Smartphone ad blockers: a threat to the Swiss advertising market?

MOBILE ADVERTISING This week, Apple announced an upgrade to its mobile operating system, which will make it possible to prevent advertising for the first time. Since then, rumors have been swirling about whether and how this functionality can be set up on consumers' iPhones and what consequences this will have for the advertising industry.The Swiss Mobile Technology Company Adello has analyzed the situation and given the all-clear.In addition to an improved keyboard, more flexible search, video overlay, etc., iOS 9 allows users to install content blocking software in the mobile version of Apple's 'Safari' browser for the first time. In principle, this also allows advertising to be prevented. However, this requires the user to actively download and put adblocking software into operation. Contrary to popular belief, adblocking works exclusively in the mobile version of Apple's 'Safari' browser, but not in all other browsers. All mobile apps are also not affected by adblocking (such as 20 Minuten, Blick, Watson, etc.).Hardly any noticeable effects for the time beingAccording to Adello, no noticeable effects are to be expected in the short term for the mobile advertising market, because the potentially blocked traffic share is in the low single-digit percentage range and thus many times below the growth of mobile data traffic. As a comparison, we can take the adblocker distribution on PCs, where such programs have existed since 2009. Such software was installed on just 6 percent of devices connected to the Internet. On iOS 9, adblockers are limited to 'Safari' ads. However, mobile app usage far exceeds that of mobile sites. In the U.S., the usage ratio of app vs. browser is 85 : 15, and Safari currently accounts for 41 percent of the mobile and tablet market. "Even if all iPhone and iPad users were to update to iOS 9 now and install an adblocker now, this would hide a maximum of 6.15 percent of ads. If we now assume that adblocker penetration will reach 6 percent of all devices, as it does on desktop, blocked mobile traffic drops by 0.3 percent of total iOS ad inventory," concludes Adello founder Mark Forster. The potential blocked inventory of 0.3 to 6.15 percent is therefore negligible for the advertising industry, he said. Nonetheless, they would follow developments closely. "In our systems, we see such trends very early and could thus react to any changes. The fact is that mobile traffic is still growing by double-digit percentages every month," says Forster.No waste of advertising to disinterested peopleDevelopments are also regularly reviewed with the publisher partners, who are showing a certain nervousness. The situation is paradoxical: Consumers are apparently not prepared to pay for content. Therefore, this content has to be financed through advertising. If this advertising is now prevented, the monetization for the publishers falls away, which is to the detriment of the quality of the media. At Adello, the spread of adblockers is not viewed negatively. First of all, an adblocker makes it possible to reduce the waste of advertising to disinterested parties. So if you can tell which user has installed an adblocker on a 'Safari' browser, you should also try not to show advertising to the same user in other channels. The aim is therefore to take consumer behavior into account rather than to combat it. In a second step, however, those customers who do not want to see advertising must be increasingly guided in the direction of paid models. If, contrary to all expectations, mobile adblocking were to become widespread and significantly block out a certain advertising target group, it can be assumed that campaigns would be increasingly targeted in mobile apps. On 'Safari', other forms of advertising that cannot be prevented are likely to be given preference. Because, according to Forster, "advertising always finds a way to the consumer.