The Impact of Ad-Blockers on Product Search and Purchase Behavior: A Lab Experiment

Ad-blocking applications have become increasingly popular among Internet users. Ad-blockers offer various privacy-and security-enhancing features: they can reduce personal data collection and exposure to malicious advertising, help safeguard users' decision-making autonomy, reduce users' costs (by increasing the speed of page loading), and improve the browsing experience (by reducing visual clutter). On the other hand, the online advertising industry has claimed that ads increase consumers' economic welfare by helping them find better, cheaper deals faster. If so, using ad-blockers would deprive consumers of these benefits. However, little is known about the actual economic impact of ad-blockers. We designed a lab experiment (N=212) with real economic incentives to understand the impact of ad-blockers on consumers' product searching and purchasing behavior, and the resulting consumer outcomes. We focus on the effects of blocking contextual ads (ads targeted to individual, potentially sensitive, contexts, such as search queries in a search engine or the content of web pages) on how participants searched for and purchased various products online, and the resulting consumer welfare. We find that blocking contextual ads did not have a statistically significant effect on the prices of products participants chose to purchase, the time they spent searching for them, or how satisfied they were with the chosen products, prices, and perceived quality. Hence we do not reject the null hypothesis that consumer behavior and outcomes stay constant when such ads are blocked or shown. We conclude that the use of ad-blockers does not seem to compromise consumer economic welfare (along the metrics captured in the experiment) in exchange for privacy and security benefits. We discuss the implications of this work in terms of end-users' privacy, the study's limitations, and future work to extend these results.