(As posted on AdExchanger)
Turn on ad blocking and in most cases you’ll have a better user experience, a fact readily acknowledged by Sourcepoint COO and co-founder Brian Kane. Sourcepoint focuses on circumventing ad-blocking software.
But rather than the problem itself, Kane views ad blocking as the surface manifestation of a deeper issue: “The value exchange between publishers and consumers is broken,” he said.
As publishers struggle to monetize their increasingly fragmented audiences, they reach for the handiest object – more banner ads. When that happens, users reach for their handiest object – ad blockers.
According to June data released by the Reuters Institute for the Study of Journalism, 47% of US online news consumers screen ads with ad blockers, while 30% said they just outright ignore any advertising they come across. Twenty-nine percent said they actively avoid sites with intrusive advertising.
It’s hard to blame the users. They visit websites for content, not to engage in a battle of wits with an elusive X-out button. But for the content to exist in the first place, publishers need a way to make money.
Kane is very familiar with the monetization challenges facing publishers. After more than nine years at DoubleClick, he stayed on as director of publisher services in the wake of the Google acquisition in 2008, followed by chief operating roles at AdMeld (purchasedby Google in 2011) and LiveRail (snapped up by Facebook in 2014).
Sourcepoint, which just raised $10 million in Series A funds in June, is a continuation of that narrative, said Kane, who recently joined the board at video SSP Altitude Digital after serving as an adviser for the last 10 months. Kane has also served as an advisor to MoPub (acquired by Twitter in 2013) and Shiny Ads (acquired by Rubicon in 2014).
Way back in his pre-Google DoubleClick days, Kane saw his “higher calling” as “keeping the Internet free.”
“Ads are what allow publishers to deliver great content to people so they don’t need to take out their credit cards – users viewing ads in return for content,” Kane said. “But we’ve gone a bit awry over the years.”
For the moment, the company is going to attack the more immediate problem of ad blocking by helping publishers appeal to users that have blockers installed with messaging in the publisher’s own voice around how ad blocking is detrimental to the creation of quality content over time. Visitors can then choose to view relevant ads, participate in surveys or other related actions.
Still in beta with several dozen publishers, Sourcepoint integrates into a publisher’s existing content management stack through tags or an API.
But Sourcepoint’s longer term answer is to create a sort of “Spotify of content” where users pay subscription fees for access to packages of premium online content. To critics who say users would never go for a model like that, Kane points to Netflix, to Hulu, to Pandora, to Spotify itself.
“I spend between $40 and $50 every month on Pandora, on Sirius for the car and on multiple Spotify accounts for me and my wife,” Kane said. “There’s an existing framework for consumers accepting the notion of paid subscription.”
Tech site Pando took the plunge in late June, gating its content for a $10 monthly membership fee that includes special features like first dibs on newly published articles and access to Pando’s full video archive. Members can also “unlock” certain links for 48-hour blocks of time by sharing them on social media.
As Pando Editor-in-Chief Sarah Lacy and editorial director Paul Carr noted in a blog post, “There’s an old mantra, often applied to social networks: If you’re not the customer, you’re the product. If was from that starting point – that we should work, first and foremost, for readers not advertisers – that we began considering how Pando should evolve.”
Aggressive advertising is bad UX. Bad UX leads to ad blocking. Publishers can’t afford to produce solid content. Everyone suffers.
“We want to try and restore some evenness and fairness to the way consumers can compensate media owners or content creators for their content,” Kane said. “I view the ad blocking piece as more of a symptom of the problem than the actual problem itself – but it’s certainly created quite a challenge for publishers.”
There’s no denying that content, especially mobile content, looks better when it’s not encased in ads.
Independent app developer Dean Murphy proved as much by creating a concept app for iMore.com, a website dedicated to Apple-related news, using Apple’s new Content Blocker, aka ad blocker, functionality coming soon to iOS 9.
Not only did the content itself look a heck of a lot cleaner when the ad blocker was turned on (see below, right), Murphy found that ad blocking greatly reduced the latency. It took about 11 seconds for content to load when ad blocking was off – and just two seconds when ad blocking was on.
“On mobile you have to think about bandwidth and battery life and paying carriers for data – all dynamics that don’t even exist on desktop,” Kane said. “All of those things are going to have a huge impact on the future of mobile advertising, as much as, if not more than, intrusive creative.”