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Ad Blocking Q&A with Gabe Coelho-Kostolny from Instart Logic

Company information:


Instart Logic is a late-stage private company founded in 2010.  We are headquartered in Palo Alto, California with major offices in New York, London, Tokyo and Sydney. We employ more than 200 people, and have raised more $140 million in funding. We have hundreds of large global brands as our clients, including more than 25 of the Comscore 100, and we are already restoring more than 5 billion ad impressions per month and growing.


What is your approach to the challenge of ad blocking? Why?


Our approach is simple.  We restore control and revenue back to the publisher.  With Instart Logic, consumers view a publisher’s website exactly as the publisher intended, including advertising, regardless of whether an ad blocker is present. Revenue is restored, and the publisher’s advertising inventory, tags and technology work as if no ad blocker is present - no changes are required to a publisher’s applications or technology. We just quietly and transparently turn advertising revenue back on for our clients.


Our platform is a cloud-based service, so there is no hardware or software for the publisher to install or maintain.  We also restore marketing functionality, such as analytics, personalization, social media, third-party cloud services and consumer data feeds, which otherwise are also disrupted by ad blockers.


We have taken this approach because our customers asked us to!  The idea for Instart’s advertising and marketing recovery products came from several large publishers who were using our broader platform for consumer experience and performance, and who suspected we already had all of the pieces in place to also address the ad blocking problem.


To date, publishers have had limited options to deal with the erosion of their revenue streams caused by ad blocking. Attempts to ask readers nicely or firmly to disable their ad blockers or to backfill revenue via alternative means (such as via subscriptions or micropayments) have either failed to work or provoked strong negative consumer reactions. Most publishers have a substantial distaste for paying ransom to the ad blocking vendors to be whitelisted, which has in the past been their only other option.


We developed our transparent advertising and marketing recovery capabilities as part of our broader digital experience platform, which also allows publishers to improve the consumer experience, performance and security of their cloud, web and mobile applications. Premium publishers using our platform have found that by delivering non-invasive advertising experiences to their readers, even to those who have installed ad blockers, they can recover revenue while maintaining positive experience and engagement.


Should more publishers take action to combat ad blocking? Why?


Absolutely. The journalism industry is under threat. Premium content on the Internet cannot exist without mechanisms to pay for its creation.


Publishers should take three steps to combat ad blocking.


  1. First, they should ensure they are delivering high quality, contextually relevant advertising experiences. This ensures that readers visiting their sites have a good experience. We work with publishers to automatically deploy appropriate and effective advertising experiences for all audiences, which ensures that all readers will have a great experience.
  2. Second, they should deploy an application like Instart Logic to recover revenue that would otherwise be lost. The key to Instart Logic’s approach is that it is transparent, high-revenue, low cost, works with all types of ads and analytics, does not require changes to their systems and has been proven to not negatively impact consumer engagement or experience.
  3. Third, they should use their megaphones to talk about the impact of ad blocking on the global publishing industry. Consumers do not install ad blockers to steal content from publishers and destroy journalism - they are protecting themselves from a small number of bad actors on the Internet. Publishers should undertake a campaign similar to anti-piracy initiatives to educate consumers that by installing ad blockers, they are in fact threatening the existence of premium content on the Internet.

What’s your elevator pitch to a publisher?


After adopting Instart Logic, organizations with digital advertising-based revenue models, including publishers, media companies, gaming companies and classified advertising firms will immediately gain 3 percent to 15 percent higher revenue.


More than 25 of the Comscore 100 have already deployed Instart Logic for advertising and marketing recovery and we are currently restoring more than 5 billion impressions per month in every major country around the world.


Instart Logic is a cloud-based service, so there is no up-front cost, no software to install, deploy or maintain, no changes to your advertising infrastructure, and we restore all types of ads, including direct, programmatic, static, video, sponsored content and more - with the highest recovery rates, fill rates, and CPMs. Instart Logic also restores marketing functionality, and it takes just days to deploy.


Pricing is based on either a monthly subscription fee, or a portion of the digital advertising revenue we recover for the publisher.


What can you tell us about the methods you have used and the results you have achieved?


While deploying the Instart Logic platform, we work with publishers to ensure they are delivering  a high quality, contextual and streamlined advertising experience for ad blocking readers, ensuring that those readers that have installed ad blockers will enjoy a premium experience. Our platform then quietly and transparently turns advertisements and advertising revenue back on. Revenue is restored, and the publisher’s advertising inventory, tags and technology work as if no ad blocker is present - no changes are required to a publisher’s applications or technology.


The result is that consumers receive the experience that the publisher intended, and organizations with digital advertising-based revenue models, including publishers, media companies, gaming companies and classified advertising firms typically gain 3 percent to 15 percent higher revenue.


We have done extensive quantitative multivariate testing with several of the largest publishers in the world on the impact of the Instart Logic platform on consumer experience and engagement. Multiple quantitative studies with cohorts of a minimum of two million consumers show no statistically significant variance between segments of consumers who do not have an ad blocker installed, and segments of consumers with an ad blocker installed and with Instart Logic’s ad-recovery capabilities enabled.


In a substantial portion of tests, consumers with ad blockers installed and Instart Logic enabled actually exhibited higher engagement and click through rates than their baseline counterparts. We believe this is because this group of consumers is not used to seeing ads, so they react well to the high quality ads being delivered by the publishers using our platform.


What are the key industry developments that are driving the ad blocking challenge now and future?  How should publishers respond?


Ad blockers don’t discriminate when it comes to the types of advertisements, sponsored content, analytics tools, or other personalization platforms and marketing technologies they interfere with, so assessing the true revenue impact is a challenge. And use continues to rise dramatically, with typical rates today at 15-30% of readers, rising in some cases as high as 70%.


More concerningly, adoption continues to grow every month as more mainstream consumers become aware of ad blockers. This is exacerbated by the growth in ad blocking functionality on mobile devices, at the same time as mobile web usage continues to expand as an overall portion of the web client landscape, particularly in the valuable iOS segment, where Apple has added blocking capabilities to the core operating system.


Google is similarly adding ad blocking capabilities to Chrome. And both Google and Microsoft have announced support for the Coalition for Better Ads, which is coalescing around a set of principles that Instart Logic also firmly agrees with. But it remains hard to see how the Coalition for Better Ads will put a serious dent in the rise of ad blocking.


We think it is just a matter of time before cost conscious network carriers begin to deploy ad blocking at the network level, as well as built into mobile devices, to save on bandwidth usage. This dynamic is already playing out in cost conscious countries like India and China; it is just a matter of time before cost conscious western players develop similar offerings.


Lastly, an under-reported piece in all of this is the collateral damage caused by the ad blockers to marketing functionality, including analytics, personalization, and data collection. We think this is close to a tipping point - organizations in many industries - not just publishing - are investing massively in trying to understand what consumers want and to provide amazing omnichannel experiences. Ad blockers defeat these initiatives and ensure that a large and growing percentage of consumers on the Internet are invisible and thus poorly served.


To prevent the steady degradation (and eventual destruction) of advertising-supported businesses, and potentially the journalism profession as a whole, publishers must respond with compelling content to encourage readers to continue to visit, more relevant advertising to help drive revenue, consumer education about the accidental side effects of ad-blockers on the publishing industry, and with technical solutions such as those provided by Instart Logic, to restore revenue.

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