Ad-blocking apocalypse may not be as bad as industry feared
Blocking mobile ads remains uncommon because there is no widely available tool for smartphone browsers and apps, while the rate at which new users install desktop ad-blockers in some major countries has stagnated or dropped in the past few months, data from German media trade group Bundesverband Digitale Wirtschaft reveals. Widespread use of ad-blockers in Germany suggests its activity can be used to gauge what's to come in the US.
News from the ad blocking front has given publishers and advertisers little reason to be hopeful over the past few years.

Report after report has traced the software’s growth in popularity as internet users lose patience with clunky and intrusive online ads, and the tools to shut them out become increasingly user-friendly.

SEE ALSO: You may soon be able to pick and choose the online ads you see

But there are now a few signs that enthusiasm over blocking ads may be finally ebbing, and some in the ad tech industry are hopeful that the tides may start to turn away from the trend in the coming year.

For one, some data shows that the rate at which new users install desktop ad blockers in some major countries has grown stagnant or even slightly dropped in the past several months. Meanwhile, the mobile ad blocking apocalypse over which industry pundits had fretted endlessly in the first few months of 2016 never really came to pass.

The market has yet to offer an effective, widely available tool for blocking ads across smartphone browsers and apps, and mobile ad blocker usage remains, by most accounts, negligible in Western countries.

Should they continue to trend in the same direction, these stats seem to suggest that while ad blockers will probably always be popular among certain circles, the craze may never reach the crisis proportions many in the industry feared.

“I don’t know if I’m overstating this, but I feel like the blockers lost 2016,” says Eric Franchi, co-founder of the ad tech firm Undertone.

That said, a slowdown in ad blocker growth is not to be taken for granted. It’s easily possible that a mobile ad blocker might hit upon the right technology to reach a mass audience at any time ( the appetite is certainly there (opens in a new tab)), a development that would likely hobble the business prospects for many online industries.

But for the time being at least, beleaguered publishers finally have some glimmers of hope.

Reaching a plateau

The most notable indicator of slowing growth comes from Germany, a country where ad blockers are believed to be especially popular.

Reports(opens in a new tab) from the German media trade group Bundesverband Digitale Wirtschaft show instances of blocked ads on desktop pages declined by fractions of a percent for three consecutive quarters last year.

Because of the country’s particular predilection towards ad blockers, many in the industry look to the situation Germany as a gauge of what’s to come in the United States. Around 27 percent of Germans online are estimated to use ad blockers while only 18 percent of Americans do so, according to a report from Adobe and anti-ad blocking firm PageFair.

The country has also served as ground zero for some of ad blocking’s fiercest legal fights. In the past couple years, German publishers have brought forth a series of court cases against the German startup AdBlock Plus, the most widely used ad blocking service in the world.

The German tabloid Bild has taken one of the most hardline stances against ad block users, barring anyone with the software installed from visiting its site.

Another report(opens in a new tab) from the industry trade group Interactive Advertising Bureau in Canada found that ad blocking usage in the country seemed to similarly decline in the first half of last year.

And numbers released(opens in a new tab) by the same group in the United Kingdom traced a similar pattern in the same timeframe.

It’s important to note that there is no single universally agreed upon way to measure the prevalence of ad blocking. The most widely cited study comes from Adobe and PageFair, though its methods have been questioned in the past.

Many analysts are still predicting steady growth in the number of ad block users; a report (opens in a new tab) last summer from research firm eMarketer, for instance, projected steady increases in adoption across mobile and desktop in the next year.

But Tom Triscani, CEO of the digital ad firm Labmatik, recently made a case(opens in a new tab) that global ad blocking growth has passed a threshold after which it will grow at a slower pace in years to come. The model estimates the user base will finally stop growing in 2025, at which point about 7 percent of the current online population will use ad blockers.

That narrative also fits with proprietary data collected by the digital marketing firm Intermarkets. Stephanie Snow, the company’s vice president of ad operations, said the firm saw little to no growth in the number of people blocking its ads last year after steady increases throughout the previous three years.

“We haven’t seen new people opting into it. It’s more that the people who are already using it are continuing to do so,” Snow said. “2016 was really remarkably consistent.”

It’s not exactly clear why desktop rates might be slowing. One possibility is the industry could be reaching a point of market saturation where anyone who wants an ad blocker already has one installed. It could also be that continued pleas from online publishers are finally having an effect.

Apocalypse averted?

When Apple first opened the door to ad blockers in the mobile version of its Safari web browser in the fall of 2015, it came amid lots of hyperbolic hand-wringing over a coming ad blocking apocalypse.

But a little over a year later, mobile ad blocking use remains so low in Western countries that PageFair didn’t even bother including it in its report.

Ben Roodman, director of partner development at mobile ad analytics firm AppsFlyer, said he has seen had very little impact from ad blocking in the mobile space.

“I don’t think many people are going out and discovering new ad blockers,” Roodman said. “They’re mostly just going straight to Facebook.”

Much of the reason likely has to do with the lack of effective tools available for blocking ads on smartphones. Most mobile ad blocking apps only work within the Safari browser and very few are able to operate within multiple browsers and apps.

One exception is an Israeli startup called Shine, which has been described as taking a “scorched-earth” approach to blocking. But the company’s controversial network-wide model has run into legal hurdles in Europe and there are no current plans for U.S. expansion.

But the story isn’t the same everywhere. Mobile ad blocking is exponentially more popular in the Asia-Pacific region, where about 93 percent of mobile ad block users are said to be concentrated. There, many low-bandwidth phones in those areas can't handle the data drainage of advertising, and Alibaba's UC Browser app offers a simple way to shut it out.