Ads or no ads battle: good or bad

September 22nd, 2015 by · Leave a Comment

This article was authored by Jouko Ahvenainen, and was originally posted on telecomasia.net.

Apple introduced solutions to block ads in iOS. This can be harmful for many web service providers, especially Google. So, Google is already looking for new solutions to avoid the blocking. And now some ad blocking solution developers have decided to withdraw their products, because they felt is harmful for many smaller sites and app developers. Is it good or bad to block ads? Or is this more a battle between giants, Apple and Google?

Apple allowed ad blockers with its iOS 9. Apple itself doesn’t block advertising, but it allows 3rd party developers to make ‘extensions’ that perform blocking. There is also another feature in iOS 9 that makes advertising more difficult: it doesn’t allow apps to get data from webservers without an https connection. Google publishes code for developers to do this. This already indicates competition in this area. Apple’s move to leave blocking to 3rd party apps is smart - it probably guarantees that when there are new ways to avoid blocking, we will soon see a new blocker to handle them.

Marco Arment, a well-known mobile developer, made an ad-blocking app, Peace. It rapidly climbed to the top of the chart of paid apps in the App Store. But then he decided to pull the app from the App Store. His explanation was that he felt it could badly hurt some innocent developers and smaller businesses to whom advertising revenue is crucial.

We can also compare the situation to the TV market, although it is a walled garden model in contrast to the mobile web. There we also have competition between subscription and advertising models. Thanks to new services like Netflix and Amazon Prime with cable channels, subscription models have won more viewers. This is probably one comparison point that mobile companies and developers consider.

At the same time we must not underestimate the importance of advertising. It still pays for the main part of content on the internet and TV. It is a kind of compromise for user experience, but users have normally accepted it when it has given them free content. For Google advertising is, of course, crucial. Google’s advertising is not only search engine ads, but, for example, DoubleClick that serves a significant part of advertising to publishers and other content sites. Google also has a leading ad exchange, AdX. And now iPhone, iPad and mobile Safari Apple blockers attack these.

We can say Apple and Google have always had a very fundamental, almost philosophical, difference: Google offers many things for free and advertising is a fundamental part of its business, but Apple expects users to always pay for each device and service. Apple emphasizes the elegant user experience, when Google often offers simple basic things for free or for a very low price. Now this battle is really becoming fierce in mobile content and apps also.

One outcome could be that we start to see more isolated Apple and Google domains in mobile and web. And then we have Facebook that has the most daily visitors and  its own advertising too, and especially mobile is becoming dominant.

This is a multi billion-dollar battle. It is still hard to say whether Apple’s attack is against all advertising and really targets a new user experience, or if it is more a tactical attack against Google. It will intensify the competition between iOS and Android, if it becomes a real territorial battle. And most probably Google makes some moves too. As a whole it is hard to think web and mobile without advertising except in premium content and apps. Hopefully this doesn’t stop the progress of the internet business or tie it to these two companies.

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