European mobile operators plan to block ads

Mobile operators in Europe are reportedly planning to install ad blocking software, posing a major threat to the mobile ad industry.

Mobile ads: carriers may flex their muscles with adblockers
Mobile ads: carriers may flex their muscles with adblockers

At least one major European carrier has signed up to Shine, an Israeli start-up that has developed the ad blocking technology, according to reports in Business Insider and the Financial Times.

Shine's technology allows carriers to weed out display ads shown by the likes of Google - though apparently it won't affect ads showing up on newsfeeds, such as Facebook or Twitter. The company is backed by Horizon Ventures, the venture capital firm owned by Asian billionnaire Li Ka-shing. Li is chairman of Hutchison Whampoa, owner of UK telco Three and prospective owner of O2.

According to the Financial Times, the unnamed European carrier will switch on ad blocking software by the end of this year, a move that has major ramifications for the biggest digital ad firms.

Shine CMO Roi Carthy told the newspaper: "Tens of millions of mobile subscribers around the world will be opting in to ad blocking by the end of the year. If this scales, it could have a devastating impact on the online advertising industry."

The carrier is planning to launch ad-blocking as an opt-in service - but it may also simply switch on the service for millions of subscribers at once. The idea is to specifically target Google, possibly pressuring the firm into sharing its revenue, though the legaility of this is in question.

Better mobile experience

Telefonica, one of the biggest operators in Europe, said it had not had any conversations with Shine to date - but described the model as "interesting".

Dan Rosen, global head of advertising at the operator, told Marketing: "We are always exploring new ways to give our customers a better mobile experience and Shine has an interesting model that could give people more choice over the advertising they see.

"However, to date we have not had any conversations with Shine and I recognise there could be many issues with an approach that takes a wholesale approach to ad blocking across a mobile network. "

If mobile operators block third-party ads in order to muscle in with their own offerings, it isn't clear that advertisers will play ball.

Bob Wootton, director of media and advertising at trade body ISBA, said: "[Too] few acknowledge that advertising funds most of the world’s media, not least the internet."

He added: "When squabbles over footprint and share of revenue spill over into threatening a principal source of funding, it’s time to take very careful stock.

"Advertisers are neither charities nor cash cows and, thus provoked, are sure to move their business to more favourable environments."

Wootton called for "effective debate" about a fair value exchange between consumers, operators and advertisers.

The news comes after US network Verizon bought AOL for $4.4bn in a clear bid to move into mobile ads and claw back digital revenue lost to the likes of Google.


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