Adblockers Are Costing Google Billions
According to a recent report from anti-adblock tech firm PageFair, Google lost $6.6 billion in global revenue to ad blockers in 2014. The rise of ad blocking is becoming quite problematic for digital media companies, with Google so far taking the brunt of it.
The $6.6 billion accounts for 10 percent of Google’s total revenue for last year. PageFair used Google's own revenue numbers as well as market data from research companies eMarketer and comScore to predict Google's total potential ad revenues from YouTube, search, AdSense, and DoubleClick. AdSense and DoubleClick are Google’s display advertising properties.
"This is a relatively small sum for a global corporation with revenues of nearly $60 billion, while being a huge cash injection for a fast-growing adblocking startup in Cologne,” PageFair wrote in a blog post. “It is not credible that these funds are simply being spent on the administration of the acceptable ads program. Instead, they are presumably being reinvested in the future development of adblocking ... Although paying Adblock Plus may recover some short-term search engine revenue, it also tightens the adblocking stranglehold on the remainder of Google’s revenue."
Adblock Plus is one of the most popular ad blockers of the moment, and the company PageFair referred to regarding its $6.6 billion figure for Google. The adblocker provides internet companies with the chance for their ads to be whitelisted should they meet an "acceptable ads" policy. Acceptable ads include what ad blockers consider non-intrusive, such as sponsored search links. Yet according to The Financial Times, bigger digital advertising companies such as Google, Microsoft, Amazon, and Taboola must pay Adblock Plus substantial fees — up to 30 percent of additional ad revenues if their ads weren’t blocked.
Google’s lost revenue would have been much higher if not for the digital juggernaut’s whitelisting deal with Adblock Plus, which excluded search ads from the ad blocker’s filter. Google reportedly paid Adblock Plus $25 million to exclude search ads, but subsequently “saved” $3.5 billion in 2014.
Doubleclick and AdSense got “the worst of it,” and together lost Google $2.1 billion globally in 2014. YouTube, in comparison, lost $675 million in 2014 due to pre-roll ad blocking.
“The actual global adblocking rate is probably about five per cent, while the percentage of adblocked dollars is much higher,” Pagefair CEO and co-founder Sean Blanchfield told Mobile Marketing. “There is very low adblocking among many non-western countries, where access is primarily mobile, but where the ad spend is lower.”
Neither Google nor Adblock Plus have commented on the PageFair report at this time.