Ad Blocking Set To Decimate Mobile? Not So Fast

data centerA series of developments over the past week have given rise to a narrative that mobile ad blocking represents a large new threat to publisher revenues.

Two mobile ad-blocking products had their debut: one from category leader Eyeo, which produces the Adblock Plus (ABP) software, and another from Shine, an Israeli company with a cybersecurity background.

A Financial Times report created more concern for advertisers by claiming, through an anonymous source, that European mobile carriers are working with Shine to preinstall its ad blocking software on mobile phones and data centers.

Mobile Armageddon? Maybe not.

Of the two threats, Shine seems the greatest. While Eyeo’s ABP is the most widely adopted desktop ad blocker, it faces hurdles in mobile: While app use proliferates, it can’t strip out in-app ad experiences. In 2013 APB‘s Adblock for Android was booted from Google’s Play Store for interfering with other apps.

Ben Williams, communications and operations manager at ABP, doesn’t dwell on this setback. “I'm cautiously optimistic that we'll be allowed to stay in the Play Store, because whereas Adblock for Android was an operating systemwide ad blocker, this is just a browser with ad blocking baked in,” he said.

Since launching last week, the company had more than 380,000 downloads. That's not too shabby, but the product is inherently more limited than a desktop browser plug-in. According to eMarketer, mobile web browsing will account for less than 30% of mobile ad spend in 2015.

By contrast, an estimated 71% of mobile ad spending is in-app. While there’s an ABP app that enables limited in-app ad blocking, it’s only available from ABP’s site.

Additionally, mobile platform providers don’t assist with mobile ad blocking. ABP claimed its products have been removed or obscured from Play Store results, even when searched for by name. Google can technically keep the download available and still make it difficult to find.

But while Google can easily handle a single ad-blocking software provider – especially when it relies on Google’s own store for distribution – a European mobile carrier with upward of 40 million users is another story entirely.

It’s no surprise this story is unfolding in Europe. Google actually has higher market share in Europe than in the US, and ad blocking is easier to install for Chrome than Firefox.

The numbers are hazy, as the most cited studies on ad blocking were conducted by companies that sell themselves to publishers as anti-ad-blocker solutions, such as Secret Media’s report from 2014. But the evidence is clear that European adoption has soared well beyond ad-blocking use in the US.

The Secret Media study confirmed the commonly held view that ad blocking affects 5-10% of American users, whereas European nations like Germany, Austria and Hungary face ad-blocking rates of 20-25%. Williams said those gaps are widening every day: “We’ve seen higher downloads in Europe, and those rates are expanding. There’s the hotspots, like Germany, but we’re seeing that the places that are catching up in adoption rates are in Europe too.”

While no European mobile telcos have confirmed the FT's report on plans to preinstall Shine on devices, the whole field has taken a collective shellacking from a media industry that is hugely invested in the future health of mobile advertising.

Shine CMO Roi Carthy told AdExchanger his startup is in talks with numerous worldwide carriers, and that they “are eager to bring this service to their subscriber base and we believe adoption will be enthusiastic.”

He also noted that the carriers’ “legal teams are involved as soon as Shine walks in through the door.”

If the carriers succeed in throttling ads for a large fraction of European mobile users, it will be with the backing of European legislators, who are increasingly focused on thwarting Google's dominance.

Google, for its part, seems girded for battle. A spokesperson told AdExchanger:

People pay for mobile Internet packages so they can access the apps, video streaming, webmail and other services they love, many of which are funded by ads. Google and other web companies invest heavily in developing these services – and in the behind-the-scenes infrastructure to deliver them.

Beyond the global politicking of mobile operators pushing back against Google’s slice of mobile ad revenue, consumer experience issues are at stake. Both Shine's Carthy and Williams claim ad blocking increases browsing speed and lowers data usage – a cost concern both for mobile carriers and users.

Williams compared mobile’s current advertising environment to the early days of desktop, when pop-ups and deceptive ad practices (such as hitting an “x” to close an ad and having it direct you to a new page), were still relatively commonplace.

“Anecdotally, I was on a mobile browser and saw three identical, screen-sized ads on the same page,” he said. “And you’ll get full-screen ads where the x-out is placed out of reach from your thumbs. Those aren’t the kinds of things you’d currently see in desktop, outside of the worst websites.”

Carthy echoed those sentiments, calling mobile ad blocking a natural next step in policing the system.

“Consumers are making their dissatisfaction with ad tech clear by their adoption of ad blocking on desktops," he said. “We're simply bringing this same functionality to mobile.​”

 

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