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Ad Block Update – Three, Pagefair, Ovum, New York Times

David Murphy

PageFair Ad Block Landscape

The ad blocking universe, according to PageFair

Ad Block Update is our fortnightly round-up of the latest developments in the ongoing battle between the ad industry and ad blockers. This time round, news of a network-level ad-blocking pilot from UK operator Three, and more worrying forecasts of how much publishers stand to lose if ad blocking continues to grow in popularity.

Until now, ad blocking has relied almost entirely on individual consumers making a conscious decision to download and run ad blocking software. Despite this, the incidence of ad blocking has risen rapidly as people realise they have a choice and, at this point at least, few publishers put any barriers in the way of their desire for an ad-free browsing experience.

Also, to date, it’s fair to say that ad blocking has largely been a desktop web phenomenon. Since most mobile activity is in-app rather than on the mobile web, ad blocking has had much less impact on mobile, despite last year’s launch of in-app ad blockers such as Weblock.

That could all change rapidly, however, after UK operator Three unveiled plans to trial ad-blocking technology at the network level, potentially eliminating mobile ads for all users both on the mobile web and in-app, so long as they are on a cellular, as opposed to wi-fi, connection. Three says the move has been motivated by customer concerns over privacy and data usage.

The company has previously told Mobile Marketing that it has no plans to make money from the exercise by charging advertisers to whitelist their ads, alla Adblock Plus' Acceptable Ads program, but no doubt other operators will be watching its ad blocking trial, due to start next week, to see how it fares. While some have questioned whether such a program is legal in Europe, Three seems determined to at least test the waters.

Ad blocking numbers
Two reports released in the past week have underlined the scale of the ad blocking problem, even before the mobile operators get involved. First PageFair revealed that 419m people – or 22 per cent of the world’s 1.9bn smartphone users – are blocking ads on the mobile web. In the same report, PageFair noted that downloads of mobile browsers that block ads by default grew 90 per cent during 2015.

If there’s any consolation for publishers in the Western world, it’s in the fact that of those 419m ad block users, 67 per cent are in China (which has 159m monthly active users of ad-blocking browsers), and India (122m). These figures are reinforced by the fact that UC Browser, the Chinese browser owned by Alibaba accounted for four of the top five most downloaded ad-blocking browsers between December 2014 and March 2016.

The second report, from Ovum, forecast that if publishers do not adequately respond to the threat posed by ad-blocking software, it could cost them up to $78.2bn (£53.7bn) – or 26 per cent of total internet advertising – by 2020. Ovum believes, however, that publishers and advertisers will respond and stem the losses. At a mere $35.3bn. Even if publishers really stepped up to the plate and did everything within their power to combat ad blocking, they still stand to lose $16bn over the next four years.

Changing Times
One publisher who is taking a stand is the New York Times. At the IAB’s Ad Blocking & User Experience Summit earlier this week, chief executive Mark Thompson revealed that the publisher is exploring the possibility of offering consumers an ad-free digital subscription package. Thompson also took the opportunity to lay into Eyeo the company behind Adblock Plus and the Acceptable Ads whitelist program, saying:

“This is a manifestly unsavoury business practice. Ad blockers often portray themselves as an answer to unsatisfactory digital advertising experiences. But Eyeo wasn’t founded by concerned citizens. It was founded by a digital ad veteran and represents the most cynical, most money-grasping end of the old, unreformed digital ad business. We need to expose Eyeo, Adblock Plus and the Acceptable Ads whitelist, so that the public can see them for what they are.”

Stay tuned for more ad blocking news as it comes in.