Ad blocking has gone fully mainstream. What was once a niche practice of early adopters is now a daily reality for a huge swath of internet users around the world. The latest data paints a stark picture:
- As of 2022, 43% of global internet users aged 16-64 use ad blocking extensions or browsers according to Statista
- For 18-25 year olds, that number jumps to over 54% (Backlinko)
- In some countries like Germany, France, the UK, and the US, ad blocking rates now top 40% of users. Even in markets with relatively low uptake like Japan and South Korea, it‘s still 10-15%+ (PageFair)
| Demographic | Ad Block Rate |
|---|---|
| 18-25 | 54% |
| 26-35 | 46% |
| 36-45 | 38% |
| 46-55 | 31% |
| 56-65 | 24% |
| Country | Ad Block Rate |
|---|---|
| Indonesia | 58% |
| Ireland | 49% |
| Greece | 47% |
| Poland | 46% |
| Germany | 45% |
| United States | 41% |
| Canada | 39% |
| Japan | 15% |
| South Korea | 13% |
Data sources: Backlinko, PageFair
For publishers and content creators who depend on advertising revenue to fund their operations, the implications are enormous. While estimates vary, some peg the total potential revenue loss from ad blocking as high as $100 billion (OnAudience.com). Whatever the exact number, it‘s undoubtedly in the tens of billions annually. That spells an existential threat for many ad-supported websites and apps.
How Ad Blockers Turn Eyeballs into Income
You might be wondering how ad blocking companies make money when their core product prevents websites from generating ad revenue. As it happens, they‘ve developed a number of crafty business models:
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Acceptable Ads – Some ad blockers, most notably Adblock Plus, have implemented programs where they allow certain non-intrusive ads to bypass their filters in exchange for payment from advertisers and ad networks. These "whitelisted" ads have to meet strict criteria around placement, size, labeling, and more. AdBlock Plus, the most popular ad blocker with over 65 million active users, made $160+ million in 2021, largely from these Acceptable Ads (Business Insider).
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User Data – Ad blockers have access to reams of valuable data on their users‘ browsing behavior. A portion choose to package and sell this data in aggregate, anonymized form to marketers, researchers, and other third parties hungry for audience insights in an increasingly privacy-centric world. For instance, Ghostery charges companies up to $500,000 per year for its data and analytics offerings (Wall Street Journal).
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Premium Subscriptions – Certain ad blockers provide paid subscription tiers that unlock additional functionality beyond just blocking ads. Ghostery Insights is one example, offering power users detailed data on trackers and granular custom blocking controls for a recurring fee.
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Affiliate Deals – Some ad blockers experiment with their own affiliate marketing arrangements, where they earn a commission for referring users to partner products or services. It‘s a form of "sponsored content" but within the ad blocker ecosystem.
However, many ad blocking companies are primarily focused on gaining market share and amassing users, with revenue as a secondary objective. Like other tech startups, the overarching goal is often to achieve scale rapidly and figure out monetization down the line.
Reclaiming Lost Revenue from Ad Blocking
As a publisher or website owner, what can you realistically do to compensate for disappearing ad revenues? A few common plays have emerged:
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Adblock Detection and Messaging – Plenty of tools exist, like WordPress plugins, that can identify visitors using an ad blocker. You can then present them with a message imploring them to disable the blocker or whitelist your site. Tact is key though, as overly aggressive or guilting appeals may backfire. Simple, friendly explainers of how ads fund your work tend to perform best.
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Content Blocking – More heavy-handed is preventing ad block users from accessing your content at all. This protects against freeloading but with the huge tradeoff of turning away potential audience members. If you do go this route, make sure to give people some way to earn their way in, like temporarily disabling their blocker.
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Paywalls and Memberships – Putting your content behind a paywall or members-only gate sidesteps the ad blocking issue entirely. Of course, in an era of abundant free content, relatively few properties can command a paid premium. It requires having truly differentiated content and a loyal audience.
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Diversified Monetization – Cultivating revenue streams outside of traditional web advertising insulates you somewhat from ad blocking. Affiliate deals, sponsored content, native ads, donations, subscriptions, and ecommerce are all less susceptible to blockers. You‘re not as vulnerable if you‘re not relying solely on display ad impressions.
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Upgraded Ad Experience – Serving more relevant, higher-quality, less intrusive ads can reduce the incentive to block them at all. Avoid annoying formats like pop-ups and autoplaying video. Prioritize clean, fast-loading placements. Work with ad partners that specialize in premium, targeted creative. Generally, native-style ads and integrated sponsorships get blocked at lower rates than standard banners and interstitials.
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Server-Side Ad Insertion – One technical solution to ad blocking is to stitch ads directly into content on the server level, before it reaches the user‘s device. This makes them much harder (though not impossible) to detect and filter compared to client-side loading. It does come with higher implementation costs and technical hurdles.
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Adblock Recovery Platforms – A newer category of service providers like Admiral and Blockthrough offer more robust ad block mitigation. These platforms handle blocker detection, messaging, whitelisting, acceptable ads, and more in a single integrated system. They usually take a cut of recovered revenue but handle much of the complexity.
Ultimately, the key is striking a delicate balance between shoring up your bottom line in the near term and protecting the long-term user experience. Resorting to overly punitive or coercive tactics will likely only serve to drive your audience away for good, so emphasize delivering distinctive content and building direct relationships. Make a genuine case for how advertising underwrites your vital work.
Looking Ahead: Advertising in the Ad Block Era
Despite publishers‘ best efforts, there‘s little sign of the overall ad blocking trend abating anytime soon. The practice is especially prevalent among digital natives – the teens and young adults who will make up an ever-larger share of the internet population. As PageFair notes in their 2022 Adblock Report, "adblocking has become a new normal for the largest demographic groups in most major markets."
What‘s more, conventional web advertising faces compounding pressures on multiple fronts, from stricter privacy laws to the siphoning of ad spend by walled gardens to pervasive banner blindness among users fatigued by years of invasive ad bombardment. Display will surely always have a place in publishers‘ revenue mix, but likely a diminished one over time.
Forward-thinking content businesses are moving proactively to wean themselves off outsized dependence on fickle ad monetization. They‘re getting creative about forging proprietary audience connections that translate to more predictable income, whether that‘s through:
- Earned subscriptions and memberships
- Affiliate commerce and direct product/service sales
- Branded content campaigns and events
- Donations and micropayments
- Gated learning and community offerings
The throughline is focusing on delivering real audience value worth paying for, not just aggregating clicks and eyeballs. Increasingly in a post-ad-block world, durable media brands will be built on direct relationships and concrete impact vs. raw reach metrics.
So while the ad blocking phenomenon undeniably poses severe short-term revenue pain for publishers, it‘s also a powerful catalyst to break out of flawed legacy models and architect the next generation of digital content economics. The organizations that manage to perceive the opportunity in the midst of the adversity – and orient their strategies around the long-game accordingly – will be best positioned to flourish in whatever comes next. To paraphrase Toynbee, the future belongs to those who can transform today‘s challenges into tomorrow‘s breakthroughs. Let‘s get building.
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