News

POV: The rapid growth of ad blocking

Mindshare Point of View:

Background

At their developer’s conference on Monday, Apple was the latest company to reveal they were giving users the option to block ads on iPhones and iPads as part of the new iOS9 operating system upgrade. This was not announced on stage, but in the documentation they released to developers after the event.

Up until now, ad blocking has been associated with desktop usage, but given Apple’s announcement and the continued growth in smartphone penetration globally and the fact data access is not free, this could all be about to change. Notably this only impacts mobile web and not applications, since iAd only delivers ads in app, iAd will not be impacted by this and they can expect to see an uptick in media dollars.

Details

As well as Apple, other big mobile players have been plotting to block advertising across their networks. In Europe, a number of TELCO operators are rumoured to have been in conversations with Israeli start-up Shine who claim that ‘[…] tens of millions of mobile subscribers around the world will be opting in to ad blocking by the of 2015’. Shine also stated that consumers are paying for this because delivering a mobile ad experience and video eats into data plans.

One of the most popular blockers, AdBlockPlus, claim to have reached over 300 million downloads of their software globally. The company acknowledges being paid by publishers who agree to comply with their ‘Acceptable Ads’ initiative, in effect stripping away all interactivity from formats and displaying simple, static GIF banners.

A report published last year by PageFair and Adobe shows a 69% global growth in ad blocker usage between 2013 and 2014. In some markets, more than 24% percent of the total population had an ad blocker installed on their computers and in countries like Japan, Spain, China and Italy the use of ad blocking software has seen year on year growth of as high as 134%.

The report also shows that one of the key factors in users downloading and installing ad blockers is intrusive formats like overlays & pop ups. However, it doesn’t stop there, as the latest software available doesn’t just block display banners, it also blocks everything from video to paid social, and even paid search may suffer.

Implications

The growing uptake of ad blockers across desktop, tablet and mobile is forcing digital media owners and publishers to reconsider their commercial ad models or negotiate new relationships with the ad blockers themselves.

Norwegian webpage tek.no was one of the first to tackle the issue of users blocking ads on their site (www.tek.no is Norway’s most popular sites writing about consumer technology). Some years ago they experienced a major challenge with more than 50% of their users having ad blockers installed, which meant they were unable to make money from online advertising. The solution was to implement an ‘ad block-wall’ which forced their users to either pay for the content or whitelist tek.no (allowing ads to be shown). Luckily for tek.no, this proved to be a successful move.

Due to ad blocking, new companies are emerging to provide solutions to consumers in the form of incremental data on your plan if you engage with the brand. Aquto, a company that is based in the North America, but expanding globally, is working with two of the major carriers in the US to provide free data if consumers engage with your brand. For example, watch a video and receive 50MB on your plan.

From a Mindshare point of view, ad blocking is an ongoing threat to the digital publishers we trade with, and should join the list alongside viewability and ad fraud of growing problems that need to be addressed.