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BizReport : Advertising : August 24, 2016

Expert: How ad blocking is affecting brands now

Ad blocking hasn't become the death knell of the digital marketplace as some experts believed - at least not at this point. But, ad blocking does come at a cost for merchants and brands.

by Kristina Knight

Kristina: What is the current state of ad blocking?

Patrick Hopf, President & Co-Founder, SourceKnowledge: It's been tough to prove exactly how much revenue publishers and advertisers have lost due to ad blocking. Industry data indicates that there are about 200 million people using some form of ad blocking software. On average, over nine percent of millions impressions are ad blocked.

Kristina: What do you expect to see over the next year?

Patrick: It's estimated that by the end of the year, the global cost of ad blocking will be 41 billion. In the United States alone, revenue loss has been pegged at over 10 billion and will double by the end of 2016. I've seen numbers as high as 27 billion in projected revenue loss by 2020 in the United States.

Kristina: For a while, consumers seemed to be driving ad blocking - is that still the case?

Patrick: Consumers are frustrated - but they don't hate advertising. What the majority of people are opposed to is a poor user experience. Ads that autoplay or obscure content, force clicks and open a third-party page, or slow the page load are directly responsible for the widespread adoption of ad blocking.

Kristina: Is there value to ad blocking tech for advertisers? Also, what about publishers?

Patrick: Ad blocking prevents advertisers from wasting budget on individuals that are not receptive to ads. They're essentially opting out of the pool of eligible end users which saves on ad spend. If you're an advertiser that is focused on driving return on ad spend (RoAS) then that's a huge positive. The SourceKnowledge Engage platform optimizes campaigns around RoAS and conversion rate so ad blocking works in our favour. However I can't image that advertisers focused on awareness metrics share this sentiment.

Publishers on the other hand aren't seeing the same benefits. They're losing a lot of revenue. Ultimately it's up to them to limit the disruptive ad placements on their site and focus on driving a positive user experience. Until publishers limit intrusive advertising practices, they're going to continue to lose revenue.

More from Patrick and SourceKnowledge later this week, including how brands can make ad blocking work for them.

Tags: ad blocking, ad blocking trends, advertising, advertising trends, SourceKnowledge

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