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Ad Tech Whisper

Ad Tech Whisper
 

Research Question: Will Apple Safari’s ad-blocking and iOS 9’s prohibition of app user data collection cause ad tech companies to lose significant revenue?

Report Available: July 31, 2015

 

Blueshift’s initial research shows countless sources fretting about AAPL’s ad-blocking and app data collection restrictions in its iOS 9 update. Ad tech firms, as well as advertisers and content providers, could suffer greatly if ads in Safari are blocked and marketers are unable to target users in mobile apps. Some analysts and industry experts believe the impact will be minimal or force content providers to use less invasive advertising.

 

Observations

  1. The use of ad-blocking apps is growing exponentially. Last year ad-blocking users increased 70% to 144 million globally. 54% of US males under 29 now use ad blockers. General interest websites report that 15% to 20% of its visitors are using an ad blocker, and another study shows a 13.6% ad-blocking rate in the U.S. AdBlock Plus, the most popular ad blocker, may cause GOOG to lose $6.6 billion per year.
  2. AAPL divulged that its Safari browser in the iOS 9 upgrade coming this fall will support third-party ad-blocking extensions and allow them a “fast and efficient way to block cookies, images, resources, pop-ups, and other content.” AAPL’s Safari currently has a 53% share of all U.S. mobile browsing. A recent off-the-record interview at this year’s Think Tech Conference found ad-tech executives very concerned about AAPL’s ad-blocking efforts.
  3. In addition to Safari ad-blocking, AAPL’s iOS 9 will prohibit app developers from accessing users’ data on their apps through changes made to its API. This move serves as a blow to advertisers that collect and analyze the app data to create targeted ads.
  4. Several industry analysts claim AAPL’s ad-blocking news is overblown. Top advertising websites like GOOG and FB generate revenue from search and native ads which are often immune to ad-blocking services. Also, users will have to “to go out of their way” to block ads on iOS 9 and therefore the only users that will enable ad-blocking may be those who already block on their desktop. If Safari’s ad-blocking does prove impactful, businesses highly dependent on ad revenue may prevent Safari from browsing its site.

 

Will AAPL’s allowance of Safari ad-blocking and its prohibition of user data collection materially hurt the ad tech market? To gain insight into AAPL’s decision and the ad tech market, Blueshift will gather data and issue a market research report from independent sources in the following areas: Demand-side advertising platforms, supply-side advertising platforms, large websites highly dependent on ad revenue, ad-blocking app developers, iOS developers, and industry specialists.

Companies: Criteo (CRTO), The Rubicon Project (RUBI), TubeMogul (TUBE), Rocket Fuel (FUEL), Millennial Media (MM), Apple (AAPL), Google (GOOG), Facebook (FB)

 

To see other ideas Blueshift Research is currently working on, please click here.