The battle between the advertising industry, mobile phone operators, publishers and privacy advocates has reached new heights, with Apple’s decision to allow ad-blocking extensions in its Safari browser sparking fears that the multi-billion dollar mobile ad industry could be about to take an expensive haircut. While third-party ad-blocking apps have been around for a while, few are used on mobile platforms – they are more commonly found on desktop and laptop computers. A recent New York Times article looking at 50 top mobile news websites indicated that of all the data downloaded as part of each web page, more than half was made up of ads. Recent studies of large volumes of mobile traffic from a European telecoms firm has also revealed that a large proportion of the bandwidth used while browsing the internet is in fact consumed by the adverts, trackers and widgets embedded in web pages. In addition to being an annoyance, cluttering up the screen, draining battery life and slowing down the whole mobile browsing experience, many poorly targeted ads are really just another form of spam. But why are mobile ads so inefficient? This is mostly due to the complex ecosystem in the mobile advertising industry. The majority of apps in the popular markets such as Apple App Store and Google Play are free. Many developers provide a small space for advertising to earn some cash from their work. These spaces are populated by ads and ad-broker services, which pass onto the developer a percentage of the profits, as measured in terms of views (known as impressions) and clicks. Earnings are usually paid on impressions by the thousand, so ad brokers aim to maximise the number of ads and their frequency with which they’re displayed on the user’s screen. How the mobile ad ecosystem works. ACM, Author provided There are two major issues in this ecosystem: firstly, the cost to the consumer in terms of bandwidth and energy – and their privacy. Personal data is the main fuel for the advertising industry, and thousands of companies work within the ad ecosystem collecting, tracking and selling data on users and their browsing habits. Second, the fact that the basis of the ecosystem, generating payments through impressions and clicks, can be gamed by bots – click fraud – generating huge, unwarranted costs for advertisers. Doing ads better is better for everyone The internet-connected smartphone for a mass market is barely ten years old, so the mobile advertising industry is still in its infancy. One could compare the tension between the market players with the early days of MP3 music sharing sites (Napster, Limewire, Shareaza) and the eventual success of the legal, paid model that evolved from them. Consumers’ reliance on free apps in exchange for their personal data has boosted the aggressive data collection behaviour of the advertising industry. This in turn has encouraged privacy and consumer rights advocates to create and support ad-blocking software. Inevitably, this three-way tension will lead to more oversight and legislation to tame the industry’s excesses, particularly in the highly regulated European market. As an extreme example, a small mobile operator this week decided to block mobile ads altogether. This is certainly one solution, but if such a step were to be widely taken this would severely limit the degree to which app developers could continue to innovate and create while maintaining a free product and free content for users. Handing control of the web ecosystem to telecoms companies or small yet powerful ad-blocking businesses that allow advertisers to whitelist their ads so that they’re still seen by users, is an undesirable outcome for most. On the other hand, research into privacy-preserving mobile advertising methods is underway, and there have been numerous calls for users to have more control over their personal data. Done properly, in a way that doesn’t hit users in the pocket or degrade their web browsing experience, there’s no reason why ads, perhaps less targeted ads, wouldn’t be accepted again. Alternatively it will be a case for model can certainly return to the scene. Hamed Haddadi, Lecturer Assistant Professor in Digital Media, Queen Mary University of London This article was originally published on The Conversation. Read the original article.
In just two days, Marco Arment’s app had flown to the top of the App Store charts. Then he decided to take it down. Arment’s ad blocking app Peace proved to be an immediate hit, soaring to the top of the paid charts, but due to moral problems with the practice, he made the tough and financially detrimental decision to pull it from the store. The ad blocking debate has been reignited this month, with Apple allowing for developers to incorporate the software with the new iOS 9 updates. With iOS 9, apps can now be easily created that facilitate ad blocking on the Safari app and in just a week, many have sped to the top of the App Store charts. “Ad-blocking is a kind of war with damage hitting both sides,” Arment says in a blog post explaining his decision. “Even though I’m ‘winning’, I’ve enjoyed none of it. That’s why I’m withdrawing from the market. “Achieving this much success with Peace just doesn’t feel good. Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit.” It’s the fact that blocking software allows for blanket bans of all ads that most worries Arment. “Peace required that all ads be treated the same – all-or-nothing enforcement for decisions that aren’t black and white,” he says. “This approach is too blunt.” “If we’re going to affect positive change overall, a more nuanced, complex approach is required than what I can bring in a simple iOS app. “I don’t feel good making one and being the arbiter of what’s blocked.” Pouring fuel on the ad blocking fire The advent of ad blocking on iPhones has poured fuel on the fire that is the debate surrounding this technology and how developers and publishers should react. It was a big move from Apple in allowing the software, but seems like a well-thought out one for them. With no skin in the online advertising game, it’ll likely to hit Google hard and leave in-app advertising unscathed. But it will have severe and widespread repercussions, as pointed out by Arment. It’s already something that has come to a head in terms of desktop web browsers; with ad blocking becoming a much more mainstream practice in the last few years. According to a study conducted by Pagefair, ad blocking on desktops was responsible for $US22 million in lost revenue, with an estimated 198 million users worldwide actively blocking advertisements. With the immediate demand for iOS ad blocking, it seems there will be very similar problems with mobile advertising. Rattling the advertising industry Co-founder of advertising agency BigDatr Avrill D’Costa tells StartupSmart the changes are likely to “rattle” the advertising industry. “Publishers will have to face Apple’s decision,” D’Costa says. “This change will deny publishers advertising revenue in the tune of millions, whilst still allowing users to access their content ad-free.” “It wouldn’t surprise me if those publishers running on tight margins and relying on advertising revenue as the sole income stream throw in the towel and call it quits.” Power to the users But Paul Chan, the CEO of online marketer PureProfile, says it could force advertisers to innovate and create more user-friendly ads. “Pureprofile is an advocate of anything that allows publishers to improve advertising,” Chan says. “We believe advertising has a genuinely useful place in people’s lives, but it needs to be less intrusive and more relevant, particularly when it comes to video content. “There should be other mechanisms that do not interrupt the content experience and provide high-value advertising interactions.” It’s about giving users more control, perhaps to the detriment of advertisers and publishers, Chan says. “We truly support anything that puts the user in control and gives them the settings to exercise their right to choose how they consume content, including advertising,” he says. As well as a push to produce better ads, some websites have been publishing messages directly to users asking them to remove the ad blocker or sign up. In a move that many are saying isn’t coincidental in the slightest; Apple also launched its new default News app with iOS 9. Apple News will use RSS feeds to get content from publishing partners, and perhaps a new means of revenue for publishers. It’s a debate with many technical and moral intricacies, and one that’s likely to only become fiercer in the coming months. Want to grow your business with Instagram? StartupSmart School can help
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