This week there has been an explosion of conversation around Apple's mobile ad blocking efforts mostly thanks to one man: Marco Arment, the co-founder of Tumblr and creator of the immensely popular, if shortly lived "Peace" mobile ad blocking app. For 36 hours, Peace was the number one paid app in Apple's App Store, but then something amazing happened: Marco Arment pulled the app from the App Store, sighting a crisis of consciousness.
In his blog post, Marco Arment says, "Achieving this much success with Peace just doesn't feel good, which I didn't anticipate, but probably should have. Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don't deserve the hit."
Mobile Ad Blocking Hurts Publishers--Especially Independents
As my favorite Wall Street Journal columnist Christopher Mims put it, "Today is national kick an indy web publisher in the groin day, spread the word." That is to say that the bulk of independent web publishers make the vast majority of their revenue through advertising dollars and since more people consume content via their mobile phones than via computers, losing mobile advertising revenue is a huge deal.
Imagine if you went into work today and discovered that between 50 to 85% of your company's revenue suddenly vanished! This is not a minor set-back, but rather an OMG moment where you are faced with the very real possibility that you may have to shut your doors and find a new line of work.
Apple Declares War on Google
Of course, the independent web publisher community is not who Apple was targeting when it released its new "content-blocking extensions" in the latest release of iOS9. Independent web publishers are simply collateral damage in an ever increasing war between Apple and their arch rival Google.
Google makes nearly all of its revenue from digital advertising. How much? According to The Motley Fool, "In the first quarter of 2015 Google took in $17.3 billion in revenue, up 12% year over year. Nearly all of it — $15.5 billion — came from advertising sales. About $12 million of that came on the company’s own sites with the rest being derived from its network."
And while they never came right out and said it, this advertising revenue is precisely what Apple targeted with it's "content-blocking extensions". You see, mobile ad blockers have been around for quite some time, but were a relatively niche market and not a big threat to publishers and digital ad networks until recently. What Apple did in its iOS9 release, however, was to make it incredibly simple for mobile app developers to block ads from loading in the Safari web browser (the default web browser on iPhones).
As The Guardian points out, "But although Apple has opened the floodgates to the extensions, it hasn't done anything directly to block ads on new iPhones. Unless a user actively downloads a new app, such as Peace, Crystal or Purify, they will still see just the same adverts as they always had done."
Apple Hasn't Triggered The Nuclear Option ... Yet
I particularly enjoyed the many insights from The Verge on this subject. Particularly when they point out that, "There is no alternative web rendering engine on the iPhone; there’s just WebKit, which Apple controls. The dominance of the iPhone and Mobile Safari give Apple “veto power” over the web, as John Gruber put it--a veto power which means Google’s revenue platform is increasingly under the control of a major rival."
You see, if Apple really wanted to directly put a serious dent in Google's mobile advertising revenue, it could have simply defaulted its mobile Safari browser to block ads. This is the nuclear option and one that would most likely result in immediate litigation.
As The Verge points out, "...[iOS9] allows users to block ads, and it offers publishers salvation in the form of Apple News, inside of which Apple will happily display (unblockable!) ads, and even sell them on publishers’ behalf for just a 30 percent cut." So while Apple is encouraging it's developer community to create ad blockers which hurt Google and other publisher's revenue, Apple has created an unblockable solution in which it takes a 30% cut.
Mobile Ad Blocking Is Here To Stay
Despite the flare up of articles and negative publicity around Apple's moves, this was only the first shot in what is likely to be a long, drawn out war between Apple and Google. Both sides have incredibly deep pockets and bright engineers who have a lot of incentive to figure out how to win this turf war. Think of this as the beginning of a digital advertising arms race between two incredibly well funded multi-billion dollar companies.
Unless the major players in the content industry band together and agree not to serve their content to those who have installed mobile ad blockers, there's not much else that the independent web publishers can do while Apple and Google fight it out.
In reference to a New York Post article, the Internet Advertising Bureau (IAB), tweeted out: "We [IAB] don't think #adblocking is right...Advertising is the economic engine that drives the free internet". While that is most certainly true, unless the publishing and advertising industries band together to do more than talk about the mobile ad blocking problem, we're going to see a lot of fall out (including a lot of collateral damage to smaller independent web publishers) while the two largest players in the mobile advertising and mobile phone space duke it out.