While the recently launched Apple ad blocking feature casts a shadow on the mobile ad industry, it also brings a release to millions of smartphone users. We`ve all been there, facing mobile websites, overloaded with molesting banners, interstitials and auto-playing videos that drive attention from the page content and slow down the load time. Ad blocking apps have reached top charts hours after launch, proving that users are so tired of aggressive ads, they are ready to proactively stop them and to pay for this opportunity.
Ad blocking has already conquered the web: PageFair and Adobe 2015 Ad Blocking Report shows there are 45 million users in US who utilize ad blocking, and the number is growing year over year. Now it’s time to face this issue on iOS devices. Ad blocking brings positive changes to users, making their web surfing experience more enjoyable. But will publishers, ad agencies and advertisers be agile enough to adapt their strategies and avoid losses? ComboApp is trying to weigh up pros and cons for all parties involved.
There are some serious predictions about disruptive outcomes for publishers. Advertising is the main source of revenue for most of them, especially when it comes to middle-size and small publishers. Adobe and PageFair report claims ad blockers would cost publishers $21.8 billion this year. Web development firm 10up predicts that publishers will lose between 3% and 11% of their ad revenue due to ad blockers within the next eight month. This tangible threat of ad revenue losses makes publishers think about alternative ways of making money:
- Less free web content. It is quite possible that big part of publishers, who now provide free content in exchange of ad displaying, will switch to paywalls. Publishers could also move from the web into their own mobile apps where ads are not blocked or deliver content to social media apps like Facebook.
- The rise of native ads. Mobile ecosystem will make a shift from programmatic display ads to native ads that could avoid blocking. Yahoo chief executive Marissa Mayer says that advertising should be vibrant and content rich in order to keep up with Internet development:
“We are big believers in native ads because they enhance the user experience and are much less disruptive and they are great properties in terms of value they give to advertisers.”
The perspective of switching to less aggressive ad format rises the controversial question: Who should be in charge of distinguishing whether each ad format is “good” or “bad”? Should ad blockers allow ads that track users` activity or have obscure content if they don’t fall into aggressive display ad category? Eyeo GmbH, that created popular desktop ad-blocking tool Adblock Plus, has a practice of letting companies show their “acceptable” ads in exchange for payment. Eyeo is reaching to other ad blocking apps` developers now, including popular iOS-based app Crystal, to establish mutual policy on allowing certain apps to pass filters. Users play an important role in whitelisting ads as well. According to 2011 AdBlock stats, 75% of users either whitelisted sites or allowed acceptable ads. The team of iOS app Crystal says that as much as 71% of their users whitelisted particular websites.
The creator of ad blocking Peace app, Marco Arment, has pulled his app from App Store right after it became a number one paid app in US. Marco said that this success “just doesn’t feel good”, and ad blocking approach should be more complex:
“Peace required that all ads be treated the same — all-or-nothing enforcement for decisions that aren’t black and white. This approach is too blunt, and Ghostery and I have both decided that it doesn’t serve our goals or beliefs well enough. If we’re going to effect positive change overall, a more nuanced, complex approach is required than what I can bring in a simple iOS app.”
The supporters of ad blocking believe that this trend opens an opportunity for all market players to fix the fractured system of intrusive, behaviour-tracking ads. Publishers should get rid of excessive ad placements and third-party networks cookies on their sites. Ad agencies, networks and advertisers should choose more sophisticated and native-looking ad formats to provide users with simple and relevant ads.
There are still time to find the balance between user experience and monetization. According to RadiumOne recent report, there are no significant decrease in the number of ads being delivered on iOS devices after the iOS 9 launch. The ad blocking feature is available on the newest iPhone models only, and will be adopted by users gradually.
Should app developers prepare?
Whereas publishers are the first to experience the biggest impact from Apple ad blocking feature, app developers could prepare to tune their marketing strategy according to new trends ad blocking will bring.
- The overall influence on mobile inventory number won`t be massive, since in-app ad spending outreach mobile web browser dollars nearly 3-to-1. (Source: eMarketer). With ad blocking enabled in Safari, ad spending will likely to shift to apps that offer more controlled experience.
- It`s time to turn from standard programmatic ad format to native-looking ads, that doesn`t look like ads at all: content rich ads, simpler and more transparent formats.
- Targeting matters even more, since relevance increases the advertising experience. Marketers need to provide relevant ads in terms of geo location, app category and demographics to engage potential users.
Eugenia Dychko, Content Manager