October 06, 2015

Mobile Carrier Plans Ad Blocking At Scale

By David Kaganovsky WW CIO

David Kaganovsky

David Kaganovsky

WW CIO

Maxus' Worldwide CIO David Kaganovsky discusses the impact of ad blocking by mobile networks in the latest in our Change Briefing series.


What’s Changed

Caribbean based mobile operator Digicel recently announced that they plan to block all advertising across their mobile network unless online advertising vendors pay a fee. While Ad Blocking has been a hot topic lately, this change truly represents a new development, even beyond Apple’s iOS 9 ad blocking capability, because this introduces ad blocking at scale.

This can be a real game-changer especially if larger carriers also follow this trend. As the Digicel story broke, it included a comment that other large mobile operators are considering a similar approach.

 

What The Change Means

First and foremost, it is clear that this is a play for additional revenue, and not an initiative to improve the user experience. Digicel’s argument is that Facebook/Google/Yahoo benefit from investments made by the carriers without having to pay their fair share, although it has to be noted that their customers pay for the data costs of receiving ads and viewing in feed videos

What is clear is that while Digicel can do this, the publishers may retaliate by simply cutting their services from Digicel subscribers. It is instructive to look at the impact of the “Google News Tax” in Spain. The legislation imposed a cost on news aggregators for showing even small amounts of information from news sites. In response, Google simply turned off its news services in Spain, which reduced the news publishers’’ audiences!

 

Implications Of The Change For Advertisers

If Digicel goes ahead with its plan, the industry will watch the publisher response closely. And we will take appropriate action as required to ensure that advertisers can continue to reach audiences at scale.

There is also a requirement for ad-tech vendors to reduce their bloat. Estimates are that as much as half of all consumer data usage is caused by mobile advertising. This is not acceptable, and we are committed to driving out these vendor inefficiencies by optimizing advertisers’ technology stacks.