Will mobile firms really block ads?

Iphone 5 Image copyright Getty Images

How much do you enjoy seeing adverts pop up as you browse the web on a computer, or increasingly on a mobile phone?

Not much, I bet, but advertising is all that keeps many online businesses afloat and on mobile phones it is turning into a multi-billion dollar industry.

So news from the Financial Times that an Israeli firm Shine has developed ad-blocking software and is claiming that it's about to be installed by a number of mobile network operators is bound to cause controversy. If phone users can opt out of adverts, how will any firm, from the tiniest start-up to mighty Google, make any money from mobile?

Shine's Chief Marketing Officer Roi Carthy tells me the whole point of the software is to give consumers choice: "Mobile advertising is abusive to the consumer, it abuses their privacy, their data use and their battery life."

But for network operators that have watched helplessly as the likes of Google and Apple move to dominate the mobile advertising industry, there's another reason to install Shine's black box in their data centres. It would potentially allow them far more control over the user experience, and make them, not Google, the gatekeepers for advertisers.

There's just one problem - blocking ads would mean discriminating between different sets of data flowing across their networks. That is an offence against the principle of net neutrality, now enshrined in law in the United States and becoming a hot topic for European regulators.

When I contact one major operator to ask about the idea of installing Shine's software an executive tells me it would be "utterly insane." He says that at a time when the industry is treading carefully over net neutrality and other regulatory issues, acting to control traffic in this way would be "beyond suicidal."

Roi Carthy at Shine brushes that aside: "There isn't a carrier anywhere in the world that isn't considering rolling out ad-blocking," he says, and while he will not name any of Shine's potential customers, he says several of them will go public in the next couple of months.

When I ask whether the software poses a threat to the economics of the web, he insists that it will just improve standards and force companies to be more innovative. Shine's system will not block "native" advertising - what used to be called advertorial - and many of the ads that appear in Facebook and Twitter feeds will also be allowed through.

There is no doubt that getting rid of adverts is a popular idea among many consumers, with recent research showing that 5% of global internet users had installed ad-blocking software on the desktop. But, attractive as it might seem to mobile phone networks to give Google a bloody nose, it looks unlikely that many will risk the regulatory wrath that interfering with the traffic would incur.

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