Israelian Shine Technologies recently caused a stir among the flourishing mobile ad scene by unleashing its mobile ad blocking technology backed by a major telecoms provider. Shine is backed by Horizons Ventures, part of Hutchinson Whampoa, which owns the Three mobile carrier. Launched in 2011, the company secured $3.3m in funding to date.
As smartphone adoption grows worldwide so does mobile advertising. According to Juniper Research, global mobile marketing spending is set to increase to $105bn by 2019 from $51bn this year. However, not everyone has been able to profit from the upsurge. Telecoms operators and networks have watched on as Google and Facebook dominate the industry and with bandwidth being expensive and infrastructure only slowly catching up, ads can be a problem for networks. In addition, Shine research highlights that ads can use up to 10-50% of a user’s data plan, adding costs to the end consumer.
Advertising uses more bandwidth, adding to a mobile phone user’s costs
That is where Shine comes in. It offers users the chance to block all ads irrespective of format on their mobile devices, control their data usage and helps mobile carriers to regain control over the user experience. Roi Carthy, Chief Marketing Officer, Shine, says:
“Mobile advertising is abusive to the consumer, it abuses their privacy, their data use and their battery life. (…) What we discovered redefined malware, and ad tech. That doesn’t mean it has to be malicious, but [ad tech] behaves like malware. The tech and methodology is the same, [but in the case of advertising] it’s more about targeting.”
Currently there are roughly 144m ad block users worldwide and that figure is growing according to research from PageFair and Adobe. Between June 2013 and June 2014, the number of users adblocking almost tripled with apps such as AdBlock Plus and Trust Pro becoming widely available.
Ad blocking is growing rapidly
But where Shine differs is that it won’t offer its services as a standalone app to the end user, but as a license to the telecoms network instead. Mobile carriers then get to decide if they want to charge a premium for the service or add the feature for free to its services. For a fee, publishers can have their ads unblocked, similar to what AdBlock Plus offers.
However, not everyone believes things are so simple. The BBC finds that one of the big problems with ad blocking is that it essentially discriminates across data across the network. “That is an offence against the principle of net neutrality, now enshrined in law in the United States and becoming a hot topic for European regulators,” the Rory Cellan-Jones at BBC writes. The Financial Times adds that aggressive ad blocking strategies have backfired before since many free online services are funded by advertising. Imposing strict regulations can hinder competition and innovation, affecting the end user negatively.
But Carthy remains positive:
“We believe ad blocking is a right, full-stop. If the consumer decides to use it, we believe that it should be their right, and they should be able to do it with full integrity…nobody (in business) has a god-given right to exist. If you own a trucking business, and gas prices rise, and you can’t afford to pay your bills because you were not able to manage your business, you go out of business. There will be causalities, absolutely, but I know I’m not losing any sleep knowing remnant inventory ad networks will disappear.”
Stephen Upstone, Chairman, Mobile Marketing Association UK and CEO of LoopMe, a video technology company, agrees that ad blocking shouldn’t have too much of a negative influence on the mobile ad industry:
“Advertising helps to fund the apps and content that consumers love and many consumers enjoy advertising. While some technologies can block content, large publishers have both the power and right to maintain relationships with users and advertisers. Some consumers will pay or find other ways to opt out of advertising, but this will not impact this growth of mobile advertising which is set to become the majority of global digital advertising spend and to transform and enhance other global ad markets such as TV brand advertising.”
Whether his prediction holds true remains to be seen as Shine announces that multiple mobile carriers have already signed up for its adblock solution.