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Ad-Blocking Software Idea Proposal

Ad-Blocking Software Idea Proposal
 

Who will be the winners and losers as ad-blocking software moves to mobile?

Report Available: August 24, 2016

 

Blueshift’s initial research shows skyrocketing use of ad-blocking technology on mobile devices worldwide, though use in the U.S. and Europe is not yet widespread. Some wireless service providers are exploring ways to turn on ad-blocking at the network level to reduce the burden on their networks. Many companies in the $50 billion online advertising industry could be hurt if ad-blocking continues to proliferate, including website publishers and ad technology platforms. Some are fighting back with workarounds.

 

Observations

  1. The use of ad-blocking technology on mobile devices is up 90% over a year ago, with an estimated 419 million people globally now blocking ads on smartphones. As many as 21% of the world’s smartphones have an ad-blocking browser installed, meaning ads are blocked by default. Others are using apps like AdBlock Plus. However, much of the growth is in emerging markets, as there are only about 14 million monthly active users of ad blocking browsers in Europe and North America; Ad blocking apps on Apple’s iOS have only gotten 4.5 million downloads.
  2. Some wireless carriers are testing ad blocking technology at the network level, meaning consumers would not have to do anything to have ads blocked.  Carriers are looking at the technology because of the burden that data-intensive ads place on their networks.Three UK, a British cellphone provider, conducted a one-day test of such technology in June, while Digicel, a carrier that operates mostly in the Caribbean, has started offeringa similar service.
  3. The rise of ad-blocking could hurt website publishers that rely on advertising, such as NYT, YELP, TRIP, YHOO and many others. Ad technology firms like RUBI, CRTO, TUBE and others could also be affected. Even native ads within mobile apps like FB are not immune from ad blocking, as services like Friendly Social strip out ads when they aggregate multiple social media apps.
  4. Ad industry leaders are responding to the trends by pushing for more relevant, less intrusive ads that consumers are less motivated to block. They are also testing workarounds to ad-blocking technology. Forbes, for example, uses technology that blocks content from people using ad blockers. Sites like Wired, The Washington Post, Slate and others are using systems that detect people who are blocking and inform them of ways to support the site. Sprint’s (S) Boost Mobileis testing a program where it pays users to look at ads.
  5. In Blueshift’s Aug 15, 2015, report on mobile ad blocking in Apple’s iOS 9 operating system, sources projected that website publishers would be more affected than ad tech providers in the short term. Several sources said the online ad market was due for a correction because disruptive ads had given the industry a bad name and deserved to be eliminated. They further noted that ad tech providers have long been forced into innovation to remain relevant, and that the better players are well out in front of the trend toward less intrusive advertising.

 

 

Will the use of ad blocking software on mobile devices continue to rise? Will publishers and platforms be able to successfully develop workarounds to ad blocking technology? Which companies stand to lose the most online ad revenue? Who stands to gain from ad blocking trends? To answer these and other questions, Blueshift will issue a market research report by gathering data from independent sources in the following areas: Ad technology platforms, Web publishers, Advertising agencies, Ad blocking software developers, and Industry specialists.

 

 

Companies: Alphabet (GOOG/GOOGL), Apple (AAPL), Rubicon (RUBI), Criteo (CRTO), Facebook (FB), Millennial Media (MM) Rocket Fuel (FUEL), TubeMogul (TUBE), Yahoo! (YHOO)

 

Research Begins: August 8, 2016