The Future of Ad Blocking: What Ad Blocking is Really About

Hagai Tal
H. Tal|01.11.16

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Hagai Tal
January 11th, 2016
The Future of Ad Blocking: What Ad Blocking is Really About

The headlines say the ad blocking war has begun. Not that ad blockers are new; they aren't. But the adoption of ad blockers is on the rise, and thanks to Apple, everyone in mobile advertising is talking about how the sky is falling.

Except the sky isn't falling, and to insist otherwise is to overlook ad tech's ability to adapt through innovation. Already, some publishers are circumventing ad blockers with new ways to insert ads that can't be blocked. Other publishers are taking the more extreme tactic of blocking users who have installed ad blockers. Meanwhile, some very large advertisers are simply paying ad blockers like Eyeo for access.

So what is the ad blocker story really about? On one level, Apple's decision to embrace ad blockers is about creating a better user experience, especially on mobile. That's a good thing because user experience is paramount. But achieving the best user experience in an ecosystem with many different stakeholders requires a delicate balancing act.

Mobile, which is a massive but by no means mature market given the projected rate of mobile adoption, shouldn't be governed by a benevolent ruler. Instead, the market forces that have facilitated innovation and nurtured the industry to date should continue to drive mobile into the future. Apple's decision to embrace ad blockers isn't an attack on publishers, it's an attack on the very developers who helped make Apple's iOS the go-to mobile platform for innovation. That should worry developers, but it should also worry Apple, as well as the rest of the mobile ecosystem, because the longer Apple continues to cozy up to ad blockers, the greater the risk to mobile's innovation engine.

Which developers does Apple support?
Apple encouraged developers to build apps by promising them two things—a platform for development and a marketplace for distribution. Implicit in the promise of a marketplace is a pledge not to pick winners. After all, if Apple chose Candy Crush as the very best casual game, what incentive would other developers have to make new games?

The problem with Apple's decision to allow ad blockers is that it tips the balance of power strongly in favor of developers who make ad blockers and against the rest of its developers who rely on advertising to monetize their apps. In effect, Apple is picking winners. In the short run, App Store rankings change. But in the long run, the harder Apple is on the rest of its developers, the more likely it is that they will flee the App Store and stop developing for iOS.

Who cares if developers switch?
Since the debut of the iPhone, Apple has been the main stage for mobile development, even if Google's Android operating system owns the lion's share of the market. That reality has given developers a bankable two-step strategy.

First, developers make a splash with something new on the iPhone, where more rigid design parameters and legions of early adopters incentivize bold, new ideas of the Steve Jobs mold. Second, once there's a proof of concept, developers shift to the Android platform to achieve scale and the kind of profits that fuel further R&D for the next generation of iOS apps. Put simply: the back and forth competition between Apple and Google is a virtuous circle.

But by favoring one group of stakeholders over another, Apple risks losing its place as mobile's main stage. That is Apple's problem. But it's also a problem for the rest of the industry because, to a large degree, the strength of the mobile advertising industry depends on two competitive platforms, in much the same way that competition between Google and Facebook benefits the desktop ecosystem.

Focus on performance to build a healthy market
Nobody really believes that advertising, mobile, or desktop, is going away. Advertising built the Internet, and advertising will continue to pay for it, because consumers won't. So while Apple's determination to improve the mobile user experience is laudable, its tactics are ultimately misguided.

Sooner or later, mobile advertising companies, publishers, and everyone else in the ecosystem will address the user experience issue—not because ad blockers will kill them if they don't, but because consumers will do it for them. That's the real systemic threat, because a bad user experience undermines performance. In much the same way that Web 2.0 addressed the failings of what came before to vastly improve the user experience (and grow the user base), so too will the fluid back-and-forth of innovation that defined mobile's first decade continue to drive progress in the coming years.

That's the beauty of a performance-driven industry; either mobile advertising companies deliver results, or they die. With the right balance between two large competing platforms, we are all forced to be innovative, agile, and responsive to change.

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