Has the War on Mobile Advertising Just Begun?

by Amie Ashford Green River Media

Amie Ashford, Marketing Manager at Green River Media, examines the relationship between Apple and ad-blocking

By the time you read this article, two developments will have shaken-up the world of mobile advertising as we know it. Firstly, Google will have reversed their decision to allow the AdBlock Plus mobile app back into the Play Store. Secondly, Apple’s latest mobile operating system iOS9 will have shipped, bringing with it native ad-blocking features. So, with the two biggest players in the mobile space apparently encouraging ad blocking, how will this affect the mobile-commerce (m-commerce) marketplace?

Google and AdBlock
To start with, Google’s decision to reinstate AdBlock Plus, is one of the most bizarre u-turns in the short history of m-commerce to date, with huge amounts of Google’s revenue coming from advertising, AdBlock represents a massive threat to their business model.

In addition, Google recently announced plans to penalise sites that use interstitial ads, which are images that cover the whole interface prompting for a newsletter sign-up or app download before allowing visitors to continue to the content they expected to see. In reality, these interstitial ads are particularly unpopular with users and represent bad practice.

Not everything is as it seems

The reality is however, that Google enjoy a ‘special’ relationship with AdBlock, paying a fee to become part of their ‘acceptable ads’ program, which is effectively a whitelist that ensures their adverts are still displayed on webpages. The decision to readmit AdBlock Plus to the Play Store, may actually be a play by Google to force marketers back into the AdClick ecosystem, as this is the only way to guarantee that ads will be seen by mobile users who have AdBlock Plus installed.

It’s therefore unsurprising that other ad blocking apps that don’t offer a whitelisting option are still banned from the Play Store.

So why is ad blocking in iOS9 such a big deal?

Although Android has a far larger market share when it comes to mobile devices, the reality is that the m-commerce marketplace is powered by iOS users. Research consistently shows that Apple iPhone and iPad owners are worth far more to brands than Androids, with IBM suggesting that iOS accounts for 17.6% of all online purchases, whilst Android manages a mere 4.9%.

In addition, iOS users spend more per transaction according to the Monetate Ecommerce Quarterly (Q1 2015), which found that at $110.80, they outstripped their Android counterparts by more than $20 per transaction. So, if marketers want to reach the most lucrative markets, realistically they need to get their ads in front of iOS users.

Time to take iAd more seriously
Although news about the new ad blocker has been abundant, few commentators have pointed out that it only applies to banners and links displayed in the mobile Safari browser. Despite Apple making the majority of its revenue from the sales of hardware and software, they too operate a mobile advertising platform – iAd – which is used to serve advertising in apps.

The iAd system is built into the new News app that is included with iOS 9Apple. This indicates that Apple intend to keep it, which evidently means that they will take a 30% cut of ads sold by businesses and individuals who publish content through News… Handy for them.

Adjusting for the future
In the same way that Google’s frequent algorithm changes throw the search engine optimisation market into a hysterical panic, Apple’s ad blocking announcement has caused marketers to collectively lose their minds. The reality is, that marketing is supposed to be a creative industry forcing us to be more creative in finding new ways to reach our audiences.

Ad blocking is bad news for websites reliant on advertising to cover costs and turn a profit. The rise in popularity of AdBlock Plus on desktop computers has already been of great concern, but Apple’s move to officially support such activities could see many sites go under unless a workable alternative can be found.

So marketers now face a dilemma. Advertising on websites undoubtedly works, and they’ll need to set aside some of their budget to continue marketing to Android and desktop computer users, but for any business hooked on the spending power of Apple owners, they are also going to have to start spending more on iAd or native content to get around the ad block issue.

This article orignally appeared on the Green River Media blog.