Ooyala looks to mobile as the next target of ad-blocking’s ‘raging fire’

By Barry Flynn, Contributing Editor

With the cost to publishers of ad-blocking technologies forecast to nearly double from around $22bn in 2015 to $41bn this year, ad-tech company Ooyala suggests that the next big battle could take place on the mobile platform.

“Today ad-blocking is mostly a desktop phenomenon,” declares Rags Gupta, the company’s General Manager, EMEA. “To what extent does that become more of a mobile phenomenon? That’s something we’re watching very closely,” he says.

Ooyala, which introduced an anti-blocking plugin to its video player last year, compares the situation to combating piracy, where there’s an ongoing battle between rights-owners and hackers that drives continuing technology developments on both sides.

Apple’s move last autumn to allow ad-blocking extensions to work in its Safari browser under Version 9 of its operating system, iOS, is just such an example, notes Gupta, but it’s only one of several contributing factors that has turned what he describes as a “slow burn” into a “raging fire”.

One is simply the fact that ad-blocking has become a mainstream activity: “I think it’s safe to say that it’s beyond the early adopter community,” comments Gupta. Another factor is that publishers’ business models have come under a lot of pressure: “When you might have a double-digit percentage of your inventory vanish and it’s just not monetisable, then clearly that’s going to raise a lot of flags,” he points out.

As for what’s ultimately behind the phenomenon, Gupta is hesitant to identify any one cause. “Certainly, publishers and the ad industry have played a part in pushing the limit, if not abusing, the user experience in terms of page loads and ad calls and all that kind of thing,” he asserts. “But I don’t think it’s just that,” he adds, suggesting that consumers have also yet to come to terms with the trade-off they make when they sacrifice data and privacy in return for “utility and content.”

Gupta reckons there are there a number of different types of solution to the impasse. “The first is what the industry can and has done – which is standards, rules and guidelines in terms of ad experience and in terms of what it is acceptable,” he suggests.

An example of such industry action is represented by the so-called ‘LEAN Ads’ guidelines introduced by the UK Internet Advertising Bureau and its counterparts in other countries last October, which are designed to promote a better user experience.

Industry can also, in principle, take legal action against companies that make ad-blocking software, says Gupta, but he points out that in Germany, a case brought by TV groups RTL and ProSiebenSat1 against Eyeo, the creator of the popular AdBlock Plus browser plugin, was thrown out by the courts last May.

The second category of solution involves publishers changing their business model, says Gupta. This can take the form of altering the balance between subscription and ad-funded content on their sites, introducing ‘native’ ads which are more difficult to block, or reducing ad loads to make them “more respectful of the user experience.”

The third category is the use of technology. This can range from the publisher site simply refusing to make content available to a user’s browser if it deploys ad-blocking software, through showing a message explaining that content needs to be paid for (but still displaying it), to bypassing the ad-blocking software altogether.

Ooyala’s Unlock solution is an example of the latter approach, which works by ‘spoofing’ ad-blockers – making them think that when a browser makes an ad-call, it is actually calling up a piece of content rather than the ad.

Gupta says Unlock is one of “the fastest-growing products” in Ooyala’s portfolio, and reveals that for one of its larger customers last year it made “the difference between them being in the red or the black for the year.”

In the end, Gupta believes that the deployment of all three types of solution will mean that some sort of equilibrium is eventually reached. Again, he compares the situation to that which currently exists vis-à-vis piracy. “Piracy still exists,” says Gupta, “but in a way you don’t really hear warnings of gloom and doom about it.” This is because, he suggests, the players have evolved their business models, products and user experiences to a stage where consumers are faced “with a better offering than the piracy option. In fact, the end-users have come up with a happy equilibrium.”