Google, Yahoo clash with 'blunt' ad-blocking firm

Benjamin Faes, MD of media and platforms at Google; Nick Hugh, VP and GM of advertising for EMEA at Yahoo; and Roi Carthy, CMO of Shine Technologies
Arjun Kharpal
Benjamin Faes, MD of media and platforms at Google; Nick Hugh, VP and GM of advertising for EMEA at Yahoo; and Roi Carthy, CMO of Shine Technologies

Google and Yahoo have accused ad-blocking software Shine of destroying the relationship between advertisers and consumers, after an executive from the company called its solution a "nuclear weapon" threatening the industry.

In a heated debate at Mobile World Congress (MWC) on Tuesday, executives from Google and Yahoo clashed with Shine's chief marketing officer (CMO) over ad-blocking.

Ad blocking software use grew 41 percent in the 12 months to August 2015 and there are now 198 million active adblock users around the world, according PageFair. Ad blocking was estimated to cost advertisers $22 billion last year.

"Shine is the single biggest threat in the history of advertising...it's a stellar opportunity to reset the relationship with consumers," Roi Carthy (CMO) of Shine Technologies said.

"We are not against advertising...there's a misconception that Shine is against advertising...we do believe new rules of engagement need to come about."

Carthy claimed that consumers were being "abused" by advertising technology.

'Blunt' solution

In a survey conducted by Adobe of 260 adults, 42 percent of people said they feel ad-blocking improves the performance of their computer. The survey also found that marketers have not worked out mobile advertising either, with many ads using too much data to load, thereby slowing down a device.

The rise of the blocking software has caused backlash from advertisers and particularly companies like Google and Yahoo which rely heavily on revenues from advertising.

Benjamin Faes, managing director of media and platforms at Google, called Shine's technology a "blunt" solution that punishes users and good advertisers.

"Blocking all ads I think it's diminishing my experience of advertising and in that case we see an issue for the user themselves. More and more publishers just can't afford to give their content for free...a user with an ad-blocker will keep running on websites who ask the user to pay for content then they unblock the ad-blocker and then see all bad ads anyway," Faes said during the panel.

"I just don't want to ruin that ecosystem...I'm really concerned by this black-and-white think," the Google executive added, suggesting that there needs to be a more nuanced approach to the issue.

'Destroying' relationship

Chris Ratcliffe | Bloomberg | Getty Images

Ad-blocking has gained the support of some major technology giants, however. Last year, Apple announced that Safari on iOS 9 would have ad-blocking capabilities. Meanwhile, Shine has struck key deals with mobile operators.

Caribbean carrier Digicel announced last year it would roll out Shine's ad blocking software across its networks. And European carrier Three said it would also implement the technology this year.

But Yahoo said that said the solution would punish good advertising and ruin the relationship between consumer and advertiser.

"You're blocking at a network level, but actually at a publisher or property level some (ads) are very good and if you block everyone you completely destroy the value exchange and the ecosystem," Nick Hugh, vice-president and general manager of advertising for EMEA at Yahoo said.

'Military grade' targeting

In a tense exchange between the executives, Carthy stepped up the rhetoric, claiming tech companies were using "military grade" tracking targeting and profiling of users and his solution is sending "a very clear signal" that this was not right. He said shine wanted "new rules of engagement" between consumers and advertisers.

Carthy did not stop there, likening Shine to a "nuclear weapon" facing the advertising industry,a remark Yahoo's Hugh dismissed as "a bit dramatic."

The trio did not resolve their differences but Google and Yahoo both talked about what they are doing to combat the rise of ad-blocking. Google said that its "Accelerated Mobile Pages" feature - which allows people to create stripped down web pages to load faster - will help advertisers get their ads seen more.

"That challenges the ad to be as quick as the content, that's the type of thing that really resets the contract we have between publishers and users," Faes said.

The ad-blocking debate is not likely to end soon but not all advertisers are gloomy about it.

"A whole golden age of advertising can evolve if we got it right...this is a good opportunity...we've got this inflection point where new formats are evolving, how do we seize the moment and get it right?," Pete Blackshaw, vice-president of digital and social media at Nestle, said during the panel.