The App, the Browser and the Mobile Ad Blocker

Wednesday, June 03, 2015
Grant Whiteside

Browsers were once the battlefields where advertising revenue wars were won and lost. Now, that battle is evolving and we have a new contender on our hands; the mobile ad blocker.

There’s nothing new about the ad blocker, internet users have been using them for years and 28% of Americans claim to already use Eyeo’s Adblock Plus extension on their PC. What is new is the trade-off between Google and Eyeo’s latest version of the Adblock Browser, a Firefox-based Android web browser that removes mobile ads from sight of the user. In 2014, revenues for mobile video advertising spend grew at a rate of over 140% in the UK in the past year, and so this was the last thing that Google needed.

The more people that use Chrome, Android, You Tube, Gmail or Google Drive, the more ads that can be blocked and the more potential money Eyeo can make from Google to let them ‘white list’ intrusive adverts appearing on our mobile screens. The real battle, therefore, is between whether customers chose to use an app or a browser through either of which advertisers are able to send push like messages but only via the browser, are ad blockers able to do their thing. .

With the rapid growth of retargeting and programmatic advertising, last click sales through ‘search’ especially through the paid search channels have seen dramatic drops in conversion as RTB has been seen as the star of the show. And as long as RTB drives users to browsers and browsers can be controlled by showing or not showing those last click ads; there’s money to be made from Google.

But Google are fighting back and working to minimises the number of users who leave the initial search. Soon we will see the ‘buy now’ button on Google Mobile Ads, the idea being that it will encourage shoppers in buying mode to ‘act now’ whilst performing product searches.

So, it seems that browser wars are back on the agenda for some of the major providers. If Eyeo’s ad blocker browser gains market share on Chrome, Google mobile ads could lose out, as could Microsoft and Yahoo! If tech providers like Samsung felt pinned down by the potential restrictions of using Google’s Android platform, then there could be options and reasons to look elsewhere for another provider.

As mentioned earlier, big companies like Facebook that mainly gain their advertising revenues through their mobile app rather than users browsing on a platform like the Chrome browser will remain more resilient to change. This is because  73% of Facebook’s revenue comes through mobile devices, whilst a third of the entire mobile browsing market sits with Chrome; a large percentage of which could have the potential to be blocked or ‘white listed’ at a cost to Google.

The Financial Times claims that, to prevent their ads from being blocked, Google, Microsoft, Amazon and others paid Eyeo 30% of their ad revenue in order to so called ‘white list’ their adverts and keep their visibility. . ‘White listing’ may be the new goldmine of the future, there is clearly a desire to cut down the amount of intrusive ads that we see, but it may also spell the slow demise of traditional display ads and the rise of promoted app advertising and sponsored tweets.

Watch this space. Change is on the horizon yet again.