What Is Ad Blocking, and How Will It Affect My Business?

by Megan Sullivan

5 min read

The latest online buzz word is “ad blocking,” and it’s been gaining more and more attention over the past few months. What might be most baffling about all of this newfound attention, however, is that ad blocking isn’t new. In fact, it’s pretty common for a huge swath of online users, many of whom opt to install ad-blocking software to help them avoid ads that impair the performance of websites on their computers or smartphones.

Let’s explore what ad blocking is, why it’s getting so much attention now and how it might affect your business.

What Is Ad Blocking?

Ad blocking is exactly what it sounds like. It blocks ads from displaying when a user surfs the internet by refusing a connection to a given ad. Typically, ad blocking is accomplished by installing an ad blocker via a browser plug-in, like AdBlock or AdBlock Plus. Recently, AdBlock Plus has also developed a mobile browser plug-in which translates the ad-blocking experience to mobile devices.

Ad blocking is not an exact science, and the algorithms that the programs employ aren’t always accurate. They are sophisticated enough, however, to remove most ads from sites.

What Does Ad Blocking Do?

Aside from blocking ads from displaying on web pages, ad blocking does a few other things.

  1. It speeds up a user’s browser experience. Displaying ads on the page, along with all of the associated tags and analytics, greatly slows down web browsers and eats into capped internet data plans.
  2. It “protects” the user from being geo- or behaviorally-targeted by programs that track a user’s history on the web and then serve ads to match. Many savvy internet users who most commonly use ad blockers feel that the targeting done by many online advertising companies has become too granular and invasive. They feel that this is an invasion of privacy, and often equate the level of monitoring they are subjected to as “big brother”-style in nature. Orwellian implications aside, ad blocking at the very least offers an uncluttered online experience.
  3. It greatly affects online publishers and, to a lesser extent, online advertisers. Publishers (i.e. the companies that own websites) make a majority of their revenue from online advertising. When a user enables an ad blocker, ads are not served (i.e. viewed) and therefore, the publisher cannot charge the advertiser for the impression (i.e. view). Publishers in particular are very worried about ad blocking and it’s far-reaching implications, especially on mobile devices, which account for growing number of website views.

Online advertisers are affected as well, although they aren’t necessarily feeling it to the same extent as publishers. Where online advertisers really suffer is in online exposure. If a business purchases a number of ad impressions, and those impressions cannot be delivered because of ad blocking, then the advertisers lose a chance to market to these users. An argument can be made that online users aware enough to use ad blockers are less likely to be swayed by an ad, but that’s more a theory than a proven fact.

If It Isn’t New, Why Are We Just Starting to Talk About It?

As with most things relating to technology, especially when it comes to introducing niche functionality into the mainstream, Apple is the culprit. With the launch of iOS9, Apple introduced content-blocking capabilities at the operating system level, meaning that developers would have an easier time programming apps that blocked ads. That change made ad blocking part of the public consciousness.

Even before Apple’s move, however, ad blocking has been on the rise for the past five years. According to a report by Adobe and PageFair, the number of people using ad blocking tech grew from 21 million people to 181 million.

Should I Be Worried?

If you spend copious amounts of money on online advertising, ad blocking will probably not affect you as much as you fear. For most small business owners that spend a smaller amount on ads more tailored for a target market, even 10% of users installing ad-blocking software can have an impact on your results.

In spite of that figure, it’s all about perspective. The internet is vast, and the number of visitors to websites every day is in the billions. Ad blocker penetration would need to be much higher than it currently is to truly impact small business. Currently, it’s estimated that approximately 6% of U.S. internet users also use an ad blocker browser plug-in.

As a Business Owner, Where Do I Go From Here?

Ad-blocking software, whatever its form, is the wave of the future, so expect to hear more about it. The biggest issue surrounding ad blocking isn’t necessarily how it affects small businesses or even consumers, but how it affects publishers and therefore, access to the web.

Publishers are able to host websites, hire writers and photographers and provide content based on the revenue generated from advertising. Part of the implied contract between users and publishers is that users will tolerate ads in order to get content for free.

If publishers begin to lose significant revenue due to ad blocking, this might change the ability for them to provide free content or any content. We have already seen this shift with newspapers and their digital offerings. The online subscription model hasn’t proven effective and cannot recoup all of the lost advertising revenue. It’s obvious something must be done, so if publishers are smart, they will try to get ahead of the curve.

There are two best practices for small businesses to accomplish this. The first is to continue to diversify their advertising and marketing plans. Focus on the things that aren’t traditional ads, such as social media mentions and word-of-mouth recommendations.

The second is to deal with online advertisers whose ads won’t aggravate users to the point that they use ad blockers. For example, the Internet Advertising Bureau recently announced an initiative to create ads that aim to rebalance the “fine equilibrium of content, commerce and technology” that turned so many users off ads.

Ad blocking isn’t just the bogeyman under the bed. It’s a real threat that must be addressed, especially if publishers, advertisers and consumers want to continue to consume online content as they always have. Even so, the current impact to small business remains small. So, for now at least, it’s one less thing to worry about.

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