastest growing medium being up 15.6% in spending from 2015 compared to a mere .6% increase in television from last year. The digital dollars are projected to continue to flow for years to come. However, in the darkness lurks the monster threat that is ad blocking.

Why Do People Use Ad Blockers?

Ad blocking is defined as a program that will remove different kinds of advertising from a user’s experience online. These programs target certain kinds of ads, such as pop-ups, banner ads, and other common forms of online advertisement. The chief motivation as to why people turn toward ad blockers is they find that the ads are intrusive or annoying during their online user experience.

This makes a lot of sense, and I am sure that we can all relate to a scenario where we have encountered unwanted pop-ups or advertisements.

The second leading reason is Internet users cite privacy and security concerns. In a world where data acquisition is occurring all around us, to our knowledge, and often not, people are trying to have fewer tabs on their behavior and Internet history. This protection, or falsely perceived protection, from viruses and Spyware gives users a sense of safety.

The third leading reason of ad blocking usage stems from people wanting a better page load time, or reduced bandwidth use. There is a myriad of reasons as to why Internet users employ ad blocking software, but these three were the most notable.

ad blockers

Who Are Ad Blockers?

Ad blockers include a very diverse population. However, a substantial proportion of ad blockers are young men. 65% of all ad blockers are males compared to only 35% being female. When looking at the age breakdown 41% are ages 18-34, 36% 35-54, and 23% are 55 or older.  What is interesting is that 51% of ad blockers have been using this software for three or more years, and when considering how people first heard about ad blockers, 41% of users cited hearing about it from friends, colleagues, and family.

What this shows is that it is this demographic of early adopters of the technology who have been blocking ads for 3+ years are the ones spreading it amongst Internet users.

Numbers Don’t Lie

When analyzing the numbers, the rates of Internet users utilizing ad blocking software is alarming, especially to publishers. In 2016, 69.8 million Americans will have an ad blocker, a 34.4% increase from last year. In 2017, this number is forecasted to increase an additional 24% to 86.6 million, or roughly 3 in 10 Americans using ad blockers.

Now why is this an issue? Who cares?

Ad blocking has cost digital advertisers $22 billion this year, and according to a new Juniper Research study, is expected to climb to $27 billion by 2020. This whopping lost revenue is detrimental to players in the digital marketing field, especially to smaller players who cannot pay the premiums to the ad blocking companies to get their content around their online defenses.

ad blocking

Opportunity

In the face of this great threat, and ad blockers holding publisher’s content hostage, there exists a light at the end of the tunnel.  The mobile medium has been increasing in popularity significantly in recent years past, at a 12% increase in time spent online.  When cross-referencing that figure with just a 4% increase in overall minutes on the Internet, it is evident how mobile usage is driving overall Internet usage.

Mobile ads also have a higher ROI because they are less costly.  Another reason as to why mobile can serve as the kryptonite for ad blockers is the majority of time on a mobile device is spent on an app, out of reach of the majority of ad blockers. Mobile is taking over the world. However, a large disparity exists between browsing and buying.

Mobile took up 60% of the time U.S. consumers spent shopping online in 2015, but only accounted for 16% of e-commerce dollars. What this demonstrates is that there is a huge opportunity for e-commerce marketers to improve mobile conversion rates for years to come.

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