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Apple announced iOS9 in June to relatively little fanfare outside the tech/Apple geek bubble that it occupies. Buried deep within that June announcement that only a few in our industry actually cared about, was the revelation that Apple was going to allow developers to start coding ad blocking software, at a systemic level, for mobile Safari. The reaction, outside of the very few people who follow the paid content industry, was, “meh.”
But it’s not “meh,” because, as Nilay Patel pointed out in his article today on The Verge, there is a very good reason Apple wants to promote ad blocking, and it has NOTHING to do with making a user’s experience better on his iPhone. Every since Google ripped off the iPhone operating system for Android, Apple has been mad as hell at Google in spite of Eric Schmidt sitting on Apple’s board. In fact, Schmidt was forced to resign in 2009 because Steve Jobs was so angry at Google for stealing his ideas, just like Jobs was angry at Bill Gates for stealing Windows from the Mac GUI. Both Windows and Google won the battle initially, but Apple smacked down Microsoft and now they are taking aim at Google.
Google makes a huge amount of money from their DFP ad server that serves ads to basically every single major publisher. And on top of that, Google runs a programmatic ad exchange server called AdX that serves the ads that follow users all over the web. Now Google uses these two servers to push ads not only to desktop, but to mobile as well, and as everyone knows, mobile advertising revenue is growing exponentially. Therefore, by prohibiting those ads from being served by Google, and with the user’s consent (Apple absolves itself of harm to Google here, the user makes the choice to download ad blocking software and install it on his mobile device), Apple is taking a shot at Google’s future revenue.
Considering the amount of bloat that gets loaded in the background while surfing the web, it’s no wonder people will certainly happily install ad blockers to clean and speed up their mobile browsing experiences. However, as Patel also points out, when they do so, the livelihood of smaller publishers is threatened because their life’s blood, advertising, is going to rapidly diminish to nothing. What Patel does not say, though, is that Apple is forcing publishing disruption upon the mobile browsing world.
Think about this: since the Netscape browser came onto the scene in 1995, advertising has paid for content. And users, some whom weren’t even born when Netscape was the dominant web browser, have assumed that content has always been free. And, programmatic advertising has led to the rise of some really really terrible websites, sites that do nothing more than put up fallacious headlines, stolen articles, listicles and other vacuous content that only attract page views and generate CPM revenue. What benefit did content producers ever get from these sites? None, in fact, they were harmed by these sites because these content vampires generated so many CPMs, the cost of the CPM went down and content generators, sites like local newspapers and magazines, were forced to show more and more ads at lower cost to maintain revenue.
The result: in a huge number of cases publishers cut staff, quality went down, site real estate was filled with more programmatic advertising and the reader suffered. And there we sat. Until now.
How does this shake out? Well, if Apple has the influence it thinks it has and coders write systemic ad blocking software that’s so effective no ads from Google get served within the Apple ecosystem (and by the way, there is ad blocking software available for Android mobile devices as well), publishers will suffer.
Or will they?
Publishers who create original content valued by their audience, are in an incredible position and have just been perched atop the content pinnacle by Apple.
There are two ways publishers can approach the paradigm shift, either throw up their hands and say they are getting screwed by the biggest companies in the world or, they can embrace the change, deferring to their users who want their privacy respected and mobile data plans un-abused. Just because a digital audience doesn’t want to see ads and be tracked, that doesn’t mean they don’t want to support the industry, it could mean they want more control and choice. So why not give them what they want?
Piano is on the side of the publisher, we have enhanced our industry-leading business platform for digital media, Piano VX, with the capability to embrace, rather than reject, those using ad blocking software. Piano VX can detect users with ad blocking software installed and engage them with a brand experience like asking them to view a video ad in exchange for 72-hour access or ask them to pay to receive an ad-free experience all year. There are other options available with VX as well, but the point is to leverage our platform to offer and engage users with something they are happy to do that will allow you to monetize them in slightly different ways. The point is, publishers can’t sit on the sidelines and hope that everything will be all right, because it won’t.
Piano is not an ad blocking startup. We’ve been handling registrations, customizations, subscriptions, analytics and revenue reporting for many of the biggest names in media around the world for more than five years. It’s our mission to help publishers build dedicated audiences and sustainable revenues.
Perhaps this latest skirmish between Apple and Google will be the last event that will ever threaten the advertising-only business model for premium digital content. But if you believe, like Piano does, that building loyal audiences is the only way for content companies to succeed, we would love to hear from you.
After all, in the end, technology won’t save publishing. Readers will.