2016-04-14 09:40:49
Ad-blocking may not quickly spread to smartphones
Mar 26th 2016
AD-BLOCKING is becoming ever more popular on personal computers. According to
some estimates, in a few countries more than a third of internet users now have
the necessary software installed in their browsers. But what has advertisers
and publishers really worried is that ad-blocking could soon make a dent in the
more rapidly growing market for ads on smartphones, which will reach $100
billion this year globally, according to eMarketer, a data provider.
On the face of it, such fears are indeed warranted. Mobile browsers which block
ads on web pages (though not in apps) have become more popular, particularly in
Asia. The operating system for Apple s iPhones now lets users download
ad-blocking software. Most importantly, last month Three, a big mobile
operator, announced that it is planning to install ad-blocking technology in
its British and Italian networks. Its customers will be able to use it to block
ads within apps, too. Other carriers have said that they are looking into
offering such a service. Digicel, which is based in Jamaica, is already doing
so.
But on closer inspection, it is too soon to write the obituary of mobile
advertising, says Dean Bubley, a telecoms consultant. More than half the time,
smartphone users connect to the internet using Wi-Fi, so they will still get
ads even if their mobile operator blocks them. What is more, the
fastest-growing sort of mobile advertising is native , meaning
indistinguishable from other types of content, and sometimes even encrypted.
That makes network-based blocking hard, if not impossible.
Then there are legal and commercial hurdles. Three is planning to let
subscribers opt into its ad-blocking service, which is based on technology
developed by Shine, an Israeli startup. But that may still run afoul of
network neutrality rules, which require that all sorts of online traffic,
including ads, should be treated equally. To be on the safe side, the service
is likely to be offered directly through Shine. Three has given itself a few
months to figure it all out. Other carriers are likely to wait and see how
Three s ad-blocking efforts fare.
Given all this, mobile ad-blocking may not grow much beyond its current level
in the short term. Online publishers interviewed by Joseph Evans of Enders
Analysis, a consulting firm, report that only a few percent of all ads are
getting blocked. Even some consumers with ad-blockers installed on their phones
may still be choosing to let some through.
Yet advertisers and publishers should not get their hopes up too high. The
frustration with mobile ads is growing, and not just because they can annoy. An
increasing worry is privacy: mobile ads are targeted using lots of personal
data, but it often remains unclear how they are being collected and used. If
the advertising industry doesn t clean up its act, ad-blocking on smartphones
may yet grow, albeit slowly, to become as widespread as it is on personal
computers.