AD-BLOCKERS – UNDERTONE’S POSITION

| Industry

We have been asked many questions about ad-blockers and the impact they can/might have on Undertone, especially in light of the recent Apple iOS 9 announcement. I am writing this post to address those questions, as well as provide perspective.

To date, Undertone has seen minimal impact on publisher inventory availability due to ad-blockers. However, we realize that this is a dynamic situation and as a result changes can happen quickly. Our publisher team monitors traffic levels daily.

Despite the many predictions being made in the press, no one is certain exactly what Apple will do with iOS 9. Apple may allow ad-blocking apps into the App Store. If they do, the first question is: how many users will download them? Will they work correctly on all browsers and in apps? What features will be allowed and not allowed? Many open questions to watch. While we don’t know Apple’s exact motivation, we are not believers in the conspiracy theory that Apple wants to push people to Apple News, or that this is a revenue grab.

UPDATE 9/18: With the launch of iOS9 Apple has now allowed ad-blocking apps into their ecosystem. While it is still early days, we have been able to download several blockers and test them against our ads and the ecosystem in general. Early results are mixed. While all blockers seem relatively effective at blocking standard mobile formats, they’re much less effective at constraining in-app inventory. Additionally, most ad blockers that have been released to date are paid apps, which will constrain the number of people who will decide to install them. Desktop’s adoption has been wide spread, in part, due to the fact that they are free apps. 

At this point, in September 2015, no one knows the real penetration of ad-blocking in the marketplace. Some companies have reported that there are 200 million users of ad blockers. There are also theories that they are more heavily used by young males and also more prevalent across Europe. No one publishes exact numbers for us to know for sure. However, working in a world where ad blocking is a reality requires effort on several fronts.

As a business, Undertone focuses on connecting our clients with consumers across screens and devices. Therefore we are not reliant on a single screen or ecosystem. With our cross-screen focus and breadth of publisher relationships we have many places in which we can reach the consumer. In addition, we invest significant time and money into innovation – looking at new ways and new places to present quality advertisements to consumers – as well as creative and technology.

Further, Undertone works closely with our publishers. Publishers are, as many know, most at risk when it comes to ad-blocking. As their approaches evolve, we expect them to become even more focused on high value, high impact advertising formats. We need to work together to provide the best consumer experience.

Additionally, Undertone works with industry trade groups who are looking at the issue and considering what we as an industry can and should do to not only handle ad-blockers, but to educate consumers on what happens if there are no ads. This forces the conversation around the expectation that “everything is free” – when it really isn’t. “Free” in many places means “subsidized by advertising.” Take that advertising away and suddenly consumers will have access to much less content than they have grown to expect.

Moving forward I expect this topic to remain lively and dynamic. Most importantly, as you can see, Undertone is well positioned to handle the changes should we begin to see impact.

Corey Ferengul joined Undertone in 2013 as COO before being promoted to CEO in 2014. Prior to Undertone, Corey was an executive at Rovi Corporation, a publicly traded digital media software and services company, where his responsibilities included product planning, marketing, strategy, M&A and business development. Corey also has extensive experience through his career in both the management of large multinational teams and the evaluation and execution of M&A transactions. Corey holds a bachelor’s degree in Marketing from Illinois State University and currently resides in Chicago with his wife and children.

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