There's no shortage of people who claim they'd pay extra to avoid having to view ads on their favorite site, or anywhere on the Internet. One even took the trouble to suggest how it might work in a recent opinion piece in the New York Times.
But as a new survey shows, it's very unlikely the vast majority of people would be willing to shoulder the real cost of replacing the ad revenues that would be lost--revenues required to keep Facebook,
The survey, conducted last month, used Google Consumer Surveys to ask 5,000 U.S. residents between 18 and 65 how much extra they'd be willing to pay on top of their phone bill to remove ads. Besides those who wouldn't pay a dime, some 14.5% said they'd pay an extra $2 a month, but those who would pay $5, $10, $15, or $20 extra each fall into the single digit percentages.
Clearly there is some demand for paid ad blocking. Problem is, the amount even those few are willing to pay doesn't come close to making up the revenue difference, at least by AppLovin's reckoning.
Applovin, which of course makes money from running mobile ads and so has an inherent interest in showing how necessary they are, calculated that the revenue at which publishers would make the same amount of money they would make with ads is about $15 a month per user for all digital content, and $5 for mobile content alone.
To arrive at those numbers, it took eMarketer's estimates for 2014 U.S. digital ad spending of $50.7 billion and divided it by the U.S. adult population of about 242 million, which yields $17.46 a month--call it $15 to be conservative. Likewise, AppLovin divided the $19.2 billion in mobile ad spending by the 217.8 million U.S. mobile subscribers over 18 to get $7.46 a month and lowered it to an even $5 a month.
And those who earn more are not much more willing to pay up, though more than a quarter of high earners, those who make more than $75,000 a year, in total would pay $5 or more a month. "I would have assumed more folks with higher incomes would have been willing to pay," says AppLovin CEO Adam Foroughi.
Foroughi thinks one reason people don't want to pay to get rid of mobile ads, at least, is that they likely think they aren't all that bad--and sometimes might even be useful. As evidence, he points to a lack of complaints about the ads his company serves to people. "In many ways, the ads are no longer bad experiences," like banner ads and pop-ups that still plague desktop computers.
Mobile ads are often for apps targeted to people using related or complementary apps--other games, say--so they may not be as annoying. Or a sports fan checking out the forecast on a weather app might see an ad for event ticket app
Well, maybe people think mobile ads aren't so bad, though I'm betting people would rather not see most of them if they didn't have to. Just as likely, people are accustomed to not paying anything for content or apps online, or at least not having to pay for an app beyond a few bucks at the initial installation. And they're especially unlikely to want to pay to get rid of something that they've already learned to ignore.
Either way, it seems that subscriptions won't replace advertising for the vast majority of mobile Web content and apps anytime soon.
