Ad blocking software threatens social media business
01 Jun 2016
The business model of companies like Google and Facebook that are heavily dependent on advertising revenues to run their online empires, is in jeopardy thanks to ad-blocking software.
About a fifth of of smartphone users, or 420 million people worldwide, block online ads when browsing the web on their cellphones - an increase of 90 per cent of those who block ads, says a new report from PageFair and Priori Data.
Startup PageFair helps to recoup some of this lost advertising revenue, while Priori Data tracks smartphone applications.
Already, 36 per cent of smartphone users in the Asia-Pacific region had ad-blocking browsers on their mobile devices, while in India and Indonesia - two of the world's fastest-growing Internet that figure was almost two thirds of smartphone users.
The use of ad-blocking software had split the online world, with supporters claiming it allowed people to get better access to content without having to suffer irritating ads.
However, opponents, especially companies that rely on advertising, say blocking ads violates the implicit contract that people agree to when viewing online material, much of which is paid for by ads.
''We found the results surprising because in the West we don't often consider what's going on in developing countries,'' The New York Times quoted PageFair CEO Sean Blanchfield. ''It's only a matter of time until mobile ad blocking comes to the West.''
"This report tells a sobering story about the future viability of ad-funded media and journalism in developing economies," AFP quoted Blanchfield.
"Ad-blocking now threatens all mobile channels," he added. "Failure to address user concerns about mobile advertising in North America and Europe will lead to the same kind of widespread ad-block usage that we are seeing in the Asia Pacific region."
The report added that the impact of ad-blocking in North America and Europe had been much less.
According to the study there were 14 million active users of ad-blocking browsers on smartphones in Europe and North America as of March.
