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Pub­lish­ers and ad­ver­tis­ers feel threat­ened by Ap­ple’s move to en­able ad-block­ing tools on iOS, but shouldn’t they just make bet­ter ads?

Mac Format - - CONTENTS -

“The move to block ads on iOS could cost Google over $8 bil­lion per year”

For the first time, iOS lets users in­stall soft­ware that blocks ads ap­pear­ing in the Sa­fari browser. That’s great for users and mobile car­ri­ers at­tempt­ing to slash the band­width that’s cur­rently wasted on ads, but it rep­re­sents a huge chal­lenge to the ad­ver­tis­ing and pub­lish­ing in­dus­tries.

Web­sites make money by at­tract­ing peo­ple with good con­tent and then get­ting paid for ad­ver­tis­ing placed around that con­tent. Ad block­ers aren’t new, of course – PageFair says that even now only 1 in 20 in­ter­net users on PC or Mac use them, but pub­lisher fear Ap­ple’s dom­i­nance of mobile ad con­sump­tion could sig­nif­i­cantly im­pact the bot­tom line. That’s be­cause de­spite its rel­a­tive mar­ket share in com­par­i­son with the An­droid plat­form, around 75% of global mobile ad rev­enue was gen­er­ated by iOS de­vices in 2014.

Industry chat­ter

The move was widely dis­cussed at a New York ad­ver­tis­ing industry ex­hi­bi­tion last month. “Peo­ple who are cre­at­ing con­tent need to make money”, Sandy Pel­land of MomLifeTV told the New York Post. “If you are a medium or small­sized web­site op­er­at­ing on very tight mar­gins, this could make or break the busi­ness”, said

Stephen Ch­ester of the In­ter­ac­tive Ad­ver­tis­ing Bureau (IAB), who warned that tra­di­tional print­based news or­gan­i­sa­tions were at par­tic­u­lar risk.

The industry will need to raise its game in­clud­ing de­vel­op­ment of more en­gag­ing, less in­tru­sive ads to con­vince con­sumers they don’t need to use ad block­ers. Ear­lier this year, Google CEO, Larry Page, told share­hold­ers, “The industry needs to do bet­ter at pro­duc­ing ads that are less an­noy­ing and that are quicker to load”.

Ads im­pose a big drain on data us­age, im­pact­ing con­sumers and car­ri­ers alike, with cook­ies and graph­ics con­sum­ing huge chunks of band­width. As a case in point, The New York Times re­ported that us­ing a mobile ad blocker on Sa­fari de­liv­ered a 21% in­crease in bat­tery life, “sig­nif­i­cantly low­ered” data us­age and re­duced page load­ing times.

Mea­sur­ing qual­ity

It seems in­evitable the industry will spawn whitelist­ing schemes (such as the Ac­cept­able Ads pro­gram, ac­cept­ableads.org), which is free for small- and medium-sized sites and blogs to en­sure their ads – which must meet cer­tain qual­ity cri­te­ria – are not blocked. This means users can con­tinue to sup­port their favourite web­sites with­out be­ing sub­ject to poor-qual­ity, poorly-tar­geted ad­ver­tis­ing. In­de­pen­dently-de­vel­oped ad blocker, Crys­tal, even lets users de­fine their own white lists, em­pow­er­ing them to choose to ac­cept ads from sites they sup­port.

“It is tragic that ad block users are in­ad­ver­tently in­flict­ing multi-bil­lion dol­lar losses on the very web­sites they most en­joy. With ad-block­ing go­ing mobile, there’s an em­i­nent threat that the busi­ness model that has sup­ported the open web for two decades is go­ing to col­lapse”, PageFair warns.

Un­der­min­ing Google

Ap­ple’s own iAds ser­vice will be un­af­fected by its con­tent-block­ing tech­nol­ogy. Th­ese ads only ap­pear in apps, rather than in Sa­fari. Ap­ple may even ben­e­fit as it places iAds around con­tent culled from across the web in its own News app.

As­sum­ing ad agen­cies and ad­ver­tis­ers don’t up their game, Google is likely to feel the im­pact. 90% of its $66 bil­lion rev­enue in 2014 came from ad­ver­tis­ing, 18% from mobile search (around $11.8 bil­lion). With three-quar­ters of mobile ad­ver­tis­ing rev­enue gen­er­ated by iOS de­vices, the move to block ads on that plat­form could cost Google over $8 bil­lion per year.

Ap­ple’s con­tri­bu­tion to mobile ad rev­enue may force ad­ver­tis­ers’ hands, even though the use of ad block­ers has been on the rise for a while, even be­fore iOS 9.

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