Google faces the prospect of seeing its mobile adverts blocked by a number of European operators, as part of a broader battle between telecoms companies and over-the-top (OTT) content providers.
Several European operators are preparing to deploy ad blocking software from Israel-based start up Shine by the end of 2015, the Financial Times reported, citing an executive at an unnamed European operator.
The executive told the FT that consumers will initially be offered the chance to opt into the blocking software, but that operators are also considering a blanket rollout in an attempt to get Google and other media companies to share their mobile advertising revenues.
Shine CMO Roi Carthy told the newspaper that millions of mobile users are likely to opt-in to ad blocking when it is offered, noting that such a move would be "devastating" to the broader online advertising market.
Research company eMarketer in March predicted that UK marketers will spend £3.2 billion (€4.4 billion/$5 billion) on mobile marketing in 2015, or 20.1 per cent of total media ad spending in the country. That compares to the £2.2 billion spent in 2014, which equated to a 14.7 per cent share of total spending.
Google generated $15.5 billion (€13.6 billion) from advertising revenues in the opening quarter of 2015, though the company did not provide a breakdown of mobile income versus other digital advertising.
The telecom executive told the FT that blocking adverts from Google and other companies would be possible despite strict European Union net neutrality rules, and that taking mobile adverts down for just an hour would be enough to bring digital media companies to the negotiating table.
Guillaume Le Mener, head of data monetisation at Tektronix Communications, said mobile operators are beginning to fight back against a tide of OTT and digital players, citing Verizon's acquisition of AOL this week as an example.
"As today's subscribers do almost everything on their mobile devices, giving operators better insights into their likes and dislikes than any other internet company, the potential for operators to become important players in the marketing and advertising space is only going to increase," Le Mener commented in a statement emailed to FierceWireless:Europe.
Le Mener added that "AOL's advertising platform was a key driver" behind Verizon's acquisition, and that such deals represent "an important shift that needs to happen before operators' can unlock the true value of their network," and avoid becoming dumb pipes.
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