Mobile ad-blocking risks becoming a barrier to innovation

[Commentary] The shift in online activity from fixed-line to mobile devices has thrown up a host of winners. Advertising-funded services have seen revenues soar as consumers increasingly use their smartphones to access the web, unleashing a torrent of marketing spending that is due to hit almost $70 billion in 2015. But not everyone has done so well from the rise of mobile ads.

Among the relative losers are the networks themselves. Margins have been squeezed by the shift to flat pricing packages on data usage and the need for the industry to invest in building infrastructure to deal with the extra traffic. Despite this, wireless operators have not been able to get their paws on advertisers’ dollars. These businesses, which were built on connecting people to one another, have never been good at providing content, and past attempts have been costly flops. Some operators want content providers to hand over more of their revenues from advertising. And lacking carrots to persuade them, they are reaching for sticks. There is never a simple answer to the question of how content revenues should be split with distributors. But coercive tactics cannot be part of the solution. Blocking ads risks stubbing out new entrants and innovation. That is not the way the future of the mobile internet will be secured.