Ad blockers are latest challenge to news media revenue


In addition to having to prove the value of mobile as an advertising channel, the mobile advertising industry is facing a number of challenges right now to secure more budget from advertisers so the massive imbalance between user time spent in the channel and the proportion of ad spend that goes to it is redressed.

Until recently, there were three key issues to which advertisers were seeking answers:

The first was viewability: When my ad is served on a mobile site or in a mobile app, how likely is it to be seen?

The second was fraud: If it is seen, how likely is it to have been seen by a human being, which is good, or by a bot, which is very bad, especially when I’m paying for the impression?

The third issue was in regard to brand safety: Assuming my ad is viewable, and that when it’s viewed, it’s viewed by a human and not by a bot, is it appearing in a place that I’m happy for it to appear? For example, is it on a legitimate site or in a legitimate app that the average man or woman on the street would be happy to be associated with, as opposed to one containing porn, violence, or other unsavoury content?

Now to this unholy trinity of mobile ad issues has been added a fourth: ad blocking. In essence, if my ad is destined for a brand-safe environment where it can be seen by humans, do any of those humans have software installed on their phones that will prevent the ad from being served?

If viewability, ad fraud, and brand safety are pressing issues, ad blockers are arguably more pressing still. According to one report from anti-ad-blocking tech firm PageFair, Google alone lost out on US$6.6 billion in revenues to ad blockers in 2014.

While the fuss around adblockers is not new, it has taken centre stage in recent weeks following a piece in the Financial Times in May concerning an Israeli firm, Shine. According to the report, the company was in talks with a number of operators to deploy its mobile ad-blocking solution at their data centres, effectively deleting any display ads served over the operator’s mobile data connection (though ads would appear when the user was browsing on wifi).

Then, at Apple’s recent Worldwide Developer Conference, the tech giant announced that when iOS9 makes its bow later this year, it will give users the ability to block “cookies, images, resources, pop-ups, and other content” (i.e. advertising). That’s when the user is browsing content on the Web using the Safari browser, not in-app. Apple may be many things, but it’s not stupid; it’s not going to turn down its share of all those in-app advertising revenues.

There is some confusion caused by the fact that different ad blockers block different types of ads (e.g. display, search, video, native) and whether they can block ads on the Web only or in-app too, depending on where in the network they are inserted. Given this, Google seems to have the most to lose from a world where ad blocking is the norm, as evidenced by those Pagefair figures.

But news publishers should be equally concerned. One mobile sales chief at a well-known UK newspaper recently conceded that it was the issue currently causing his team the most cause for concern.

Personally, I have a sneaky feeling that if ad blockers do look like they are becoming the norm, publishers and app developers will be forced to spell out what the mobile advertising value exchange really means – if you aren’t prepared to look at the ads, you will have to start paying for most of the stuff you currently get for free – and consumers will be pretty quick to switch them off.

For the moment, though, all the industry can do is keep watching to see how this latest threat to ad revenues plays out.


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