~$6B lost from AdBlock (Publishers) → ← ~$6B lost to AdFraud (Advertisers)

Digital advertising is an ecosystem comprised of three primary figures: Marketers, Content Owners, and the Consumers. Although no one is more important than the other, both marketers and content owners depend on the basic existence of consumers. These consumers practice consumption of both content and the advertising that funds it. This implicit contract has begun to waver in the world of digital advertising. Since consumers have had the available option of blocking the advertising (again, this is what funds the content creation) to allow for “better” user experience in content consumption, it has become increasingly popular with 41% annual growth1.

This growing trend is threatening the ecosystem that comprises ad-tech space. This threat is as important and merits just as much attention and dialogue as ad-fraud; yet we rarely discuss both in the same conversation.

We propose there is a direct relationship between these two issues, and thus the dialogue need to address both issues simultaneously.

Let us start with the raw numbers ( of course !)

$6.3B Ad Spend on Fraudulent Web Traffic.

$5.8B Lost Ad Spend From Ad-Blockers

$43.8B Total Digital Advertising Spend

14.38% of Total Digital Ad Spend Wasted on Fraud

13.24% of Potential Digital Ad Spend Lost From Adblockers

~45,000,000 Ad Block Users in the United States.

Obviously, those numbers are not exact matches, but they are eerily close. There are some basic concepts that inform our position that ad-block and ad-fraud are closely related.

Advertising budgets stay constant or increase over time.

Publishers want their revenues and audience metrics to stay constant or increase over time.

There is a rapidly increasing segment of users employing ad-block.

The practice of content owners purchasing web traffic to boost numbers has increased over time.

More than 50% of purchased traffic is fraudulent2.

The gradual decline in revenue for publishers and content owners due to ad-block fueled the drive to acquire more consumers, most efficiently accomplished via purchasing click traffic. This act, in turn, allowed for the creation of more companies offering click traffic to publishers and at ever diminishing rates per click due to oversupply of traffic suppliers. Somewhere along the way, we all stopped discerning how legitimate a $0.01 click can really be. It’s the very nature of businesses to focus on the end game.

The resulting growth of pageviews and “users” allowed publishers to have more control over “audience scale “ and thus control volume fluctuation , and therefore revenue.

Advertisers continued to buy this inventory based on historical trust in the quality of publishers’ web traffic and audience data. One problem was that these paid clicks returned better ROI’s for publishers since the suppliers of this traffic were forced to differentiate themselves from their competition. This led to bots getting smarter and smarter.

Some industry pundits, (including those of us at Adsiduous) contend that, data-wise at least, bots are better at being human than humans are. They accumulate lots of cookies, abandon shopping carts, and visit a wide range of websites both large and small. It’s very easy for a bot creator to simulate a valuable target audience. Again, this also compensated for the lack of audience data due to ad-blockers.

Candidly, blame cannot be exclusively pointed at either advertisers or publishers. Economics and business bottom-lines are the fuel in this fire. The key is whether we rapidly grow awareness of this trend and address it properly before it’s too late. Failure to do so will result in a painful restructuring where the entire foundation of digital media economics and the free Internet is in jeopardy.

Ad-blocking became popular because consumers wanted to protect their user-experience which was being threatened by bad/intrusive ad-creative as well as the load time of pages due to multiple ad-calls being made. The answer is clear.

THE CONSUMER IS KEY AND MUST BE RESPECTED

Currently, with adblock enabled, a user is essentially non-existent to both marketers and content owners. To prevent the blocking of ads, which fuels the purchase of fraud traffic, we must address the concerns of the consumer!

The current attempts to block ad-fraud have become a Sisyphean task because the dialogue is not taking into account the user experience, the consumer is the cornerstone for both publisher and advertiser businesses. The implied contract between marketers, content owners, and consumers is slowly going to have to change to an explicit one.

To repeat, the potential lost revenues to publishers due to ad-block are indirectly compensated for through ad-spend on fraudulent activity from purchased traffic. The rise of adblock is due to an increasing distaste for bad user-experience on the web; this is correlated with the rise of ad-fraud. So we MUST, as an industry, bring consumer experience into the forefront of the dialogue when discussing the battle against ad-fraud.

Advertisers shouldn’t be funding the ad-fraud world, but right now unfortunately, they are.

The numbers mentioned above are solely for the US and are from public reports published separately by PageFair & Adobe and WhiteOps & DCN.

The estimate for global potential revenue lost to ad-block is $21.8 B.!

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