Adblocking tools hit web revenue and traffic, study finds

White Paper co-written by Dublin start-up shows impact of tools on web publishers

At the end of 2016, some 39 per cent of Irish internet users were relying on ad-blocking software.

At the end of 2016, some 39 per cent of Irish internet users were relying on ad-blocking software.

 

Adblocking software not only hits small and medium-sized publishers’ revenues but also their internet traffic, according to new research.

A White Paper, co-written by Dr Johnny Ryan of Dublin-based start-up firm PageFair, shows traffic to small and medium-sized websites declining sharply over a 35-month period as the number of visitors using ad block tools increased.

The study of some 2,574 websites from April 2013 to June 2016 shows that for every additional 1 per cent of ad-blocking use on a website, traffic declined by 0.67 per cent.

Overall, traffic to the various sites reviewed declined by an average of 8 per cent over 35 months due to ad blockers, the report reveals.

PageFair attributed this decline to the software’s impact on site revenues and a knock-on reduction in investment by publishers in content that would draw in users.

Ad blockers typically allow internet users to obtain information without generating ad revenue for site owners. As of last year, as many as a quarter of all website visitors used such tools.

Temporary boost

The paper, co-written by Prof Benjamin Shiller of Brandeis University and Prof Joel Waldfogel of the University of Minnesota and the US National Bureau of Economic Research, shows significant ad-block usage by a website’s audience usually causes a temporary boost to page traffic because internet users enjoy using the site without adverts. However, over a longer period, such websites lose out against rivals.

“Small and medium publishers provide the diverse content and opinions that keep the web vibrant and essential. By harming them, ad block threatens the health of the web,” said Sean Blanchfield, chief executive of PageFair.

According to research published by the company earlier this year, the use of ad blockers rose faster in Ireland than almost every other country last year and it now ranks joint-second globally behind only Indonesia in terms of such technology.

Data compiled by the firm, which works with leading publishers to overcome ad-blocking software, showed a spike in use by internet users of such tools in Ireland in the second half of 2016.

At the end of last year, some 39 per cent of Irish internet users were relying on ad-blocking software with the number of devices with such software installed rising from to 776,929 in January to 1,470,213 in December.

Only Indonesia, where 58 per cent of internet users use ad-blockers, are there more people using such software than in Ireland or Greece, which also has a 39 per cent usage level.