As companies everywhere move to embrace digital marketing in a bid to increase customer reach, research shows that consumers are, in fact, adopting ways of blocking these very same advertisements, with upwards of 16 per cent of smart phone users having now blocked the ads on their phones: most frequently on social media platforms.
“In the survey we conducted, 64 per cent of the respondents said they installed advertisement blockers (ad blockers) because the pop ups are annoying and intrusive, 54 per cent indicated they are disruptive, 39 per cent said it was due to security concerns, while 36 per cent stated that the advertisements affected the load time and bandwidth usage,” reported a 2016 study by research firm, HubSpot, in partnership with AdBlock Plus, one of the most widely used ad blocking extensions in the world.
This surge of blocking, which has seen 16 per cent of the estimated 1.9bn global smartphone users install the software on their devices, is already impacting advertisers’ consumer reach, especially to millennials, who are a key target market for brands.
In sub-Saharan Africa for instance, millennials use social media as their main source of current news, which, as a result, has led to an increase in ad blockers being used on online platforms.
“Social network platforms such as Facebook, Twitter, YouTube and WhatsApp have become an integral part of everyday life with over 60 per cent of millennials using social media as their primary source of information. Television comes a distant second at 25 per cent, with newspapers being the least important source, at six per cent,” said Njeri Wangari, a marketing manager at GeoPoll, in a report on African Millennials; Mobile Usage and Media Consumption.
But despite television and newspapers being the least important source of information for millennials, they generally prefer the advertising in these sources, with the HubSpot research reporting that offline advertisements were viewed more favourably than online pop up ads, google mobile ads, video ads and social media ads, with social media ads found to be the most blocked of these.
Across all types of online platforms, gaming, which has been on the rise since 2007 from 217m gamers worldwide to 1.78bn in 2014, has seen the highest ad blocking rate.
“Visitors to gaming websites are significantly more likely to block advertising. Visitors to health, charity, government or legal websites are significantly less likely to block advertising,” found a 2016 report on the cost of ad blocking by PageFair, a global author on ad blocking trends.
“In the study we found that 26.5 per cent of ad blocks originate from gaming sites, 19.1 per cent from social networking platforms, while 17 per cent originate from the general Internet. Only 2.5 per cent originate from government and legal sites.”
Overall, the move by consumers to block online advertisements is now losing companies billions of dollars in ad revenues.
Globally, the potential ad revenue loss numbers due to ad blockers was estimated to be $20.3bn in 2016 by the PageFair report. That number is expected to double this year to $41.4bn.
In this, brands such as Google have been negatively impacted. In 2014, for example, Google was estimated to have lost $6.399bn from both US and international revenues due to ad blocks. This was 10 per cent of the total revenue it reported that year.
Indeed, as technology develops, the usage of advertisement blocking plug-ins is now set to become commonplace.
Advertisers are thus tasked to come up with better and more attractive strategies of packaging their materials to avoid blocking in order to reach their intended target markets.