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Ad Block Apps: RIP Digital Ad Revenues?

CASE STUDY, DIGITAL MARKETING
ET Cases, 14 Pages

Case Preview

Ad Block Apps: RIP Digital Ad Revenues?

 

“The rise of ad blocking is a symptom of a real problem: Ads suck. To slow the adoption of ad blocking and make the Internet a better place, we need to make advertising better.”1

- James Avery, CEO, Adzerk


There has been an ongoing debate, since September 2015, among the Indian digital advertising industry experts, over the ad blocking applications, triggered after the announcement of the launch of iOS9 by Apple Inc. (Apple), the California, US-based consumer electronics company. On June 8th 2015, Apple announced the launch of its new operating system iOS9 (codenamed ‘Monarch’), at WWDC 2015 (World Wide Developers Conference, 2015). The new operating system iOS9 allowed users to download applications from Apple store that would block ads on their mobile devices.

While the users were relieved, players in the digital media industry were concerned about the losses that the industry would likely incur because of the ad blocking apps. On the other hand, advertisers or website developers had integrated applications – ad block blockers – that would nullify the effect of ad blockers and enable the display of ads on the users’ phones and browsers. While many companies and industry experts were concerned about the repercussions of the ad blocks, few perceived it as an opportunity for advertisers and agencies to create great content that could get past the blockade. Are ad blocks innovators (enabling better customer experience) or intruders (into companies, especially advertising companies’ coffers)? Does the Indian advertising industry need to worry about the ad block apps or would it get past them?...........................

 



1 James Avery, “Ad Blocking Will Keep Growing Until We Make Ads Better”, http://adexchanger.com/data-driven-thinking/adblocking-will-keep-growing-until-we-make-ads-better-2/, September 11th 2015 (accessed date: February 26th 2016)

Teaching Note Preview

Ad Block Apps: RIP Digital Ad Revenues?

 

Synopsis

What is the purpose of ad blocking apps? While they enhance customer experience by blocking ads while browsing content on PCs or smartphones, they seem to be disrupting the entire ecosystem of digital advertising. How should they be looked at as – innovators or intruders? With the incurring losses because of the ad blocking apps, what should the publishers or advertisers do to get past the ad blockers? The case study helps in analyzing the impact of ad blocking apps on  digital advertising ecosystem.

The ad blocking apps have been there for quite some time, but in September 2015, Apple announced its iOS9 for its mobile devices, which enabled and supported the ad blocking apps purchased from its stores. While the users were relieved, the digital media industry incurred losses because of these apps. On the other hand, advertisers or website developers had integrated applications – ad block blockers – that would nullify the effect of ad blockers and enable the display of ads on the users’ phones and browsers. However, few saw it as an opportunity for advertisers and agencies to create great content that could get past the blockade. Does the Indian advertising industry need to worry about the ad block apps or would it get past them?

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students/participants should be asked to be prepared with the theoretical concepts of digital marketing, digital marketing platforms, customer-centric innovation, competitive strategy, business ecosystem, revenue model and the value chain.

Case Positioning and Setting

This case study can be used in the MBA Program for the following:

  • -Marketing Course – How technology advancements and innovations in digital marketing-related products and services can affect the entire ecosystem, i.e., marketers (companies), digital content agencies, digital marketing platforms, the websites, instruments (TV, smartphones, tablets, etc.) and also the consumers
  • -Digital Marketing Course – How a company’s customer-centric innovation can affect the entire ecosystem, i.e., how ad blocking applications can affect the whole lot of players involved

 

Assignment Questions

  • I. Why is there an imperative need for digital advertising in India?
  • II. Discuss the business dynamics and ecosystem of digital media and advertising industry in India.
  • III. Discuss and debate on how the ad blocking apps would impact the digital advertising ecosystem. How should publishers and advertising companies respond to ad blocks as they are losing advertising revenues?

 

Preamble to the Case Study Analysis and Suggested Orchestration

This case study provides an opportunity to understand the nature, characteristics and competitive scenario, the business ecosystem, value chain and revenue generation system of the Indian digital media and advertising industry. It also analyzes the pros and cons (to the mobile users and ad-industry) of having ad blockers on the users’ mobile devices. It also allows a discussion on the strategies that the advertising industry players could take up in order to get past the ad blockers. This case study analysis was carried out as presented in Exhibit (TN)-I.......................

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Abstract

This case study can be used to analyze the creative dichotomy between the digital advertising potential and the ad blocking applications and its impact on the industry. The launch of iOS9 by Apple Inc., in June 2015, had started a debate among the experts of the Indian digital advertising industry over the ad blocking apps, which could be downloaded by iOS9 users to block ads on their mobile devices. There were other ad blocking apps, for Android, Windows and other platforms as well and the users were increasingly using these ad block apps on their devices to browse ad-free content. However, the digital media and advertising industry was concerned about the losses it would likely incur because of the ad blocking apps. On the other hand, advertisers, publishers or website developers had developed integrated applications – ad block blockers – that would nullify the effect of ad blockers and enable the display of ads on the users’ phones and browsers.



Pedagogical Objectives

  • To have an overview of the imperative need for digital advertising and understand the business dynamics of digital advertising
  • To understand digital advertising’s ecosystem, i.e., how a conglomeration of several service providers (advertiser, agency, agency support/buyer, ad networks, publisher/content, data clearing houses, exchanges, etc.) enable an effective digital advertising’s efficacy
  • To discuss and debate on how, if at all, the ad blocking applications would impact the digital advertising’s ecosystem

Case Positioning and Setting
This case study can be used in the MBA Program for the following:

  • Marketing Course – How technology advancements and innovations in digital marketing related products and services can affect the entire ecosystem, i.e., marketers (companies), digital content agencies, digital marketing platforms, the websites, instruments (TV, smartphones, tablets, etc.) and the consumers
  • Digital Marketing Course – How a company’s customer-centric innovation can affect the entire ecosystem, i.e., how ad blocking applications can affect the whole lot of players involved



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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