Mobile Ad-Blockers Posing Threats To Businesses

by CXOtoday News Desk    Oct 12, 2015

ad blocking

Digital advertising is fast evolving, bringing in more opportunities for companies. However, the industry is also threatened by a rapid rise of ad blockers and is creating severe concerns to advertising and mobile firms.

Mobile Internet sites face a new threat as millions of users download ad-blockers to their smartphones and tablets, removing unwanted advertising, but potentially wiping out billions of dollars in advertising revenue. There were close to 200 million downloads of ad-blocking software by the middle of this year, according to research firm PageFair, but only 1.6 percent of the blocking was done on mobile devices rather than computers.

PageFair, a firm that seeks to counter ad blockers, says worldwide usage of ad blockers grew 41 per cent from last year to nearly 200 million people. That’s six per cent of Internet users worldwide. PageFair estimates these tools will block nearly $22 billion in ad revenue this year and $41 billion next year.

Threats to get bigger

The threats to websites are about to get bigger. The ability to block ads, long available on traditional computers, arrived on Apple’s mobile devices with a recent software update, iOS 9. Apps with these capabilities such as Purify Blocker and Blockr are quickly became top sellers. These tools affect only the Safari browser and won’t block ads inside apps such as Twitter, Facebook and Apple’s own News app. Google’s Android system also allows ad blockers in web browsers such as Firefox, as long as they don’t affect unrelated apps.

Many websites already have countermeasures for ad blockers. Hulu, for instance, simply replaces commercials with an unskippable message prompting you to turn your ad blocker off. Or, you can pay Hulu $12 a month to go ad-free. Meanwhile, some companies are paying developers of ad blockers such as Adblock Plus for the right to bypass them. Companies that benefit a lot from search ads, like Google and Microsoft are among some of the noted brands, the Financial Times reported. 

Others are looking to create a smoother experience to get at the root cause of consumer frustration. Apple’s News app, Facebook’s Instant Articles and SnapChat’s Discover are reportedly speeding up online journalism and cut back advertising, while sharing revenue with news outlets.

Ad-blocking firms new role

All this raises questions about the role of ad-blocking companies. Ad blockers streamline the user experience without contributing back to the digital economy, even as they seek to make money by charging websites for the right to nullify their impact. Smaller websites can get a free pass from ad blockers, but only if they let go revenue from video ads or other display ads deemed intrusive, state experts.

Read more: Why Google Should Guard Its Turf In Online Ad Space?

The latest findings from the AOP’s seventh annual Content and Trends Census reveal ad blocking is seen as a threat to the publishing business model (65 percent) – the first time the danger has appeared since the census began in 2006 – with one in five (19 percent) citing it as the most significant problem.

Despite these challenges, the study reports publishers remain positive about opportunities within digital publishing. Over four-fifths of publishers view content marketing as an important area of investment. Mobile continues to attract positive sentiment, with 81 percent and 77 percent respectively considering smartphones and apps / digital editions as key prospects for growth.

According to figures published by the Internet Advertising Bureau (IAB) today, digital ad spend up by 27.5 percent. But this is largely powered by mobile advertising, where revenue has soared by 51 percent, said the research firm.