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Growing popularity of ad-blockers threatens mobile websites

AFP-JIJI

Mobile websites face a new threat as millions download ad-blockers to their phones and tablets, removing pesky ads but potentially wiping out billions of dollars in advertising revenue.

Close to 200 million downloads of ad-blocking software had taken place by the middle of the year, according to research firm PageFair, but only 1.6 percent of the blocking was done on mobile devices.

That could be changing as mobile ad-blockers become increasingly popular across the globe, particularly after Apple’s high-profile move to incorporate it directly into its latest iPhone and iPad operating system, iOS9.

The software tends to be cheap and effective. Quickly installed, it reduces the clutter on web pages, speeds up performance and spares users from some of the click-bait many find hard to stomach.

“When people are even willing to pay to stop adverts, it gives you an idea of how fed up they are,” said Hicham Berrada, head of France de Teads, a video advertising firm.

While the Chinese government trawls websites for politically sensitive content, they remain littered with pop-up advertising, forcing millions to buy apps, such as 360 Mobilephone Guard.

In Hong Kong, mobile ad-blockers Purify Blocker and Crystal recently entered the top 30 paid-for iPhone apps.

A study by Adobe and PageFair in August said the losses for websites that rely on advertising could be huge — totaling an estimated $21.8 billion (€19.3 billion) this year and rising to $41 billion in 2016.

But few mourn the loss of nuisance publicities, with Hong Kong tech site Unwire.hk recently promoting the blocking apps even though the magazine itself relies on advertising revenue.

“As an employee of Unwire, writing this tutorial does not do good to the boss’s livelihood, but I also understand some people do not have unlimited data plans and it’s a pain to be receiving data-consuming ad banners,” said reviewer Tim Yan.

There is particular concern that Apple’s promotion of ad-blocking may bring it into the mainstream, where once it was reserved for more tech-savvy users.

“It’s dangerous because it democratizes ad-blocking and we know how good Apple is at making these things simple for users,” said Berrada.

Apple has little to lose, given that it does not rely on advertising revenue in the same way as digital competitors like Google and Facebook.

As a result, Google has been more reluctant to embrace ad-blocking apps, although some third-party developers are offering them for Google’s Android mobiles, with one app boasting more than half a million downloads.

“Google doesn’t make it easy because it makes most of its money from advertising,” said Silicon Valley analyst Rob Enderle.

“If advertisers get the sense everyone is blocking ads, they are going to stop funding content,” he said.

“There is a big concern. A lot of publishers can’t take another re-adjustment in ad revenue. The folks who make the primary money on advertising are starting to squawk with concerns.”

Digital media advertising had been forecast to grow 15.7 percent in 2015, according to analysis agency Carat, but that could soon look like a peak.

“We were in an extremely favorable situation because mobile opened up a huge range of functions that were not available on the web,” said Sophie Poncin, head of an Internet advertisers’ union in France, highlighting the particular value of GPS positioning for advertisers.

In an industry in which creative destruction is the norm, the ad makers are already reacting to the new environment and calling for change.

On Tuesday, Germany’s biggest newspaper, Bild, shuttered its online service to users of ad-blocking software. Readers will be asked to switch off the function or purchase a monthly subscription that is nearly free of advertising.

Its owner, media giant Axel Springer, calls the business model of ad-blocker services to be unlawful, and has taken one of the services to court.

The Bild website is run with a “freemium” model, with some content free but some stories, pictures and exclusive interviews subject to a charge.

Berrada’s firm recently published a manifesto urging less-annoying ads: an end to pop-up videos that fill the whole screen and give users the option to skip ones they don’t like.

They are also appealing to users to recognize the importance of advertising in keeping the Internet free.

“With television, people understand perfectly well that advertising finances private channels,” said Poncin.

“We never took the time to explain to a user how everything works.”

  • GBR48

    Mobile isn’t like desktop. Per-Mb charges for data plans and limited screen sizes preclude excessive advertising. The ad-supported model is dead for mobile. Deal with it.

    Google did the planet and the industry a disservice when it altered default Google search rankings to promote mobile content, rather than using its industry dominance to divide the two, pushing for a de facto standard of using //www. for desktop (which freemium can use) and //m. for mobile (which it cannot). //m. is used by some sites, but it has not become universal. Instead, perfectly good sites that work on desktops have been redesigned for mobile and now work badly on desktops, which is ridiculous.

    There is no change to mobile. There is a change to using mobile and desktop, and every site needs to accommodate both.

  • GBR48

    Mobile isn’t like desktop. Per-Mb charges for data plans and limited screen sizes preclude excessive advertising. The ad-supported model is dead for mobile. Deal with it.

    Google did the planet and the industry a disservice when it altered default Google search rankings to promote mobile content, rather than using its industry dominance to divide the two, pushing for a de facto standard of using //www. for desktop (which freemium can use) and //m. for mobile (which it cannot). //m. is used by some sites, but it has not become universal. Instead, perfectly good sites that work on desktops have been redesigned for mobile and now work badly on desktops, which is ridiculous.

    There is no change to mobile. There is a change to using mobile and desktop, and every site needs to accommodate both.

  • thedudeabidez

    ““If advertisers get the sense everyone is blocking ads, they are going to stop funding content,” he said.

    Except that the vast majority of online advertising already does not “fund content”, all too often it funds platforms that steal content from elsewhere and take all the advertising money that said content drives to their site, sharing nothing with the people who actually created the content. Gogle, through Ad-sense, makes most of its profit through doing exactly that, so it’s no wonder they don’t want to allow ad-blockers on Android.

    Yes, there are legitimate media sites like Bild or the Japan Times that also rely on advertising revenue as part of their business model. But given the vast number of pirate music, movie, manga, and even news aggregating sites that are leeching other people’s work and sticking ads on it, ad-blocking should be viewed in a positive way. The disastrous effects of withholding advertising from these pirate businesses is worth any disruptive effect it may have on the legitimate content creators. Because in the end, once the freemium model has been destroyed, the people with content still have something to sell, something that people want, whereas the parasite sites that rely only on advertising driven by stolen conten will cease to exist.