Opportunistic Eyeo opens ad exchange

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Eyeo, the parent company of Adblock Plus, is launching a programmatic exchange to serve “acceptable” ads to users with ad blockers turn on,

The Wall Street Journal reports. Ad tech firm ComboTag will help create the automated marketplace, and Google and AppNexus will help market the new platform by selling inventory in their own exchanges. It's a crafty move from Eyeo. The company tapped into internet users' disaffection with online ads, was instrumental in advancing the ad blocking problem that torments publishers, and is now about to offer its own solution to a problem it helped create.

Publishers and digital advertisers are unlikely to be enthusiastic about this new exchange. Whether publishers withhold inventory from Eyeo will be important to note. Giving in would be a concession to the legitimacy of Eyeo's business model, but margins in digital media are slim, and adblocking, especially on mobile, increasingly widespread. 

The new Acceptable Ads Platform will work in the following way:

• The initiative shows ads to browsers with Adblock Plus enabled, on the condition that ads abide to certain user experience criteria based on ad placement, distinguishability and size. Large publishers producing more than 10 million ad impressions within the Acceptable Ads program pay a whitelisting fee to Eyeo, amounting to 30% of the additional ad revenue generated.
• The Acceptable Ads exchange will come with limitations adhering to Eyeo’s philosophy. To preserve user privacy and security, advertisers won’t have access to the same level of behavioral analytics customarily available on other ad platforms. Instead, advertisers will be able to target ads according to the following data: device, browser and operating system, and geography.

The ad exchange is an important step in expanding Eyeo’s ambitions:

• It further entrenches Eyeo’s eminence in the digital ad ecosystem. The Journal implied that Eyeo's exchange was backed by two of the biggest players in the space – Google and ad leviathan WPP, which is has a stake in both AppNexus and ComboTag. But Google and AppNexus since distanced themselves from the Acceptable Ads Platform. AppNexus stated outright that it would reject Eyeo's inventory. Google seemed more surprised than disapproving of the Acceptable Ads Platform. The search giant seems likely to serve Acceptable Ads inventory through its AdX exchange. Adblock Plus has over 100 million active users worldwide, and over a quarter of US internet users have ad blockers installed on their desktop computer, according to the Interactive Advertising Bureau (IAB).
• If successful, it will establish a new, meaningful revenue stream. The company will receive commissions on every ad served through its exchange, and can at the same time leverage this exchange to scale up its Acceptable Ads program. Eyeo currently counts around 700 companies –comprised of advertisers, publishers and ad networks – within this program, and takes fees from about a tenth of these companies for the privilege of letting their ads filter through its ad blocker. Eyeo’s paying customers include Google, Microsoft, and Taboola.
• It gives Eyeo the chance to shift the narrative around its business – from foe to advertisers and friend to consumers, to friend of both advertisers and consumers alike. The company is touting this initiative as a way for publishers to recoup the money lost to ad blocking, by monetizing ad blockers with more acceptable ads. A dozen publisher sites have participated in the beta test for the new Acceptable Ads Platform.

Eyeo is widely rued by internet companies that depend on digital advertising. The company was sued by Axel Springer (Business Insider's parent company) in a Cologne court for charging the publisher to appear on its “Acceptable Ads” whitelist, on the grounds that it broke German fair competition laws. At last year’s TechCrunch Media Conference in New York, IAB's president made no qualms of his animosity towards AdBlock Plus when he publicly declined to shake the outstretched hand of the Eyeo CEO.

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