“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Josh Speyer, CEO at AerServ.
Israeli startup Shine recently made waves in the mobile ad tech world with its ad blocking platform, which enables users to remove ads from the app experience. Shine argues that mobile ads cost users 10% to 15% of data plans, deplete battery life and decrease load times, so users should have the option to block them.
Ad blocking is a user “right,” given the expense of bandwidth for both wireless carriers and users, claimed Roi Carthy, Shine’s chief marketing officer, who also equated ad tech with malware.
The number of active ad blockers grew 70% between 2013 and 2014 to 144 million, according to PageFair and Adobe. At the same, each of the top apps reported by App Annie for 2014 are free and ad-supported, which clearly signals that consumers don't want to spend money on apps.
But the cost of creating and distributing an app is considerable. Consumers don’t want to pay for an app and don’t want to view ads, but they still want to enjoy unimpeded use of the app? I believe that’s simply unreasonable.
Malware: A Just Comparison?
What about that comparison between ad tech and malware? It’s true that there is malware out there masquerading as advertising, but the percentage of malicious mobile ads is extremely small. However, services like Shine and AdBlocker are taking a shotgun approach to ad blocking, enabling users to completely block any and all ads within apps and websites, not just those identified as malicious.
If users don’t want to pay for apps via subscription and download fees, advertising revenue is necessary to support operations and production. Ad-blocking technology is technically stepping in between users and publishers and stealing that revenue. The mission of ad blockers also seems less altruistic when you consider that they also charge ad networks to be whitelisted, or not blocked.
Without advertising, publishers will be forced to find alternative ways to monetize their apps, such as charging higher download and subscription fees, putting up paywalls or integrating ads that can’t be detected and blocked.
Obviously, this is an untenable solution, especially considering recent discussions about net neutrality and the overwhelmingly negative response to the idea of paid access to content. Given the fact that our mobile devices are essentially mini-computers these days, the situation is comparable. So what can be done to alleviate the problem?
The Wrong Approach
If the issue of concern is malware, blocking ads is the wrong approach. It has been shown that blocking ads is less effective at deterring infections on mobile devices than the real-time monitoring offered by services such as Lookout. So even if a user blocks all ads because they are afraid of the very low risk of their devices being compromised, they aren’t even going about that in the best way.
If the concern is simply that users don’t want their app and mobile game experiences interrupted by ads, they should pay the app or site for the privilege of an ad-free experience. As the saying goes, there’s no such thing as a free lunch, and when developers spend significant hours and dollars creating apps, there is no such thing as free content. If users want to use an app, they’ll have to pay for it either with real money or with their time spent viewing an ad.
Unfortunately, the legal aspect of ad blocking is also murky. It is being examined in courts around the world, but many are finding that ad blocking is a legal enterprise and mobile device owners have the legal right to control what appears on their screens. Many in the mobile ad tech world are nervous about the precedents being set, but it is also true that developers and publishers have the right to control access to the content they own.
In the absence of a solution that compensates content creators, the next step will most likely be for apps and sites to block content from users who block their ads, especially if courts continue to side with the ad blockers. They could implement a method to detect when ads are blocked and then take over the page, requiring the user to pay in order to continue viewing the content.
I believe one thing is clear: Ad blocking is akin to theft from marketers and will do far more harm than good to users.