Online advertisements provide websites a reinforcing cycle of revenue that allows many to give users free access to content: As sites gain more web traffic, more eyeballs see ads. That generates more revenue for the site, which it uses to develop more content to gain more web traffic. Conversely, when users adopts ad-blocking technology, they do not contribute any revenue to the site, and they lower its incentives to generate more content.
By analyzing web traffic from 2013 to 2016, economic professors Ben Shiller and Joel Waldfogel determine that for every 1 percentage point of a site’s user base that uses ad-block technology, that site’s web traffic decreases by 0.67 percent over time. In the long run, they estimate that if 10 percent of a site’s user base uses ad-block technology (the current average share), this reduces long-run revenue by up to 16 percent.
