Ad Blocking: Motivations and Implications

Over the past year, I’ve read a number of reports, studies, and case studies, that overwhelmingly confirms consumers are getting savvy to techniques used to exploit their online behavior during the growth boom of the Internet. How consumers react, or the backlash an alteration in their behavior creates is going to be a critical narrative for how the Internet changes over the next few years.

Free With Ad-Blocking
I think we may look back at what caused the inflection point for the Internet experience to change and it seems to me the creation and support of ad-blocking will be that inflection point. Free services on the Internet have always come with an advertising-supported business model. Free with ads, was the terminology. But with the rise of ad-blocking popularity free with ad-blocking is becoming the new normal. Companies providing free services are going to need to adjust.

I’ve been tracking usage of ad-blockers for almost two years now and can break the data out by country and by age group. This trend started with millennials jumping to the early majority of users. From the earliest data points tracking this data in mid-2016 42% of millennials globally surveyed said they used an ad-blocker in some capacity. I remember pointing this out on Twitter when I first saw the research and people thought I was crazy. In the next six-months, as more data came out and suggested the same, people began to understand how younger demographics may cause a fundamental change in how free services on the Internet are monetized.

Fast forward to the end of 2017, and the data we are tracking resulted in 41% of all Internet users surveyed across 34 countries saying they use an ad-blocker regularly. Millenial ad-blocking usage has grown to over 50% saying they use an ad-blocker regularly. Luckily, we also have data on what the key motivations are for consumers to use an ad-blocker. Motivations boil down to a few key factors.

1. Frustration. 61% of global Internet users who are actively using an ad-blocker listed a reason that I call frustration. Things like too many ads, adds are annoying or irrelevant, ads take up too much screen space, etc. I remember studies done by Yahoo at its peak and core conclusions were that people were training themselves to ignore ads on Yahoo, and on other websites, once they knew where they constantly were placed and how to recognize them and ignore them quickly. This was an early indication ads were a necessary but ignored part of the free Internet. The rise of ad-blocking made it easy for consumers not to see them, and really not care how it hurts the companies revenue from the service they are consuming. There is no generosity sentiment when it comes to ad-blocking.
2. Privacy. Reasons that I bucket into privacy concerns are the second main reason consumers block ads. Responses like, ads are too intrusive, or I want to stop ads from being personized, ads impacting my online privacy, etc., made up 51% of consumer motivation in this particular survey. There is clearly a sentiment shift around privacy which has spread deep and wide into the public consciousness and we continually see that stand out in many different studies and reports. This is no doubt aiding in the popularity of ad-blocking.
3. Performance. The last bucket of most popular motivations to block ads is performance. This was much farther down the scale than the previous two, but somewhat more important geographically than globally. Overall, 26% of Internet users listed a performance reason as a motivator to block ads. This was things like page load times, and not wanting to go over their monthly data allowance. You can see why those reasons may be much more important in countries where data usage has large tariffs associated with it and/or Internet speeds are well below global standards. For this demographic, the Internet remains crucial to their lively-hood but they literally can’t afford to see the ads on the free services they are consuming.

There is more to unpack around the dynamics of ad-blocking to truly understand how consumers are adapting and avoiding the types of things that keep many services on the Internet free, however, the implications are potentially huge. Entire companies, like Facebook and Google, could fall by the wayside if they can’t adapt to these dynamics. A clever saying that emerged was that advertising is a tax on the poor. Those who can afford it will move more toward services that are in line with their priorities and experiences they value and that will less and less be things that are advertising driven. The poor can’t afford, or won’t put up with ads and thus will use ad-blockers and still consume many of the free services they care about.

Where advertising fits into this is still unclear, but it is possible we have to question the nature of the advertising-based business model or re-invent it somehow. A key assumption is consumers will tolerate ads more if they become more relevant or targeted. While still early, a number of research reports call into question that assumption particularly if the privacy bucket I described above grows.

In many conversations I’ve had with brands, advertising networks, etc., I try to remind them that we are still in somewhat uncharted territory. We continually observe new patterns and behaviors with consumer globally and often learn new things. Which means many of the previous assumptions, or pre-existing market models always need to be held with a grain of salt.