A senior telecoms executive has suggested companies that sell advertising, such as Google and Facebook, should pay carriers for all the mobile data the ads are using up.
Writing on LinkedIn (the post has now been removed, but a cached version can be found here. We first saw reference to the LinkedIn post on The Financial Times) Deutsche Telekom’s senior vice president of technology, strategy, governance, and programs Tomasz Gerszberg referenced the growth in consumers using ad blocking software, plus the “arms race” waging between the ad blockers, and the new startup companies trying to help publishers and ad sellers circumvent them.
Gerszberg says this kind of war could be “easily avoided” on mobile, where “annoying” ads are eating into consumers’ data plans, which may well be one of the reasons why they consider downloading ad blockers.
His solution is for advertising networks and exchanges to pay mobile carriers, who will then use that money subsidise their customers’ mobile tariffs.
Here’s Gerszberg’s proposal and reasoning:
The future model of mobile advertising delivery needs to be changed. Let’s imagine that a user doesn’t pay for ads out of its own pocket. Advertising will be zero rated by operators who will be paid by ad exchange networks for ad delivery. This model will deliver sustainable growth to the whole industry. It will reduce ad spam, so it will increase conversion rate – as it was proven by AdBlock+. It will eliminate the reasons for users’ ad blocking, so the publishers will enjoy increasing revenues in the growing mobile segment. It will also give operators the opportunity to be a part of the value chain and enrich it with their own Big Data capabilities.
Deutsche Telekom, which has more than 150 million subscribers worldwide, told The Financial Times that the post was written by Gerszberg in a personal capacity, but that it has “no fixed plans to introduce such an option.”
While it may seem implausible for big internet ad sellers to suddenly start shelling out fees to carriers to ensure their ads continue to run, they are already paying out huge fees to ad blocking companies like Eyeo to get their ads white-listed on its popular Adblock Plus browser extension. Companies including Google, Microsoft, Amazon, and Taboola are paying Eyeo a fee of “30% of the additional ad revenues” they would have made were their ads unblocked, The Financial Times reported in February.
Mobile ad blocking is not yet as prevalent as ad blocking on desktop computers. Only 1.6% of ad block traffic on PageFair’s network was from mobile devices in the second quarter of this year. PageFair works with publishers to reduce the impact of ad blocking, and releases an annual report on the state of ad blocking in partnership with Adobe.
But there are concerns that mobile ad blocking could grow. Apple’s developer documents for its new mobile operating system iOS 9 revealed it will for the first time allow app makers to develop ad blocking software for iPhones and iPads, which PageFair and Adobe say could be a “game changer.”
There are also other mobile ad blocking developments that could accelerate ad blocking software usage. Gerszberg referenced an Israeli ad blocking startup called Shine in his post. Shine says it has backing from major wireless carriers and that its filtering software will work by blocking ads at a network level before they are even served to a user’s mobile phone, although no deals have been publicly announced.
Shine also claims that ads are eating up between 10-50% of users’ data plans, which chimes with Gerszberg’s complaints about how ads are being “delivered at the consumers’ expense.”
When asked whether Shine and Deutsche Telekom had any plans to roll out such a solution for Deutsche Telekom, a Shine spokesman told Business Insider: “We do not comment on private commercial discussions.”
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