Carrier intervention into ad blocking: Are the rewards worth the effort?

11/08/2016
Blog posted by Tej Rekhi
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Tej Rekhi AVP, Programmatic Product Strategy at Sizmek writes about ad blocking and questions whether it's worth the mobile providers effort.

Ad blocking has been all over the press in recent months. The trouble is that it’s popular with consumers, and consumer popularity always carries with it a business opportunity.

To capitalise on this sentiment, mobile carrier Three is running a trial where consumers can opt-in to have all ads on their mobile devices blocked for an entire day. This kind of network-level ad blocking has advertisers, agencies and publishers around the world concerned, especially as mobile becomes the predominant way to reach consumers online. Were it to take hold, it could challenge mobile’s position as an ad channel.

Fortunately, this doom and gloom scenario is an overreaction. While carriers might run experiments to determine their public stance on ad blocking, there’s little reason for companies to deploy this strategy long-term, both in the UK and abroad. It’s simply too difficult for them to pull off successfully, and while there might be profit for the wireless carriers, the rewards may not be worth the effort. 

Carrier-level, or network-based, ad blocking is designed to identify ads on a network level and block them before the impressions reach the consumer. This is different from desktop ad blocking, which happens at the browser level, and not via the service provider. However, identifying ads isn’t exactly easy for the networks, because the majority of mobile internet use takes place within apps, making it that much harder to see the ads and block them. This is why the walled gardens are unmoved by the ad blocking hysteria – both companies deploy their advertising within the basic structure of their apps. It would be difficult for any ad blocker, even at the network level, to filter these ads out. This is a bigger issue on mobile web for consumers who are consuming ad-supported content on their devices.

Another challenge is the prevalent use of WiFi. If a carrier rolls out network-level blocking, it could only prevent ads when the device is using carrier data to access the internet. In countries that carry high data fees for mobile plans, many consumers choose to connect their devices to WiFi signals whenever possible. In 2015, the average consumer used 1.8 GB of data a month. When WiFi is factored in, that number increases by a multiple of 5, with Apple iPhone users averaging 8.9 GB of data over WiFi connections. That leaves less than 17% of the time accessing the internet via the network itself, on average. And this trend is replicated in the UK – with customers on Three’s network using an average of 5GB a month. Other markets, especially in Asian nations, are even more data sensitive. If wireless networks were to offer ad blocking, the consumer would experience it in somewhat irregular intervals. Perhaps they’d have ad blocking during a commute, but not while using the WiFi signal at home or at work.

The final challenge is perhaps the trickiest of all, and that’s the question of who in the mobile advertising ecosystem is given the control to decide if, when, and which ads get through to consumers. Verizon owns AOL, which depends heavily on advertising revenue. This creates a clear conflict of interest. Were Verizon to deploy network-level ad blocking, they’d lose the revenue on their AOL web properties. While they could theoretically block all ads except those on their properties, this act would be poorly perceived by the wider industry. 

It also raises even more difficult questions of ethics because, as Slate notes, carrier-level blocking won’t necessarily end mobile ads, but “will change the calculus of who pays, and how.” It is entirely possible that carriers would choose to filter which ads get through and which don’t, depending on content, and whoever is willing to offer incentives to those controlling the access point to consumers. Would cigarette ads be deemed inappropriate? Would charity ads make it through? These are viable questions, but they’re more work than they’re worth. There’s no reason for Verizon to tackle these thorny issues when they can avoid them altogether.

The ad industry may still be nervous of the growth in ad blocking, but carrier-level ad blocking isn’t the doomsday scenario it has been represented to be. We’ll likely see different wireless networks around the world experiment with the idea throughout the year, under the auspices of its consumer benefits, but there’s no reason to believe that it will stick with the major providers. The amount of work is simply too great, the chances of success are too low, and the incentive is too miniscule for this to take hold.

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