We know the race for the Mobile Ad dollar is hot and will be brutal because of the global trend toward Mobile Internet Access is huge and so is the ad revenue potential- just ask Google and Facebook. In fact eMarketer.com in April this year reported that the Mobile Ad Spend is to top US$100billion Worldwide in 2016 with USA and China accounting for nearly 62% of global Mobile Ad Spending.
The fight for the Mobile Ad Dollar has now come home to us here in the Caribbean, with Digicel throwing down the gauntlet, first. Digicel which has 13.6 million subscribers across 31 markets, mostly in the Caribbean, says it will use an ad blocking technology from a company called Shine, to block display and video ads in both mobile browsers and apps. They are starting with Jamaica first.
The BusinessInsider.com reported todat that “Perhaps controversially, ad blocking for Digicel customers will roll out as standard. It won’t be an optional add-on, although the company says it may offer customers the ability to switch off the facility. The only sites that won’t see their ads blocked will be “certain local news sites,” a Digicel spokeswoman told Business Insider.
In a press release sent to SiliconCaribe today Digicel peddles the argument that this controversial move is ” Improve Customer Experience and help drive broadband access.” The real reason it seems is made clear as they stated in their release. They are “calling for ad networks like Google, Yahoo and Facebook to enter into revenue sharing agreements to bridge the digital divide.” So the real issue- It’s about money!
Digicel is in essence saying – we spent a crap load of money to build our infrastructure and grow our market and if you want to get to it, you have to pay the toll at our gate. Additionally, data and mobile ads are the two major ad revenue for Mobile Service Providers in the future based on Mobile Internet Access trends. That’s the essence of this decision. This is also was the rationale for them blocking VOIP App Viber which had not had a commercial agreement with the Telecom Provider.
Additionally, let us not forget that Digicel is now a media company (Loop, SportsMax, Telestar, Internet services), and in fact, the medium to long term growth strategy seems to be anchored in media and content. What is the dominant (traditional) business model for media companies? Advertisements. This most recent move is apart of the long term strategy.
Digicel’s press release continues by saying. “Starting in Jamaica and rolling out to its other markets in the Caribbean and South Pacific in the coming months, Digicel will work with Israeli start-up, Shine Technologies, to be the first operator worldwide to deploy Shine’s mobile ad control technology at the network level. Shine’s technology blocks display and video ads inserted by ad networks in both mobile browsers and apps.
For network operators meanwhile, for whom bandwidth is one of the most costly considerations, Digicel is looking to companies like Google, Yahoo and Facebook to enter into revenue sharing agreements with it so that this money in turn can be reinvested in network deployment and ultimately the bridging of the digital divide. Currently, these companies do not pay to make use of the network and the services they provide on it suck up bandwidth to make money for themselves through advertising while putting no money in.”
Digicel argues is that “ads use up as much as 10% of a customer’s data plan allowance, and those companies are not fairly compensating Digicel for use of its bandwidth. Digicel says it will reinvest that money back into its infrastructure.” According to BusinessInsider.com
Lots of Questions Arise From the Caribbean
1. Will Digicel give the customers the CHOICE to view or not the Mobile Ads? If customers buy their data, aren’t they free to use that data as they please, which includes blocking ads or not as they go about their mobile viewing experience? So why is Digicel seemingly overstepping its boundaries and making that decision on behalf of their customers?
2. In Jamaica we have the OUR, Office of Utilities Regulation – which regulates the Mobile/Telecom Sector. Recently, they handed a decision to Ministry of Science, Technology, Energy And Mining about Digicel’s blocking VOIP apps on their customers a while back, but that has been kept hush hush – what will OUR say about this issue?
3. What does the Ministry of Science, Technology, Energy And Mining in Jamaica has to say about this?
4. Why only a few local news sites been spared from the Adblocking decision?
5. How does this hurt our help Mobile App development and Entrepreneurship in the Caribbean ?
6. What implications there are to Net Neutrality issue?
7. How does Ad Blocking Technology Work and doesn’t this flout the data privacy issues of Caribbean Mobile consumers? Further, Where is the Caribbean when it comes to covering the rights of consumers in this and other data privacy issues?
Please note that this is against the backdrop that the Top 5 English Speaking Countries on Facebook are:
- Jamaica 1,000,000 people
- Trinidad 640,000 people
- Bahamas 190,000 people
- Barbados 150,000 people
- St Lucia 80,000 people
Haiti has 920,000 people on Facebook and is now one of Digicel’s golden markets.
Added to that that Google, Facebook and Yahoo are all in the Top 5 sites most visited by Digicel’s biggest Caribbean Markets. – Jamaica, Haiti, Trinidad. It’s going to be interesting to see how FLOW, Media Entrepreneurs, Caribbean Mobile App Developers and Entrepreneurs respond to this news.