Eyeo is known for ad blocking, but it’s got its eye on ad filtering.
On Tuesday, eyeo, which is the parent company of AdBlock and Adblock Plus – two of the most-downloaded standalone ad blockers – acquired Blockthrough, a company for ad block revenue recovery.
“Internally, we don’t talk about ad blocking, because we’re actually not in the ad blocking industry,” said newly appointed eyeo CEO Frank Einecke. “It’s about ad filtering and giving control to the user.”
Although eyeo declined to share a deal price, Einecke told AdExchanger that all of Blockthrough’s roughly 50 employees will be joining eyeo, which has 250 people.
Einecke himself joined eyeo in May after nearly 15 years at Google, most recently as managing director of global partnerships. Till Faida, eyeo’s co-founder and the company’s former CEO, will move to the board and serve as an adviser.
The why
The rationale behind the Blockthrough deal is to embrace the nuance behind why people block ads. Most people who use an ad blocker aren’t against publishers making a living through ads on the web.
Some people use an ad blocker because they dislike and distrust advertising, or because they don’t want to be tracked. To try and convince them otherwise … Well, good luck. But there is also a large contingent of people who wouldn’t necessarily make the move to block ads if the experience of browsing the internet was less obnoxious.
According to the most recent PageFair ad block report from Blockthrough (which acquired its direct rival PageFair in 2018), 82% of ad block users say they prefer a lighter ad experience by default rather than being asked to whitelist a site or being urged by a publisher to turn off their ad blocker.
“Some people are hardcore, but then there are the people that really just want a good experience,” said Gertrud Kolb, who joined eyeo as chief product and technology officer in March after almost a decade with German publisher Axel Springer.
“It bothers these users when a site loads slowly or when there are pop-ups,” she said, “but they can accept advertising as long as it’s a decent experience for them.”
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The how
And therein lies the rub: Balancing a decent site experience is often at odds with a publisher’s monetization priorities.
Although journalists gotta eat (can verify), the typical online ad experience leaves a lot to be desired (can also verify).
But that’s Blockthrough’s whole schtick. Blockthrough helps publishers recover revenue by adhering to the Acceptable Ads Standard, which allows sites to serve ad block users with ads that have been deemed to be non-intrusive and meet minimum standards for quality.
The Acceptable Ads Standard was developed by eyeo in 2011 and implemented within Adblock Plus that same year. The Acceptable Ads Committee (AAC) was created in 2017 as a third-party review board to oversee the standard.
There is still the misconception, however, that eyeo is in charge of the AAC, which is made up of advertisers, agencies, ad tech companies, publishers and even a handful of users. But that’s not the case, Einecke said.
AdBlock and Adblock Plus, like any other ad blocker that uses the Acceptable Ads Standard, gets a cut of any revenue a publisher makes from serving ads to their ad blocking audience in the form of a fee.
Ad blockers contribute inventory to the Acceptable Ads program, including AdBlock and Adblock Plus, as do a handful of browsers, such as Opera Mini, Avast Secure Browser and UC Browser.
Still, ad blockers in general, and eyeo specifically, have ruffled a few feathers over the years. Back in 2016, former IAB CEO Randall Rothenberg accused eyeo, rather colorfully (and floridly), of being an “unethical, immoral, mendacious coven of techie wannabes.” That was right around the time the ad industry began to grapple with ad blocking as an existential threat.
But the ad block industry has matured, as evidenced by the increased focus on ad filtering as opposed to outright blocking.
“The reality is that most users on the web don’t love ads but are willing to tolerate them, and the status quo notion that the web can only be a one-size-fits-all ad experience or no ads at all is flawed and overly simplistic,” said Marty Krátký-Katz, Blockthrough’s co-founder and CEO, who was also president of the AAC until he stepped aside in July.
“The future of the internet,” Krátký-Katz said, “is one where we as an industry make it easy for users to filter ads and ‘choose their own adventure’ on the web.”
‘Wet fish in the face’
But eyeo is aware it has to rebuild or, more accurately, reframe, its reputation in the market.
Although the AAC is an independent body, some industry stakeholders are wary of what they see as entities (as in ad blockers) that erect a bridge and charge publishers a toll to monetize their own readers.
Eyeo’s desire to build trust with the sell side is another reason Blockthrough, which already has direct relationships with a large group of publishers, was appealing.
“Part of our challenge is our brand perception,” Einecke said. “One of the reasons we’re not reaching out to work with publishers directly is because we feel it might be a bit like a wet fish in the face.”
(It’s an expression. Look it up.)
Eyeo’s plan is to build on top of the inroads Blockthrough has already made with publishers.
“This is a testament to show publishers that we do want to work together,” Einecke said. “It’s not a shady relationship.”
Prioritizing publishers
Although it’s a little early to get into the specifics of how Blockthrough will be integrated into eyeo’s business, Kolb and her team will collaborate with the newly added Blockthrough team to build products for publisher monetization and yield management.
“We want to bring our experts together,” Kolb said. “We need the knowledge and the experience that Blockthrough has.”
Eyeo will also continue investing in its ad tech offerings, including its ad exchange and Trestle, a demand-side platform, with the goal of “making Acceptable Ads truly become a part of the programmatic world,” Einecke said.
But he also acknowledges that the DSP market is “already a crowded place.”
“I’m not sure if the world needs another DSP,” Einecke said.
Instead, eyeo will prioritize its work on the publisher side, including populating its own sales team in 2023.
And once Acceptable Ads inventory is more widely available in programmatic channels and there’s enough supply to meet demand, the hope is that CPMs for ad block users will rise. Right now, the CPM of an Acceptable Ads user is 30% less than the average CPM, Einecke said.
“These users are falling between the cracks right now, but we can change that by validating this traffic and making sure the impressions are there,” he said. “That is a big part of our growth strategy for the year to come.”
And eyeo will also remain acquisitive.
M&A “needs to be happening on a very regular basis, so that we are able to fast track our growth,” Einecke said.
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