By Jonathan Davies
Mobile network operators are planning block outside advertising from the likes of Google and Yahoo, according to the Financial Times, in what could be a major game changer for mobile advertising.
The Financial Times reported that one European operator has already installed blocking software and will turn it on before the end of 2015.
The plans mean that outside advertising on websites and apps would be blocked, but advertising “in-feed” – the kind you see on Facebook and Twitter – won’t be affected.
“Tens of millions of mobile subscribers around the world will be opting in to ad blocking by the end of the year,” said Roi Carthy, chief marketing officer of Shine, the company that developed the blocking software. “If this scales, it could have a devastating impact on the online advertising industry.”
The Financial Times said that an executive at one European mobile operator explained that initially customers will be offered an opt-in ad-free service. But the widespread block on ads would take place afterwards.
What the executive described as “the bomb” is designed to specifically target Google, which dominates the mobile advertising market. It generates $60 billion a year in advertising revenue.
But “the bomb” could come under legal and PR scrutiny, the executive admitted. European and US net neutrality laws mean that all data that flows through networks must be treated equally.
Mobile operators are understood to be unhappy that firms like Google generate huge advertising revenues thanks to high-speed networks but don’t invest in the costs.
Google has called the plans “unreasonable”. It said: “People pay for mobile internet packages so they can access the apps, video streaming, webmail and other services they love, many of which are funded by ads. Google and other web companies invest heavily in developing these services – and in the behind-the-scenes infrastructure to deliver them.”
The news will come as a particular blow to Verizon, which this week bought AOL for $4.4bn in an attempt to capitalise on the growing mobile ad market.