Commentary

Telecom Exec Proposes Advertisers Pay To Play On Their Networks

Ad blocking is about to become a big, big issue on mobile. With the rollout of iOS 9, Apple will let third parties provide ad blocking solutions that hook into Safari. As the widely cited study from Adobe and PageFair contended, a surprising number of consumers have embraced ad-blocking software in just the last year to fight off malware, ad clutter and plummeting Web page load times. In the U.S. alone, the study reports over 45 million active users of blocking software, up 48% in the first half of the year (vs. the same period last year)

On mobile, the stakes can get considerably higher. Not only is ad clutter (especially on supposedly “responsive” sites) even more insufferable on a small screen, but load times can become tortuous. Worse, in theory, consumers are double-charged for mobile advertising:  paying once with their attention, and a second time because every ad served uses up part of their own data plan.

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Deutsch Telekom executive Tomasz Gerzberg says  advertisers, not consumers, should be paying network operators for the data their ads use. In a brief LinkedIn post, he outlined the basics of the idea.

Gerzberg believes mobile users are starting to install ad blockers because “they don’t consider mobile ad deliver a fair business.”

He is not the first to propose the idea that advertisers pay for the freight, but he is among the first major telecom execs to do so.

“The future model of mobile advertising delivery needs to be changed," he writes. "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.”

It should be noted that Deutsch Telekom itself disavowed any such plan to charge advertisers, insisting that Gerzberg was making a personal post, not forecasting a policy shift. Still, it isn't a surprising proposal from a telecom, since this part of the industry has felt itself cut out of much of the app and ad ecosystem over the last five years. Let’s not weep over telecoms, though. They profited handsomely by the massive upgrade to smartphones and advanced data plans during these same years. Their pipes may be “dumb,” but the business isn’t.

On the surface, it makes sense that consumers should not be charged to be advertised to. But it's unclear how many consumers are actually aware that they are. I haven’t seen a study yet showing how much of an average data customer’s allotment is eaten up by ad bytes each month. As mobile advertisers move toward streaming media, this likely will become an even greater issue.  

But Gerzberg’s claims strike me as a bit disingenuous and self-serving. His argument that an advertiser-charged model would reduce spam and increase conversions is arguable at best. Other than adding another layer of cost to the system, thus deterring some bottom-feeders, I am not sure how his approach would improve ad quality or targeting.

But I think he is likely wrong about what motivates people to block ads. I think ad blocking is about the experience more than anything else. Ads are slowing down sites, breaking technology, consuming unreasonable amounts of screen space. This is more apparent to consumers than anything else. Traditionally it has been publishers who crafted and protected the media environment on behalf of users. In the digital era, media have ceded their natural role to third parties, creating an ad ecosystem indifferent to media experiences.  

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