Why blocking mobile ads is a very bad idea

Ads can be annoying. It doesn’t matter whether they’re in print magazines, on television or radio, or on a website or mobile device. They’re generally a nuisance. There is a push from European mobile providers to block all mobile ads and it’s being pitched as a matter of customer service, but stop for a minute and think about the cascade effect it might have if ad revenue suddenly stopped.

I wrote this blog post about why simply blocking all mobile ads might not be as good an idea as it might seem at face value:

There’s a revolt going on against Google in Europe. A recent report suggests that European mobile providers are planning to implement an ad-blocking system to eliminate web advertising. The move would affect all web advertising, but the target of such a move is clearly Google. The idea is misguided and doomed to fail, but experts say it will most likely have a far more damaging impact on the developers who rely on ad revenue than it will on Google itself.

End-run goes beyond Google

Digital advertising is a significant source of revenue for many companies—not the least of which is Google. Google doesn’t have a monopoly on online advertising, but it sometimes seems like it does. Google is synonymous with digital advertising, and its vast array of products and services all essentially boil down to different vectors for generating ad revenue.

According to the recently released AdEx Benchmark study, spending on digital advertising increased by nearly 12 percent last year to more than €27 billion (approximately $30.5 billion). It’s easy to see why mobile providers want to control that market and make sure they get a piece of the (very large) proverbial pie.

Once upon a time, Internet and mobile providers did act as gatekeepers for content. There is perhaps an element of hubris involved, if mobile providers feel that they’re the ones who enable and facilitate this massive economy. It’s understandable that they might feel entitled to make more of a profit from providing the pipeline that delivers the ads and generates the revenue.

The effort is a bit Quixotic, though, and it’s unlikely to succeed at much more than alienating users and app developers. Kalyan Ramanathan, VP of product marketing for AppDynamics, says, “Google, and companies like Yahoo, Bing, and others must make a substantial portion of this revenue. It seems a bit of a stretch to think that a few carriers will close down such a big market.”

Alienating developers is not the smartest idea

Love them or hate them, ads are what make the web go ’round. For many startups, web companies, and mobile developers, ad revenue is a crucial element of the business model. Web and mobile ads can certainly be annoying—just like television commercials, magazine ads, or roadside billboards—but the reality is that they do attract attention, generate income, and enable companies to establish themselves as credible businesses.

“A blanket ban of ads on mobile apps would mean that companies would need to find other routes to revenue,” says John Rakowski, director of product marketing for AppDynamics. “These would include paywalls and micropayments, which would alter the value delivered by the app.”

Paywalls and other attempts at collecting revenue directly from end users have so far achieved only limited and questionable success. Rakowski explains that even though mobile providers may be concerned about the power Google wields in this arena, a majority of developers and companies will discover that this strategy creates far more problems than it solves.

In the end, ad-blocking tactics are much more likely to alienate developers than they are to take down Google.

Check out the complete story at TechBeacon: Carrier ad blocking would ding mobile developers, deliver backlash.