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Apple Inc. (AAPL) Ad Block Already Sowing Destruction

Apple Inc. (AAPL) iPad Pro

Apple Inc. ’s latest OS that permits ad-blocking extensions could create a big headache for retailers, according to a Fortune report. An report by Dan Primack at the outlet shows that iPhones enabled with content blocking apps are unable to fully load the e-commerce sites of major retailers like Wal-Mart Stores, Inc. , Lululemon and Sears.

Apple Inc. (AAPL) iPad Pro

Apple on a War Path with Retailers

Using “Crystal” — the top paid iOS app – for online shopping, led to several glitches. Images do not appear, data goes missing and items don’t get added to cart.

Retailers derive 60 percent of traffic through online ads that apps like Crystal and Purify Blocker are designed to keep out. Also, in case of mobile sites, such ad-blocking technology renders back-end code like Adobe Omniture or Google Analytics useless. In short, a huge outcry from retailers is just around the corner.

Chris Mason, CEO of Branding Brand, who first brought the issue to Fortune’s notice, said the situation was bleak.

“This upcoming holiday season, the vast majority of e-commerce dollars will come through mobile devices. But content-blockers are going to cause a lot of problems. First, the experience for customers will be lessened. Lots of sites will be missing content, have broken links or customers won’t be able to add certain items to their shopping carts. They’ll probably just think the site is broken, but it’s really their content blocker. Second, retailers will be data-blind, or at least data-dark. It will really impact their ability to make quick judgments.”

Retailers at the Mercy of These Apps

For retailers, this is clear and present danger. Sure, only a small number of people have downloaded ad-blockers till now. But the trend is picking up steam. Crystal had over 100,000 downloads during a twelve hour promotional run in the App Store.

So once they reach mass penetration, expect things to get much tougher for these retailers. The percentage of e-commerce being done through mobile devices is increasing. And oddly, a disproportionate percent of these purchases are through Apple Inc.  iPhones.

Crystal creator Dean Murphy, when contacted, said that e-commerce sites would be removed from his app’s “blacklist.” But the trouble for retailers is that Crystal and Purify Blocker are just two ad-blockers. Even if retailers decide to directly reach out to them, new ones will emerge. These fixes will be ad-hoc, and they will entirely be at the mercy of these apps.

Apple is intensifying efforts to direct more ad revenue into its own coffers. The Verge’s Nilay Patel last week wrote that Apple Inc. ‘s ad-blocking move is aimed primarily at arch rival Google – the axis of existing Internet ad infrastructure. Retailers and online publishers will just be collateral damage in this greater tech war game.

Shares of Apple Inc.  are down a percent in Thursday morning trade. Wal-Mart Stores, Inc. is largely unchanged.

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