Will ad blocking and mobile bring about a renaissance in creativity?

We’ll come to the thinking behind Apple’s move shortly, but let’s look first at the consequences of ad blocking. A lot of people have installed ad blockers on their computers – it means that machines consume less power, run faster, and you don’t get annoying pop-ups and the like. Now you can do the same on iOS and Android devices – and people have been downloading ad-blocking apps like crazy, sending them – Crystal and Purify Blocker are only two of the most successful, at numbers two and 10 respectively at the time of writing - soaring to the upper reaches of the app charts.

But there’s another side to the equation. A lot of sites rely on ads for revenue (journalism and other forms of content creation have to be paid for) and if everyone installed ad-blockers on their browsers, we might start having to pay for content, instead of it being funded by advertising.

Some have even predicted the end of the free internet.

"Ad blocking is a threat to the whole advertising industry," David Frew, senior programmes manager for the Internet Advertising Bureau trade body, told the BBC this week. "It's possibly heralding the end of online advertising in its current form. It's essential people understand that online content isn't free - there's a value exchange. Facebook is monetising you - your data is valuable."

Of course, some people loathe advertising – they see it as an evil, people trying to sell us stuff we don’t need. But I’m willing to bet that most people are happy to trade off advertising in order to get stuff for free. In fact, most of us enjoy good (entertaining, useful, clever or informative) advertising.

And there have been ad blockers for decades. In the first few decades of commercial TV, for example, the kettle and the promise of a cuppa allowed people to escape ad breaks. Then VCRs and PVRs allowed them to fast-forward through the breaks.

To get round the lure of the kettle, ad men had to up their creative game and make ads that held the attention. As a result we got the 'golden age of advertising' from the 1950s to the late ‘80s: we all remember those great ads for Hovis, Cinzano, B&H, Silk Cut, Heineken and the like (and before the advent of TV, beautifully-crafted print ads that stopped the reader turning the page). And who can forget those traffic-stopping Wonderbra ads?

Restrictions on advertisements - in the form of ad blockers – might force a new creative renaissance. I’m an optimist at heart, and believe that it will. Graeme Douglas, chief strategy officer at the media network Havas, put it very well in one of the newspapers this week: “Anyone in advertising who sees this [ad blocking] as a negative threat and not a positive challenge is in the wrong game.”

And in any case, consumers are aware that content must be funded somehow, and most will figure that some form of advertising isn’t a bad value exchange. For example, we’re prepared to live with ads on Google in return for fast, accurate and free web searches. And most - not all, but most – TV viewers would prefer an ad-funded free-to-air service like ITV to a subscription model.

The problem with advertising today that there is too much of it, and that too much of it is of poor quality – particularly in the digital space, where automation rules. More human input and imagination, in both the creation and placing of advertising, will help improve the craft, as will the intelligent use and interpretation of data. And I think PR, with its ability to influence in more subtle ways, might well have an increasingly important role to play as well.

And new forms of advertising (aside from display ads like the now old-fashioned banner, skyscraper or pop-up) are gaining traction – most notably, native advertising and in-app advertising, both of which are unaffected by ad blockers.

Native advertising offers the industry (including hard-press media owners) perhaps the most exciting possibilities. Not only is it immune to pop-up blockers, it provides a great value exchange to both the consumer and media owners.

The problem these media owners face is acute. Since it started to creep into our lives 20 years ago, the internet has got us all used to free stuff. Aside from a few specialist publications – the FT springs to mind – putting publications behind paywalls doesn’t work; and with ad blockers installed all over the place, they are not going to get display advertising revenue.

Darren Goldsby, chief technology officer for Hearst Magazines UK, publisher of Cosmo and Good Housekeeping, says that ad blocking is "as big a disruptor for us [publishers] as the internet was when it came along". However he doesn’t seem to share David Frew’s pessimism.

"Ad blocking is a threat and the number ad blockers is likely to increase. But that means we have to work harder to provide content in a commercially successful way that people want to read," Goldsby told the BBC.

Lee Henshaw, managing director of Silence Media, the company behind Primo, a programmatic marketplace offering accountability to brands looking to engage their customers with high-impact online campaigns, recognises the challenges to publishers and agrees: "The popularity of ad blocking is a reaction to our industry's current poor creative standards due to its lust for tracking.

"We don't see any evidence that this is going to change and we're rapidly preparing for a future in which the publishers we work with beat the ad-blockers by serving our ads themselves."

This is likely to mean more native advertising in the form of sponsored content, advertorials, branded micro-sites, and so on – something that Hearst has always been good at and there’s no reason why this skill can’t be migrated online.

But let us return to Apple.

The Cupertino giant allowed ad blocking on iOS because it wants users to migrate from browsers to apps. It doesn’t care about traditional online advertising (which rivals like Google largely own), it wants to serve us ads in the apps we use – and in-app advertising is very difficult, if not impossible, to block.

Some analysts have predicted that shifts in internet economics will simply put more power in the hands of Facebook, Google and Amazon – one prediction is that by 2020, 70 per cent of European online advertising will be controlled by Facebook and Google. Apple will find it difficult to grab much of a share of that, but in apps, where it has a lead, it can take control.

It’s all about control of the digital space. And those that control digital advertising will make the most money.

That’s because, according to a new report, just over half of all UK adspend will be digital next year, Carat has predicted, with the total market growing by 6.4 per cent in 2015. This will be the first time that digital advertising will make up the majority of the market.

Digital is the only media channel that is predicted to grow by double digits this year (15.7 per cent) and in 2016 (14.3 per cent) with the growth in digital advertising being driven by a high demand for mobile (where the app rules) and video ads, especially across social media. Mobile advertising is anticipated to grow by 51 per cent this year.

TV will have a 42 per cent market share in 2015, the report says, and is forecast to grow by 2.6 per cent this year globally, so it’s likely to remain an important channel for some time to come (as are radio, and outdoor, which is receiving a fillip thanks to technical innovations).

But the real battle now is on the little screens we carry around in our pockets, not on our laptops and tellies. And here too, I’m optimistic that there will be a renaissance in creativity and innovation once everyone fully understands the channel and learns to marry it to good old-fashioned storytelling.

Tony Walford is a partner at Green Square, corporate finance advisors to the media and marketing sector.