Ad Blockers and AppleNews: Apple’s iOS 9 Portends a Changing Landscape for Online Publishers and Advertisers

By: Erin L. Bansal

Apple’s recent update of its operating system (labeled iOS 9) includes two significant changes to the way online publishers, and their advertisers, may interact with users.  First, Apple now allows owners of newer mobile devices to download “ad blocker” apps.  These apps provide users with extensions to their Web browsers that can block ads from being shown while the user browses the Web.  In addition, Apple announced the release of its own AppleNews app, which directly provides users with content from over 50 leading media outlets such as New York Magazine and The Washington Post.

For some commentators, the inclusion of ad-blocking apps is a sea change in digital advertising that will protect consumers from unwarranted tracking and intrusion into their online experience.  Computer browsers have long allowed the use of ad-blocking software, but until now, Apple did not allow similar apps to list in its app store.  Use of ad-blockers and calls for their increased ubiquity has grown in recent years.  A study released in August by Adobe and PageFair found that more than 198 million people worldwide actively use ad blockers when searching the Web.  It is important to note, however, that even using ad-blockers, users may still receive certain advertisements.  Some ad-blockers allow advertisers to bypass the blocking if the ads meant certain standards, such as ensuring that ads are clearly marked as such or if they join the Do Not Track list.

For smaller publishers and bloggers, the rise of ad blockers may be the next crack in the already crumbling world of digital advertising.  Many major online publishers, including The New York Times and the Wall Street Journal, have already shifted to a paywall where readers are only given access to the entire contents of a site in return for a subscription fee.  The rise of ad blockers may force smaller publishers who rely on digital advertising as a major portion of their revenue model to likewise seek other sources of revenue in order to survive.  These sources might include, for example, sponsored content where advertisers pay to provide content on the site, or increasing use of links to e-commerce sites, who will pay a fee for delivering users.

Apple’s inclusion of ad-blocks and its NewsApp in iOS9 could simply be a consequence of technology’s seemingly inevitable march toward mobile devices and their apps.  Users increasingly spend their online time on smartphones and their apps.  Forrester Research reported that smartphone users spend 85% of their time on their devices in apps.  This shift has encouraged not only Apple but also other technology providers to move into partnerships with content providers.  Facebook recently launched Instant Articles, allowing it to directly host content provided by its partner-publishers, while Snapchat now includes original news articles within its app.

In the end, it is too early to tell whether the increased use of ad blockers will actually provide users with the content they want.  In any event, major technology companies — like Apple – are clearly going to play an increasingly large role in the provision of content on the Web.  At a minimum, Apple’s moves have once again reverberated throughout the advertising and technology sectors.