Mobile advertising on Android platforms threatened by new software

Experts suggest this is a cause for worry for social media sites and online games who have been struggling to boost advertising revenues, as more and more people shift to mobile phones from computers.

Although at the outset the software will not cause a shrink in revenue, an adoption of just 5 percent could start causing problems in the long run.

The software is expected to have a high uptake mostly in Germany, where close to 10 percent of users have adopted the computer AdBlock version, while a lesser adoption is expected in the UK and US where it has attracted a 2 to 3 percent acceptance.

According to some experts, the software undermines the whole aspect of the social media business model, where advertising plays a critical role in sustaining companies such as YouTube.

The software could also be a big blow to advertising revenues, especially on websites that provide content for free with no other means of raising revenues.

To a sizeable percentage of users, the software is heralded as a relief with some of them considering online advertising as disadvantageous.

The company however says that a number of websites and ‘unintrusive’ advertisements will remain on the white list as protection to various classes of publishers and bloggers who would be greatly affected by advertisement blocks.

Advertising revenues through the mobile phone network hit $5.3 billion in 2011 and are expected to be about 4 percent of the total advertising revenue by 2015, according to IT research leader Gartner.

“Mobile advertising is now recognized as an opportunity for brands, advertisers and publishers to engage consumers in a targeted and contextual manner, improving returns,” said Stephanie Baghdassarian, research director at Gartner.

New advertisement blocking measures and tools could dampen the hopes of the industry that had earlier projected revenues of over $20 billion in the next 3 years.