By the Blouin News Business staff

Is free adblocking the end of the online ad industry?

by in Global Economy.

(Source: Joe The Goat Farmer/flickr)

(Source: Joe The Goat Farmer/flickr)

by Michael Lerner

According to a forecast released on Tuesday by analytics firm Optimal, the damage that adblocking software will inflict on the digital ad industry will triple by 2020 to exceed $12 billion (out of $50 billion otherwise). The firm says more than 43 million people in the U.S. will use an ad blocker this year, taking more than $3.8 billion out of the industry. By 2020 over 100 million U.S. web users are expected to be blocking ads, especially because many adblockers are free to install.

Indeed, the principal reason (at 45.6% of 1,320 survey respondents) why most people haven’t yet switched on an adblocker is simply because they are not aware they could block ads.

Consumers hate ads, particularly cheap, annoying ones that block the screen. Yet content creators need to fund their operations somehow, and if they offer the content for free then advertising has to make up the difference. While many in the online ad industry are despairing about adblocking, it doesn’t need to be so polarized.

44% of adblocker users say they just don’t like ads, so they wouldn’t be customers anyway. And more than half of the survey respondents said they could be persuaded to turn off an adblocker for access to content. About 36% said they would do so under some circumstances, while another 29% said they would switch it off in rare circumstances, wrote the Guardian.

Adblocking will force change upon the industry. If ad firms produce fewer, better-quality ads (including “native advertisements,” where product or brand promotion is incorporated into the content viewers want to see, i.e., a TV series in which the protagonist uses a certain brand of car), people would not be as bothered. We actually like some ads, like those during the Superbowl, and movie previews.

Ads will have to step up their game to stay alive.