Digital advertising is thriving—but so is user resistance. For every innovation in format or targeting, there’s a growing population of consumers pushing back, demanding control, and filtering ads. One thing is clear: success in this space increasingly depends not just on reaching audiences, but on reaching all of them, especially those choosing to filter out ads.
Digital advertising's new highs: Growth across formats
2024 set a new bar for digital advertising. According to the IAB/PwC Internet Advertising Revenue Report, total internet ad revenues hit $258.6 billion—up 14.9% year over year. Growth wasn’t just across the board, it was strategic:
- Video emerged as the fastest-growing format, with a 19.2% YoY increase, totaling $62.1 billion and now making up 24% of total ad revenue.
- Search and display rebounded significantly, with search growing 15.9% and display up 12.4%.
- Retail Media Networks (Commerce Media) saw advertising revenues surge by 23% YoY, reaching $53.7 billion.
But in the race toward innovation, there’s a blind spot that marketers and retailers can’t afford to overlook.
The blind spot: 400 million ad-filtering users
While the industry celebrates rising revenues and evolving formats, it often ignores an uncomfortable truth: over 400 million internet users globally are actively filtering ads. This means that these consumers, regardless of ad spend or creativity, might never see what brands and retailers are pushing.
This reality raises a pressing question: what’s the ROI on high-engagement formats like digital video or dynamic retail placements if a substantial, tech-savvy audience has opted out entirely? Imagine pouring billions into digital video innovation only to realize that a sizable, growing segment of the internet population is completely unreachable through traditional ad placements.
The gap between spend and visibility is widening—and it’s especially problematic for retail media, where first-party data and attribution precision are supposed to drive meaningful outcomes.
Retail Media Networks: A golden opportunity if done right
Commerce media, especially Retail Media Networks (RMNs), represents one of the most promising growth areas for retailers. By leveraging retailer-owned data and offering closed-loop attribution, RMNs are becoming central to omnichannel ad strategies.
Many brands are reallocating spend into these emerging platforms. To keep pace with shifting consumer behavior and signal loss, retailers are broadening their media mix by investing in emerging channels such as RMNs and CTV.
But RMNs face an issue if they ignore ad-filtering users:
- Wasted inventory from ads that never render.
- Distorted campaign performance, overstating reach and ROI.
- Lost brand credibility among privacy-conscious consumers who actively avoid intrusive experiences.
To fully unlock their value, RMNs must evolve to serve this fast-growing, overlooked segment.
Why retailers must consider ad-filtering users
1. Consumers are actively avoiding irrelevant or intrusive ads
The surge in ad filtering isn’t just tech adoption—it’s consumer expression.The aforementioned report reflects a broader demand for privacy-first, user-controlled experiences. This shift is both consumer-driven and regulation-enforced. Ad-filtering users (e.g., those using ad blockers) are a manifestation of this demand.
Statista’s 2025 findings echo this: younger, value-driven consumers are skeptical of traditional branding and more likely to opt out of irrelevant or invasive ads. A strong brand name is no longer enough.
👉 Takeaway: Retailers need to offer high-value, non-disruptive experiences that appeal to these audiences. Ad-filtering users are part of the broader consumer shift away from invasive ads. They are tired of irrelevant advertising, so retailers need to ensure that their customers are only seeing the most valuable content, including what ads they deliver. Acceptable Ads-compliant formats provide a clear path—ads that respect users’ boundaries and still drive outcomes.
2. The mid-market is shrinking—retailers must maximize reach
As consumers polarize between budget and premium brands, mid-tier players face a squeeze. Relevance and reach are more crucial than ever, meaning retailers of mid-market products need to be smart in how they build out their user experience:
- Not deter users, pushing them to use ad blockers
- Capitalize on ad-filtering users who value relevant content and ads
At the same time, display and programmatic channels—vital components of RMNs—are under pressure from signal loss and blocked impressions, much of it due to ad blocking and privacy settings.
👉 Takeaway: To stay competitive, retailers need to reach and maximize every user possible, including those with blockers enabled. That means rethinking blocked inventory as an opportunity, not a loss.
3. Ad blocking is driving the shift to acceptable formats
Ad blocking isn’t just a reaction to bad ads—it’s a force pushing the industry toward better ones. Although ad blockers aren't directly named, the IAB report points to growth in ID-less targeting, contextual ads, and AI segmentation to offset the impact of tracking restrictons—all responses to the same behavioral shifts behind ad blocking.
Statista emphasizes that price-conscious, digitally fluent consumers, especially younger demographics, are increasingly represented among ad-filtering users. And they respond best to value-driven, relevant messaging. They’re quick to abandon traditional brands if not served well.
👉 Takeaway: These segments mentioned above are likely overrepresented among ad block users, and they’re also highly responsive to relevant, value-focused messaging, i.e. a perfect match for acceptable, respectful ad formats. Retailers that embrace them are better positioned to win with future-forward consumers.
4. Retail media publishers are well-positioned to lead
Retail media networks (RMNs) generated $53.7B in 2024, and their reliance on first-party data gives them a structural advantage in the privacy era. With direct control over onsite inventory and access to rich first-party data, retailers can serve Acceptable Ads-compliant formats to users who might otherwise be invisible to advertisers. This gives them direct control over how and when ads are shown, even to users with blockers.
👉 Takeaway: RMNs can reclaim lost impressions and revenue, boost campaign integrity, and offer brand partners and advertisers greater transparency and trust. The infrastructure is already in place. What’s needed is strategic intent to reach beyond traditional visibility.
Case in point: Yahoo and Costco show what’s possible
The recent Yahoo-Costco partnership offers a real-world example of adapting to these industry shifts:
- Privacy-centric advertising: The IAB report emphasizes a shift towards privacy-first, nonintrusive, and user-controlled experiences in digital advertising. Using Yahoo ConnectID, this partnership leverages Costco’s first-party data to enable cookie-less targeting and measurement—exactly the privacy-first model the IAB recommends. This way, they don’t have to rely on third-party cookies.
- Enhanced targeting through first-party data: Statista's report highlights the importance of trust and transparency in consumer shopping behavior. Costco’s member insights allow advertisers to reach and engage valuable segments like Frequent Shoppers and Category Shoppers, creating relevance that aligns with consumer preferences without reliance on invasive tracking.
- Omnichannel expansion: There’s a growing significance of RMNs and their role in the evolving digital advertising landscape. The partnership extends beyond owned platforms, offering broad reach across Yahoo’s premium inventory—delivering both scale and precision.
The Yahoo DSP and Costco partnership not only validates the trends identified in the IAB and Statista reports but also demonstrates actionable strategies for retailers to adapt to the evolving digital advertising landscape. If both companies can build on their current partnership by incorporating respectful ad formats to better target ad-filtering users, they’ll be well positioned to fully meet the expectations of today’s consumers. This proves that effective, respectful advertising is not only possible—it’s powerful.
Strategic recommendation: Adapt now or risk being invisible
Retailers, especially those with integrated ad platforms, should:
- Audit their blocked inventory to understand and estimate what’s being lost.
- Test Acceptable Ads-compliant creatives within existing placements.
- Track performance and engagement with compliant formats to evaluate effectiveness.
- Use ad-filtering reach as a competitive differentiator when courting brand advertisers seeking high-intent, privacy-conscious audiences.
Ad filtering doesn’t have to be a challenge—it can be a competitive edge.
Future-proofing digital advertising
The growth of digital advertising across formats is undeniable. But true success means seeing the whole picture—including the millions of users who are actively opting out of the traditional ad experience. The future belongs to brands and platforms that adapt accordingly and embrace transparency, while respecting user choice.
Ignoring 400 million users is not a strategy. Engaging them, on their terms, is the next frontier of digital advertising.
Sources:
- IAB/PwC Internet Advertising Revenue Report, FY 2024
- Statista+ "The New Consumer Reality" Study 2025
