Widely Cited Ad Blocking Study Finding $21.8 Billion Loss Is Incorrect

Sept. 6, 2015

Supply and demand were purposefully overlooked, leading to larger number.
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In recent weeks, multiple news outlets — including The New York Times, Fortune, and The Wall Street Journal — published stories based on a study that claimed publishers will lose $21.8 billion dollars this year due to ad blocking.
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The study — conducted by Pagefair, a company that makes money by helping publishers show ads to people with ad blockers, and Adobe — contains a fundamental methodology error that undermines its conclusions.
Specifically, the study ignored the law of supply and demand. To get to the $21.8 billion dollar figure, it assumed that the blocked ads, if added to the overall pool of ad inventory, would command the same rates as those in a market without them. But in a real world situation, if ad blocking went away, the market would flood with an increased supply of ad inventory, dropping rates for all ads and leading to a much smaller loss figure than $21.8 billion.
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A word about ad blocking: the term may be a bit of a misnomer. The technology doesn’t “block” existing ads but rather prevents them from ever being served. Advertisers pay for ads when they show up on a web page (called an impression) after being served. So when an ad is “blocked,” the advertiser doesn’t waste any money, but rather doesn’t spend it. This cash remains available to spend on a smaller pool of inventory. 
https://www.buzzfeed.com/alexkantrowitz/widely-cited-ad-blocking-study-finding-218-billion-loss-is-i?utm_term=.dc7NZGRR1O#.myXapOMMXo