Ad blocking costing companies billions and growing very fast

The technology is getting so big that it is an 'existential threat'

Confetti falls throughout Times Square during the New Years Eve celebration on January 1, 2013 in New York City (Christopher Gregory/Getty Images)

The use of ad blocking is surging and is costing companies billions of pounds, according to a new report.

Use of software to keep ads off web pages has increased 41 per cent, according to a report by Adobe and PageFair, costing $22 billion in lost revenue in 2015. And the numbers are set to keep increasing.

Ad blocking software uses extra tools in an internet browser to spot ads and stop them from loading onto a users’ computer. The makers of such software claim that it helps improve the web — but it also deprives companies of ads that they would gain from showing such content to users.

For the moment, such technology is largely limited to the desktop, where easy-to-download software is available for all of the major internet browsers. But it is gradually coming to phones, at which point it will likely grow even faster — in iOS 9, Apple has provided the ability to let developers make content blockers, and an ad-blocking browser was released earlier this year.

“Since our last report, the existential threat of ad blocking has become a pressing issue in the boardrooms of publishers across the world,” notes PageFair in its introduction. “We hope this report will continue to help publishers, advertisers, consumer groups and technology vendors come together to define principles that support a sustainably free and open web.”

In the UK, ad blocking has surged by 82 per cent, to 12 million active users in the year to June 2015. That’s slightly higher than the US but much lower than some other countries in Europe — in Poland, for instance, the number of people using ad blocking technology represents 35 per cent of the population.

Blocking ads is largely concentrated in specific demographics. That means that sites that are used by those groups — pages that have “young, technically savvy, or more male audiences” — tend to be more effective.

Gaming websites, social networks and those about technology and the internet are particularly hard hit, for instance. But governmental or legal sites, or those about travel or health, have a much smaller share.