In this study, researcher Vilma Todri wanted to determine if and how ad-blockers affect online consumer search and purchasing behavior. To do so, she analyzed panel data from January 2015 and December 2018. This included online, web-wide visitation behaviors, transaction behaviors and demographics. There were more than 300 million visits during the timeframes studied. Within them, more than 90,000 U.S. consumers made at least one purchase. Approximately 10% of web users studied installed an ad-blocking technology at some point during the observation window. Using a difference-in-differences approach to control for confounds, a two-way, fixed-effects model compared differences in the purchasing behaviors of adopters and non-adopters, before versus after installation of an ad-blocker.
A significant and increasing fraction of internet users has indeed already started employing ad-blockers. However, surprisingly little is known yet about the effects of ad-blockers on consumers. This paper investigates the impact of ad-blockers on online search and purchasing behaviors by empirically analyzing a consumer-level panel dataset. -Vilma Todri (2021)
The results showed that ad-blockers decreased online purchasing behavior by 1.45%, a significant loss. That corresponds to a total decrease of $14.2 billion a year. Clearly, the economic impact of ad blocking goes beyond publishers’ bottom lines. Examining the underlying mechanism of these effects, Todri found that ad-blockers significantly decrease online spending for heavy, online advertisers, as well as unfamiliar brands.
This tendency for consumers to rely more heavily on their own, past experiences with brands could potentially make markets more concentrated over time. The findings also suggest that it might be more challenging for marketers to acquire new, online customers, if or when ad-blockers become more widely adopted.
Read the full working paper here.