DUBLIN: Significant adblock usage by a website's audience can lead to a short-term boost in page traffic, but over the longer term traffic declines as these sites find themselves unable to invest in content, a new study has shown.
In a whitepaper, The Hidden Cost of Adblock, Professor Benjamin Shiller (Brandeis University), Professor Joel Waldfogel (University of Minnesota and the National Bureau of Economic Research), and Dr Johnny Ryan (PageFair), outlined findings derived from research of 2,574 websites over three years.
They reported that traffic typically increased initially as the use of adblocking rose, since users were able to enjoy the site without advertising. And this state of affairs could last for more than a year.
But then traffic stalled and after around 18 months it declined significantly as sites could no longer sustain their investment in content. Overall, average site traffic declined by of 8% over 35 months due to adblock.
This is the "adblock paradox", the whitepaper said: "a paradoxical situation in which an adblock user benefits in the short term by avoiding advertising, but reduces the quality and variety of content available to them over the longer term."
But the effect is not spread evenly: smaller websites bear the brunt of the impact because of the way in which advertising is sold.
Large websites generate the majority of their revenue by selling a small part of their impressions directly to advertisers at a high price, the study noted as it reported that adblocking produced no observable impact on traffic to the most popular sites in the study.
As smaller websites rely on ad networks to sell all of their impressions, however, they have no buffer against the effects adblock.
More specifically, the research found that every 1% increase in adblocked web traffic produced a 0.67% decrease in site traffic for small and medium sites.
"Publishers must listen to users' legitimate grievances about online ads and respond by fixing the problems," said Sean Blanchfield, Pagefair CEO. "Once they have remedied the users' grievances, publishers can choose to serve their ads using technology that adblock companies cannot tamper with."
Data sourced from Pagefair; additional content by WARC staff