Lack of regulatory framework mars in-app advertising

Lack of regulatory framework mars in-app advertising

Author | Ronald Menezes | Tuesday, Jun 14,2016 7:51 AM

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Lack of regulatory framework mars in-app advertising

According to latest survey conducted by VoIP calling app nanu, smartphone users have seen a rise in their mobile internet data bills by up to 50 per cent. The study also revealed that 42 per cent of Indians did not even know that their data is consumed by video advertisements even when they are not clicking on it.

The study further revealed that only 10 per cent of those surveyed used ad blocking apps on their smartphones. As per latest reports, TRAI is taking this issue into consideration and has initiated steps to address such concerns.

Mobile ads & app publishers

Experts feel that mobile ads have been one of the main sources of income for app publishers and without publishing these ads there could be a disruption in the eco system of the mobile advertising market.

When asked if TRAI’s efforts would benefit the user or publisher Abhay Doshi, VP, Product Management & Marketing, Flytxt said, “It is a futile attempt, the market is very complex and the ad traffic will not even account for 1 percent of the user’s data.”

He also added that Internet was never free and was always powered by ads. “If you block these ads then you change the eco-system. This will in turn affect good content. Let the users decide what they want to do. In such a case a telecom operator can either charge more for data that will provide ad blocking systems, and if not, users may start using ad blocking technologies,” he added.

Ruksh Chatterji, COO/Co-founder, Revx, said, “The mobile ads programmatic eco-system hasn’t quite taken off as yet in India. Publishers in India typically have low fill rates, i.e. of 100 ad slots only a small percentage gets used. Tactically, constraining the supply (i.e. number of ads served per user) will not affect the ecosystem right now, as the system currently has excess supply and it is the demand for mobile ad space which is the problem in India right now. However, in the long run this could be a constraint.”

When asked about how this could affect the monetization of apps and  growth of newly launched apps as well as the established ones Chatterji added,“In many cases ads are the only means of monetization for apps, given that users are unwilling to pay subscription fees for the service provided by the app . If ads are stopped or restricted, these app based or online ventures and services may not be able to sustain their businesses.”

TRAI’s intervention may only make matters worse according to experts. The relationship depends between the user and the publisher and the publisher has rights to monetize through ads.

Mukesh Agarwal, CEO, Co- founder Revx explains, “It would be extremely difficult to intervene or control the number of ads served to a user. The relationship is really between consumer and publishers/app developers. At the end of the day, the user has made a choice to use certain apps or sites for free, and publishers rightfully monetize through ads.  If a publisher is showing too many ads or irrelevant ads, it already runs the risk of user churn.”

Agarwal feels that the government should put policies in place so users are aware of their data privacy rights.  As for mobile data usage, the arrangement is between user and internet/mobile service provider. Any intervention on restricting data usage for ad viewing goes against the basic principle of net-neutrality, which is fundament to digital innovation in India.

With an increasing number of internet data subscribers the matter may only escalate for TRAI to intervene and ask for suggestions from its stakeholders. For now, in the absence of any regulatory framework, the consumers continue to be at the receiving end of this debate.

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