The effect of ad blocking on website traffic and quality

Ad blocking software allows Internet users to obtain information without generating ad revenue for site owners, potentially undermining investments in content. We explore the impact of site†level ad blocker usage on website quality, as inferred from traffic. We find that each additional percentage point of site visitors blocking ads reduces its traffic by 0.67% over 35 months. Impacted sites provide less content over time, providing corroboration for the mechanism. Effects on revenue are compounded; ad blocking reduces visits, and remaining visitors blocking ads do not generate revenue. We conclude that ad blocking poses a threat to the ad†supported web.

[1]  David P. Myatt,et al.  On the Simple Economics of Advertising, Marketing, and Product Design , 2005 .

[2]  Simon P. Anderson,et al.  Platform Siphoning: Ad-Avoidance and Media Content , 2010 .

[3]  Feng Zhu,et al.  Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers , 2014, Manag. Sci..

[4]  Dirk Bergemann,et al.  Targeting in Advertising Markets: Implications for Offline vs. Online Media , 2010 .

[5]  Avi Goldfarb,et al.  Online Display Advertising: Targeting and Obtrusiveness , 2011, Mark. Sci..

[6]  Avi Goldfarb,et al.  Standardization and the Effectiveness of Online Advertising , 2014, Manag. Sci..

[7]  Catherine Tucker,et al.  Social Networks, Personalized Advertising, and Privacy Controls , 2013 .

[8]  Linli Xu,et al.  Correcting Audience Externalities in Television Advertising , 2013 .

[9]  Felix Oberholzer-Gee,et al.  The Effect of File Sharing on Record Sales: An Empirical Analysis , 2007, Journal of Political Economy.

[10]  R. Preston McAfee,et al.  The Economic and Cognitive Costs of Annoying Display Advertisements , 2014 .

[11]  Lesley Chiou,et al.  Paywalls and the demand for news , 2013, Inf. Econ. Policy.

[12]  T. Mayer,et al.  The erosion of colonial trade linkages after independence I , 2009 .

[13]  Kenneth C. Wilbur Advertising Content and Television Advertising Avoidance , 2015 .

[14]  Avi Goldfarb,et al.  Privacy Regulation and Online Advertising , 2010, Manag. Sci..

[15]  J. Chevalier,et al.  Measuring Prices and Price Competition Online: Amazon.com and BarnesandNoble.com , 2003 .