When you think of the effects of "free goods" it's as if the metaphorical dinner bell has rung. The enchantment behind "free" can create demand by the droves. But what does free really mean in the digital age? Free online content is not always free. If you read an article on Buzzfeed or watch a Tyler Oakley video on YouTube, spoiler alert: that content was bought and paid for by somebody, even if that somebody is not you.
Millenials are used to efficiency as seen in the form of streaming and torrents, so it's no surprise most Millennial consumers don't want to pay for content piecemeal. So where does one call foul, when content creators spend hundreds if not thousands of dollars or man hours on listicles, YouTube tutorials and enough cat GIFS to own Tumblr? It's hard to place a dollar amount on entertaining content, but they deserve to be compensated fairly, right?
Enter: Digital Advertising
Ads require payment from all parties involved. The advertisers themselves pay, well, money. Content creators pay by ceding space from their website, time from their video, or some other valuable real estate. The only price that consumers have to pay is attention. And it's surrounding this last group that issues are beginning to arise.
Online advertising is in trouble. The industry is built on getting products in front of as many eyeballs as possible, but those eyes are becoming increasingly blind to anything but pure content. Ad blockers have grown from a niche tool of the tech-savvy to something that, sometime soon, even grandma might have on her laptop.
According to PageFair's 2015 Ad Blocking Report, there were 198 million active ad blocker users worldwide, with a growth rate that would put the current number over a quarter of a billion. During Q2 of 2015, there were 45 million monthly active users in the U.S. alone, the result of a 48% annual growth in usage.
That translates into tens of billions of dollars in lost revenue, putting a squeeze on content producers big and small. As Ken Fisher of Ars Technica put it: "Imagine running a restaurant where 40% of the people who came and ate didn't pay. In a way, that's what ad blocking is doing to us."
Who is responsible for this? Who are the people using these adblockers?
The people most likely to use ad blockers are primarily - you guessed it - Millennials, and well-to-do Millennials at that. Unfortunately for advertisers, those most likely to block their ads are exactly the high-value targets they're trying to reach.
Roughly 32% of adblock users are males between the ages of 18 and 34, and 22% are women in that age range.
As expected, the typical adblock user is digitally-savvy: visitors to gaming, social networking, and technology-related websites are far more likely to block ads. The Snapchatting, Instagram-obsessed Millennial is far more likely than average to be an adblock user.
As Google Chrome becomes the default browser for an increasing share of users, it has also become the leader in adblocking. This is partially a result of its own demographics, but also the ease with which adblocking browser extensions can be installed.
But What About Mobile?
So we can assume "standard" web pages are in trouble, but at least mobile ads are safe...right?
Not even close. According to PageFair's 2016 Mobile Adblocking Report, 419 million people are blocking ads on the mobile web .That's 22% of the world's smartphone users.
Cisco recently uncovered that reports two-thirds of the world's population will own a mobile device in only four years! That's 70% of the global population by the year 2020.
The prevalence of mobile adblocking is made possible by the introduction of applications for mobile users that allow them to block the very same ads on their phones as they would on their laptops. Even Apple has okayed this development, enabling adblockers on its iPhone Safari browser and allowing ad blockers into its app store. Within days, three of the top five apps in the store were ad blockers.
However, the vast majority of adblocking is actually done through mobile adblocking browsers, which do not allow ads by default. Leading the charge is UC Browser - owned by the online marketplace giant Alibaba - which has more users than all other forms of adblocking combined.
Reflecting this fact is the geographical rate of adoption: emerging markets such as China, India, Indonesia, and Pakistan lead the charge by a wide margin. With slow or expensive mobile options in these countries, this widespread adoption comes as no surprise because of the toll ads take on mobile data. Ads can eat up a significant portion of your plan and significantly affect your connection speed.
Looking for more on the war on ads and its importance to marketers? My firm, Firebrand Group has put together one of our Orange Papers focused on the topic. It covers how ads affect data usage, why users are turning to ad blockers, and how content creators are fighting back. You can access it here.