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BizReport : Advertising : May 18, 2016

Optimal: The cost of ad blocking

Analytics firm Optimal forecasts that ad blocking will take almost $4 billion out of the digital ad industry this year as millions of people in the US use ad blocking software.

by Helen Leggatt

According to Optimal, more than 43 million people in the US will use an ad blocker this year resulting in a loss to the digital ad industry of $3.8 billion. Taking the current rate of growth that would mean a tripling of the loss to over $12 billion by 2020 (taking digital ad revenue down from a forecast $50 billion to $38 billion) when it is forecast that more than 100 million people in the US will employ an ad blocker.

Nearly a quarter (23%) now block ads on smartphones.

Among those surveyed Optimal found that almost half were aware that blocking ads online was possible and that "Given that ad blockers are often distributed to users without charge, the increase in awareness of adblocking will be a major adoption driver, and it is possible that publisher action to curtail content to ad blocking users might actually further increase consumer awareness of online/mobile ad blocking."

Interestingly, the forecast discusses Facebook's comparative immunity to the problem, predicting just 3.2% of the company's mobile ad revenue will be lost in 2020, equivalent to $335m.

Tags: ad blocking, advertising, digital advertising, revenue

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