Dive Brief:

• U.S. publishers are losing more than $15.8 billion in revenue this year because of ad blocking, according to a new report from OnAudience.com, which is a part of Poland-based Cloud Technologies S.A. 
• The report also shows that the use of ad-blocking tools are increasing worldwide. In the U.S., 26% of consumers use ad blocking, a 16% increase from 2016. Europe had the highest rates, with more than 30% of consumers using the technology. Latin American countries report the lowest usage. 
• With the current rates of ad blocking use, U.S. publishers are losing more than $15.8B in revenue, up 43% from last year. Internationally, the loss of revenue from ad blocking has risen to $42B from $28B in 2016. 

Dive Insight:

The increased use of ad-blocking technology is causing major problems for publishers and advertisers.  The OnAudience.com report highlights advertisers’ missed opportunities in reaching their audiences and the need for advertisers to better focus on customer experience with relevant, contextual and meaningful content if they hope to convince customers to avoid ad blockers.

E-commerce is one industry feeling the impact of blocking, per the report as more than $600B of the $2,000B in global e-commerce volume is generated by users with ad blockers. The numbers suggest advertisers are unable to reach a significant portion of this potentially receptive group of consumers. In the U.S., e-commerce volume comes in at $595B, of which $155B is generated by users with ad blockers.

Seeing the link between poor customer experience and ad-blocker use, many in the advertising industry are dedicating more resources to address the issue. The CEOs of the three largest digital advertising trade organizations recently sent a joint letter to the Coalition for Better Ads asking for the adoption of a “Better Ads Experience Program.” The groups hope to push everyone involved with digital advertising to comply with CBA’s digital ad standards and, for those who comply, to provide a “safe harbor” from blocking, filtering and other obstructions.

Six major advertising organizations also released an open letter condemning a new functionality, called “Intelligent Tracking Prevention,” in the latest update to Apple’s Safari that blocks or removes first-party cookies without users’ consent. The advertising groups say this could create more generic and less useful and timely ad-supported content, which could further alienate consumers.

Consumers consistently cite obtrusiveness, disruptiveness, annoyance and security concerns as reasons to block digital ads, especially when ads affect content load times or interfere with access to content. The most reviled are pop-up ads that require customers to actively close them. Nearly 70% of customers who use ad blockers say they don’t mind seeing ads, as long as they aren’t too annoying or disruptive. Advertisers still have a ways to go in improving customer experience, even though data show a direct link between poor experiences and use of ad-blocking tools. As digital strategies are refined, customer behavior should define what comes next.