Ad-blocking software is killing the free Internet, according to a new report that estimates online publishers will lose $21.8 billion (19.7 billion euros) in revenue this year due to their ads being blocked.
Some 198 million Internet users now use ad-blocking software, a 41 percent increase in the past 12 months, according to the report commissioned by Adobe and Irish startup PageFair, an ad-unlocking company which develops software to allow websites to circumvent ad-blockers with non-intrusive advertisements. In the UK, use of such software grew by 82 percent over the past year, while the highest penetration of the software in Europe was in Greece, where 37 percent of Internet users implement the software.
The report adds that publishers' revenue losses will almost double next year, when they estimate ad-blockers will cost websites $41.4 billion (37.4 billion euros). Sean Blanchfield, the Chief Executive and Co-Founder of PageFair, says that the growing usage of ad-blocking software increasingly means that websites will have to turn to paywalls or even close down if they are no longer able to make ends meet. "Ad-blocking software does greatly improve the typical user's web experience, but the secondary effect is that it puts the websites they are visiting out of business, which is not to the benefit of the user," says Blanchfield.
In terms of demographics, the report found that those most likely to use ad-blocking software were male, young and interested in technology, which could be bad news for gaming and tech sites. The authors estimated that users of video game sites contribute more than a quarter of all ad-block usage. "For these companies, it basically means that unless they change something or something changes... they don't have a future, they just don't have ad space they can monetise anymore. They certainly don't have a future as a free website," says Blanchfield.
As well as removing unwanted advertisements, ad-blocking software can have security and privacy benefits. According to a 2013 report by technology company Cisco, online ads are 182 times more likely to give users a virus than using pornography sites. The PageFair report also found that 50 percent of ad-block users enabled such software because they felt their privacy was being violated in order to personalise advertisements.
However, ad-block developers have encountered legal challenges by publishers losing out due to their software. In April, a Hamburg court ruled that AdBlock Plus—an ad-blocking app—was a lawful tool after German newspapers Die Zeit and Handelsblatt filed an action against the app's parent company, Eyeo GmbH, saying it was anticompetitive and threatened their ability to make money. AdBlock Plus, which claims more than 300 million downloads, has setup 'whitelist' agreements with several internet behemoths, including Google, Amazon and Microsoft, which allows unintrusive ads from those companies to slip through their ad-blocking net in exchange for payment.
Ben Williams, AdBlock Plus's Communications Manager, says that ad-blockers are not intending on being the "killers of the free Internet" and called on publishers to provide less intrusive, better ad solutions. "Ad-blocking is a response to bad ads and it is a disruption of a system that is broken," says Williams. "Ultimately, I don't think anyone would agree that the current state of online ads, the amount of ads and their intrusiveness, is where we really want to be."
Uncommon Knowledge
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About the writer
Conor is a staff writer for Newsweek covering Africa, with a focus on Nigeria, security and conflict.
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