Does the rise of ad-blocking tech spell doom for ad monetisation in mobile? In a word, no, says Amit Gupta, Co-Founder & President-North America of MEF Member InMobi.
The brouhaha did cause some initial concern and confusion. Could Apple build something that would potentially destroy a $32 billion burgeoning mobile ad business?
The simple answer I come back to, is no.
Ad blocking will only increase the adoption of native apps. This will incentivize publishers to make their apps even better. Furthermore, companies whose revenue is primarily driven by in-app advertising will not be impacted, rather, with rise of apps they stand to only benefit in long term“
There are three key myths surrounding Apple’s announcement that I’d like to address and hopefully clear the air around this ‘adversity’ (pun intended).
Myth#1 – Ad-blocking is automatic and will affect all ads on all mobile websites. That is not how this is set up to work. There are multiple steps a consumer must take to enable the ad-blocking software and the process is destined to be full of friction. No device, by default, will be able to block ads.
Myth#2 – Everyone will block ads. Ad-blocking has been available on desktop browsers for years. As far as we have seen, there hasn’t really been a tangible impact on the desktop ad business because of ad blocking.
Myth#3 – Every mobile publisher will be impacted. Mobile apps are not affected by ad blocking, nor are native ads typically affected by ad-blockers. Here is a quick back-of-the-envelope calculation that should tell us the real story:
- time spent on mobile web = 14%
- Number of people that use desktop ad blockers who decide to install the smartphone variant (assumed) = 10%
- iOS market share (we will assume all iOS users are on iOS9) = 42%
- Therefore, 42% (iOS users) of 10% (all ad-blockers on web) of 14% (mobile web users) = 0.58%
The total expected impact is potentially on 0.5% of the users making me believe this quite a sensation over nothing.
So, where do we go from here?
#1 – Think Native ads: Ad blockers primarily exist to remove obstructive ads such as auto-play videos, obnoxious blinking and animated gifs. According to Adblock plus (link here), the software favors ads that do not distract or obstruct the user from consuming web content. In other words, they are putting users first and policing websites that infringe user experience over revenue potential. Native advertising finely balances between user experience and website’s revenue goals. Qualitatively and quantitatively, native advertising is the right step for publishers of all sizes.
Native advertising uniquely provides:
- Better user experience: Ads that seamlessly flow with the content on the page
- Transparency: The ad format follows the IAB guidelines stating publishers should disclose content as an ad vs. advertiser
- Quality content: Advertisers are encouraged to create beautiful and engaging content versus boring banner images or downsized desktop interstitials
#2 – Think Mobile Apps. 86% of users are engaging through mobile apps vs. mobile web. Not only do the users prefer mobile apps over web, they also offer a high degree of creative flexibility, and allow engagement tools such as notifications to inform or bring users back to the app. With companies like Facebook, InMobi and Nativo focusing on creating the best in-app user experience, there are some groundbreaking ad formats that are guaranteed to be monetization winners.
Ad blocking will only increase the adoption of native apps. This will incentivize publishers to make their apps even better.
Co-Founder and President, North America
Furthermore, companies whose revenue is primarily driven by in-app advertising will not be impacted, rather, with rise of apps they stand to only benefit in long term.
All things said, as the ad-tech industry gains size and status, moves such as this should be welcomed as milestones of maturity – not just by consumers but by publishers too. Here’s to the announcement from Apple heralding a new wave of consumer-focused monetization that is guaranteed to grow the ad-tech industry and instead of shrinking it.