Ad Blocker, Ad Sellers Clash at Mobile World Congress

Mobile Advertising Is Broken, Panelists Agree, but Consensus Ends There

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Attendees make their way through security at the main entrance to the Mobile World Congress in Barcelona on Tuesday.
Attendees make their way through security at the main entrance to the Mobile World Congress in Barcelona on Tuesday. Credit: Pau Barrena/Bloomberg

File this under: Not surprising. Executives from ad-selling companies like Yahoo and Google and one from an ad blocking company fundamentally disagreed during a talk about how to improve the mobile ad experience.

The feisty panel, held Tuesday at Mobile World Congress in Barcelona, focused on ad blocking but also delved into ad engagement. Everyone agreed that there are problems with the ad ecosystem on mobile, largely centered on a poor user experience and challenges to ad effectiveness. They sharply disagreed, however, on the extent of the problem and the best way to fix it.

Talk about mobile ad blocking hit a fever pitch last year in the leadup to the roll out of Apple's iOS 9, which enabled content blockers including ad blockers. James Hilton, global CEO and founder at M&C Saatchi Mobile, acknowledged that mobile ad blocking has become more popular but said it still hasn't reached broad penetration. By the end of 2016, he estimated, only 0.3% of all mobile device owners will use an ad blocker.

"It's catching on but we got to it early," Mr. Hilton said.

Now that the industry is acutely aware of how frustrating many mobile ad formats are for consumers, and willing to admit it, one issue is how to go about fixing advertising so people won't feel compelled to download ad blockers. Another is that there are already multiple ad blockers available on mobile, so the clock is ticking. While the industry figures out the best way forward, consumer ad blocking likely will continue to grow.

Consumers also aren't the only ones moved to block ads. Shine, an ad blocker that can work across entire cellphone networks, last fall announced a deal with Caribbean carrier Digicel in which it would block all ads for the network's roughly 14 million subscribers. Carriers are struggling to deal with the bandwidth that ads use up thanks to the associated video, trackers and code. It's the operators that are paying the price, along with consumers who can incur data charges from the ads, said Mr. Hilton.

Roi Carthy, chief marketing officer at Shine, said during the panel that Shine is the "single biggest threat to online advertising" because it gives consumers the opportunity to not be "abused by ad tech." He added that Shine's sweeping blocking practice offers the ad industry an opportunity for improvement. "We are not against advertising," he said.

"It may be blunt, but we believe our strategy is about helping expedite a solution," he added.

To some on the panel, a blunt strategy is nothing but blunt force. Benjamin Faes, managing director-media and platforms at Google, said he is worried by "solutions" that punish all publishers, not just the bad ones that run annoying ads on their mobile websites.

Allie Kline, CMO at AOL, said that she worries about all the time that's being spent talking about how to stop ads instead of how to invent more consumer-friendly ads.

Pete Blackshaw, VP-digital and social media at Nestle, said it's not all bad. The industry should look at this as a "galvanizing moment," he said.

"How do we figure out the right win-win model?" he added. "We can't ignore publishers, but we have to be sensitive to consumers. So how do we seize the moment?"

Mr. Carthy and Shine came under criticism during the panel. Nick Hugh, VP and general manager-advertising EMEA at Yahoo, blasted Shine for blocking at the network level, saying that if Shine blocks everything, it completely destroys the ad ecysostem. He asked Mr. Carthy why he thinks he and Shine can be the arbiters of advertising, followed by a question about how Shine makes its money.

"We don't determine what's a bad ad," said Mr. Carthy, adding that Shine exists to give consumers the option to block ads if they want. Shine doesn't allow white-listing, the practice of allowing some ads that are deemed acceptable, but for a fee. The company's goal, he said, is to work with network providers like Digicel, and more recently Three in Europe, to bring the Shine service to consumers.

In the long run, Mr. Carthy said, Shine's goal is to build trust and relationships with people by giving them a choice to block ads, and then later provide a "non-abusive" ad experience, though it's not clear what that means.

"I'm uncomfortable with the idea that an operator or ad blocking company can decide on my behalf that I'm not going to see ads," said Mr. Faes, adding that he did not feel abused by his phone. He then asked the audience how many people feel abused by their phones, and when a few people raised their hands, he quipped, "They're probably all Shine employees."

Of course, so much content is free on the internet because advertisers underwrite the publishers. If all ads were blocked, people would have to foot the bill. "There is a value exchange that has to happen between the publisher and consumer," said Mr. Hugh. "The free internet is funded by ads."

The industry clearly needs to innovate when it comes to ads, the panelists all said. What that looks like remains to be seen, but Google's Mr. Faes took the opportunity to tout Google's Accelerated Mobile Pages initiative rolling out this week, a program he said represents the kind of innovation the industry needs. AMP pages, Google's answer to Facebook's Instant Articles, are designed to load far more quickly than standard mobile web pages. The program is helping people rediscover how the internet is supposed to work, according to Mr. Faes, and "challenges the ad to be as quick as the content" is when loading.

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