Mobile Ad-Blocking Threatens Online Revenue: Study

by CXOtoday News Desk    Jun 01, 2016

ad blocking

While desktop adblocking is more popular in North America and Europe, mobile adblocking has taken off in emerging markets such as India, China, Pakistan and Indonesia. 

More than one in five smartphone users globally are blocking ads when browsing the web on their devices posing a “serious threat” to firms relying on advertising revenues, according to a PageFair report, “The Cost of Ad Blocking.” The report, published in partnership with Adobe, revealed that at the beginning of 2015, use of desktop ad blocking software had increased by 48 percent in the United States, 35 percent in Europe, and 41 percent around the world.

PageFair has now released an additional report in partnership with Priori Data, “Adblocking goes Mobile” revealing that at least 419 million people around the world are using adblocking software on their smartphones. Furthermore, there are now twice as many mobile adblockers as there are desktop adblockers.

The report shows, China has the highest usage of adblocking software totalling approximately 159 million users. Over the course of 2015, use of adblocking grew by approximately 90 percent, compiling 21 percent of the world’s 1.9 billion smartphone users.

This makes mobile adblocking the most popular form of adblocking in the world.

Ad-blocking advocates believe that ads are using too much mobile data - which in turn is slowing down page load times and collecting user information. In emerging markets especially, this is posing a huge threat. This is the reason behind such a high concentration of ad-blocking users in countries such as India and Indonesia.

The big threat

The rise of ad-blocking has posed a challenge to business models that are dependent on ad revenues. “Mobile ad-blocking is a serious threat to the future of media and online businesses in emerging markets, where people are coming online for the first time via relatively expensive or slow mobile connections,” Pagefair said in its report.

Use of the software comes in many forms, such as, browsers like Firefox for Android or Opera Mini for Android allow users to opt in for ad-blocking. At the same time, there is now the possibility to block ads within apps. Also, the software has also been employed at a network carrier level.

The report said that blocking at the network level could increase where regulation does not prevent it, making the next 1 billion internet users “invisible to digital marketers.”  According to the report, “Unless the bandwidth cost of current advertising is addressed, the ad-dependant digital media industry will never get a chance to flourish in many developing economies.”

As the Adobe and PageFair 2015 study said the losses for websites that rely on advertising could be huge approximately, $21.8 billion in 2015 and rising to $41 billion in 2016.