Not an ‘immediate threat’ to Facebook and Instagram, says Facebook exec as Apple’s iOS9 sanctions ad-blocking software

Apple's latest operating system allows users to block ads on mobile websites as long as they download ad-blocking software

PUBLISHED : Wednesday, 18 November, 2015, 5:20pm
UPDATED : Wednesday, 18 November, 2015, 6:20pm

Facebook and Instagram do not view Apple’s approval of ad-blocking software in its latest iOS9 mobile operating system as a threat so far, according to a Facebook executive.

Apple’s iOS9, launched in September, allows users to block ads on mobile websites as long as they download ad-blocking software.

Although the ad-blocking software is targeted at mobile websites which tend to display banner ads, Apple approved Been Choice for its app store in October, which claimed to block native advertisements in apps such as Facebook and Apple News.

However, Apple later backpedalled and removed Been Choice from its app store, reinstating the application only when the developers removed the native ad-blocking functionality.

Despite the fact that there are now no native ad-blockers available in app stores, the ability to create an app that blocks in-app advertising as well as Apple’s stance against mobile ads does not bode well for companies such as Facebook and its photo-sharing subsidiary Instagram, which consider advertising as a major revenue stream.

But Jayne Leung, Facebook’s head of Greater China, loses little sleep over the issue.

“Ad-blocking [has not] been impacting any of Facebook’s entities so far,” said Leung in an interview with the South China Morning Post. “We continue to work with people in the ecosystem, whether it’s the platform providers or different handset manufacturers.”

She added that Facebook does not consider the ad blocker as an "immediate threat.” 

Facebook raked in over US$4 billion in its third quarter earnings this year, surging 45 per cent compared to the same time last year. Advertising revenue makes up about 95 per cent of Facebook’s total revenue.

The US social media giant acquired Instagram for US$1 billion in April 2012.  In using the Instagram platform in combination with Facebook, the idea was to bring about a platform for global ad services.

Instagram ads appear directly in users’ Instagram feed, and merchants can utilize Facebook’s targeting capabilities in their Instagram campaigns to reach their desired audience. 

“That’s a huge advantage for merchants who want to advertise on Instagram, because with Facebook data we know [users’] age, gender, [and] interests … which would help us to elevate the relevance aspect [of Instagram ads],” Leung  said.

According to Leung, Facebook also works with advertisers to help them put out better Instagram advertising campaigns.

When Instagram first started testing Instagram ads in 2013, co-founder and CEO Kevin Systrom personally vetted each advertisement and had the power to reject or suggest changes to the ads.

But with advertisements now open to merchants globally, advertisements are now approved via a machine approval process or reviewed by a team at Instagram, based on whether the ads comply with Instagram’s policy and community standards, says Leung.

“We don’t vet [ads] on a creative level per se, but we work with the advertisers … to help them understand what’s important … when building an Instagram campaign,” she said.

Instagram’s advertising platform was made available to Hong Kong advertisers in September, and notable advertisers include the Hong Kong Tourism Board, P&G and Sony Mobile, all of whom reported a surge in ad recall rates for their Instagram campaigns.

A recent survey conducted by Nielsen Audience Research found that Instagram users in Hong Kong are highly educated and have lots of money to spend.

Users between 25 to 34 are more trend-conscious and sporty, while those over 35 find premium and creative things more appealing, the survey found.

“Instagram is the creative canvas for a young and highly engaged community in Hong Kong.  People come to Instagram for visual inspiration and we are thrilled to offer solutions that create value for the community and drive impactful business results for local businesses of all sizes,” Leung said.