Ad blocking will cost online publishers $22B this year, report finds

Ad blocking software will cost online publishers an estimated $21.8 billion in lost advertising revenue this year, says a new report published Monday, and that number could rise dramatically as mobile ad blocking technology moves to mobile devices.

The report found that 198 million people worldwide are using ad blockers online, a 41 per cent increase from June 2014.

The enormousgrowth in the number of global usersbegan in 2012 and has been rising steadily since then, says Sean Blanchfield, the CEO of PageFair, a company that tracks trends inthe ad blocking industry and consults with publishers on how to recover lost online advertising revenue.PageFairproduced the study in conjunction with Adobe.

Ad blockingusing extensions, plug-ins or speciallydeveloped browsersto prevent ads from showing up on your screenbegan as a phenomenon limited totech-savvyearly adopters. In the past few years, however, the technology has been welcomed into the mainstream.

• AdBlockPlus mobile browser could devastate publishers
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"The total economic impact was a lot larger than we intuitively thought at the outset of putting the study together," says Blanchfield."We just didn't expect to see a number that large."

More people are employing ad blockers because of a "growing distrust of the advertising industry"and fears over what advertisers are doing with personal data and information gleaned from tracking online activity, says Blanchfield.

Growth in the number of people employing ad blockers is correlated with the 2009introduction and subsequent popularityof Google Chrome, which surpassedInternet Explorer as the most popular internet browser in North America and Europe last year.

Chrome supports a range of ad blockers, even thoughthe majority of Google'srevenue is derived from hosting online ads.There are currently 126 million people using an ad blocker with Google Chrome, a 51 per cent increase from last year, says the report.

AppleiOS 9 could be a 'gamechanger'

By 2016, the total global cost to online publishers could be $41.4 billion, the report estimates, as more people usead blocking extensions on their internet browsers and as mobile-based adblocking technology gains momentum.

The biggest revolution yet in the ad blocking landscape could come this fall, when Apple is expected to release iOS9,the newest iteration of its mobile operating system.For the first time, Apple will give developers the capacity to develop iOS 9-specific ad blocking apps that will be supported by Mobile Safari, which currently represents about 52 per cent of the global mobile browsing market.

"It could be a real gamechangerin terms of mobile advertising," says Blanchfield.

For years, the mobile space has given online publishers many of whom rely onrevenue generated from online ads to stay in businessa reprieve from ad blocking technology. But Apple's move towardsupporting ad blocking on its mobile devicescould pushmore publishersto put content behind pay walls or incorporate more "advertorial"content into their business models, Blanchfield says.

"It's kind of a tragedy, that people using ad blockers are inadvertently inflicting losses on the sites that they visit most and like most."

Shake-up foronline advertising

Eyeo, the company that operates AdBlockPlus, one of the world's most popular ad blockers, is developing its ownbrowser for iOS 9, as well as an app that can be run with Mobile Safari.

"It's clear that the next step for ad blocking will be on mobile devices," says Ben Williams,communications and operations director forEyeo. "Ad blocking's growth is a symptom of poor advertising and there's obvious demand for mobile solutions."

Mobile ad blocking is already going mainstream in India and China, where two extremely popular browsers with a combined 600 million users come equipped with an ad block extension.

Ultimately, ad blocking is going to shakeup the multibillion-dollar online advertising industry "in a positive way," says Williams, whorejects the notion that online advertising is the only way to make money on the internet.

"The idea that we can't find other ways to monetizeonline is absurd to me."