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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Ad-blocking and the future of mobile advertising

While scrolling through my phone trying to read the news one morning this week, I almost lost count of the number of ads my eyes glanced at. It’s no doubt that it can often feel quite overwhelming; the level of information fatigue people experience these days is greater than ever before.

Advertising and mobile marketing are at the heart of the modern internet economy. Conflicting interests between users, publishers and corporations have been causing relationship friction for some time now. A recent survey commissioned by the Internet Advertising Bureau (IAB) showed that 22% of UK adults now use ad-blockers. Publishers, at the other end of the spectrum, are at war with these software providers to get their content through, while large communications companies are trying to destabilise the whole model for strategic reasons.

What are ad-blockers and how do they work?

Ad-blockers are applications that remove or alter advertising content on a web page. The types of ads that these blockers aim to prevent include banners, pop-ups and pop-unders, all of which can contain text, images, animations, embedded audio and video. 

The content that is blocked varies from application to application. Some eliminate all advertising on a web page while others specifically disable content that could compromise a user’s privacy and security, which includes tracking activity and browsing preferences. The default and most often used technique is to block the HTTP ad request as it comes through, although some instead block the content on its return journey.

When Apple release iOS 9, they allowed users to install ad-blocking apps on their iPhone. This small feature alone has the power to drastically change things, and the web as we know it might never be the same again. Shortly after iOS 9’s release, mobile ad-blockers quickly became the best-selling software in the App Store

Network blocking

The impact that the interruption of these ads could have on the revenue of publishers and big firms is a hotly contested issue. This topic was debated during the Mobile World Congress (MWC) early this year and, according to the NBC News, Google and Yahoo accused Israeli ad-blocking software Shine Technologies of destroying the relationship between advertisers and consumers.

The above emerged not longer after the announcement by Three Mobile UK of a network-wide ad-blocking move to improve overall network experience. This is a result of a collaboration with Shine, aiming to give customers more control, choice and greater transparency over what they receive.  

Three’s UK CMO Tom Malleschitz mentioned that ads currently account for around 20% of data, depending on usage. The network’s aim is not to eliminate mobile ads altogether, but it’s quite alarming to think that one-fifth of customers' data allowances might be destined to cover ads and content they didn't ever ask for.

The mobile operator ran their network-level ad-blocking trial earlier this year, over a 24 hour period; the aim now is to select a group of customers and ask for over-the-phone feedback. However, in some cases, it took over three months for customers to receive a call from Three, which may have resulted in forgotten or diluted experiences.

Regardless, this move has major connotations for users because network control removes their power and places it in the hands of providers and third parties. This seems to be spreading quite rapidly as UK mobile competitors EE and O2 are also testing the new technology, which indicates network blocking could simply mean a shift in ownership of ad control from the website to the network and its partners.

Network blocking, however, isn’t fresh news – although up until this point it had been limited to desktop computers. French company ISP Free attempted to make a point about internet neutrality by trying to automatically block ads through DSL routers in 2013. However, they were later forced to back down by the French government.

A different approach

In December 2015, City AM became the first UK publisher to implement anti ad-blocking technology as it intended to explain to customers the financial impact of losing out on online advertising. Anyone who visits their website and has ad-blocking software enabled is only able to read the first three paragraphs of any article before being asked to turn it off if they wish to read the full piece.

The results of this move seemed promising. During the course of the trial period, ad blockers were turned off 21% of the time when users were stopped from viewing articles. In addition, readers using ad blockers on the website dropped from 22% before the trial to 15% during.

What comes next?

If mobile ad-blocking continues to thrive, it could rock the boat in a number of ways. Firstly, we could see a rise in the use of ads that can’t be picked up by blockers, such as native ads or pre-roll ads on video content.

Some argue that publishers might move from the web into apps - where ads can’t be blocked and they are able to make apps of their own - or team up with platforms such as Facebook to host and deliver their content. Others have a more optimistic view: they believe that ad-blocking will simply result in better ads. Apple blogger John Gruber, for instance, thinks consumers will choose to ‘whitelist’ less obtrusive ads.

Ad-blocking is indeed a divisive subject. There are clear benefits for the customer – better control over information that gets through, more privacy and a faster experience – however, it also puts in jeopardy the business model of many publishers and large communications companies.

What’s the future of mobile advertising? We might not know the answer just yet, but one thing is certain: a big shift in the mobile industry is already starting to take shape. As it seems, to successfully engage customers, advertisers will need to change their approach and start creating content that the end users seek out, instead of ads that interrupt and annoy them.

About the author

Ella Paludo
Ella Paludo
Ella is an Associate Consultant in the Retail Customer Engagement & Loyalty Centre of Excellence. Her main interests lie in innovation, business development and organisational change, and she is passionate about the Customer Product and Retail sectors.

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