Blood, Sweat & CPMs Podcast: Episode 2

Puple World Autism Awareness Facebook Event Cover (3)

Welcome to the Blood, Sweat and CPMs Podcast presented by Freestar.

Our hosts, Jeff Kudishevich and Andy Forwark are here to add levity and provide helpful pointers for anyone navigating the world of Ad Tech. Each episode, they will go through the top threads from the Ad Operations Subreddit and give their take on each hot topic of the week. They will also interview thought leaders across the industry to get their perspective on what matters most to them. Follow along on our Blog for show notes and associated links to each episode. Enjoy!


Episode 2

Marty Krátký-Katz (Blockthrough) on Ad Blocking | Pandemic Blues, Sales vs Ops and Rookie Trafficking Mistakes

In this episode of the Freestar Blood Sweat and CPMs podcast, Jeff and Andy go through ad operations subreddit threads about the effects of the pandemic on the digital advertising industry, how to navigate the “Sales versus Operations” dynamic, and revisit some old stories of trafficking mistakes they’ve made. They also interview Marty Krátký-Katz, Co-Founder and CEO of Blockthrough about the origins of Blockthrough and respectful ad blocking, as well as ideas for how to improve government and politics.


Listen to the episode on Spotify, now!



About Our Guest



Marty is co-founder and CEO at Blockthrough; they’re the market leader in respectful AdBlock monetization and are finalists for two AdExchanger Awards this year. Before founding Blockthrough in 2015, he was a founder at MicroMetrics, an award-winning SaaS company with a suite of products that help the world’s biggest hotel chains delight their guests. He was born on a Black Friday (adtech was HIS destiny!), and he speaks 5 languages fluently.

Find Marty on LinkedIn: https://www.linkedin.com/in/martinkratkykatz/



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[00:00:04.660] 

But what sort of if we’d given up when the times were hard, we never would have gotten there. And so I don’t know if it’s grit, perseverance, relentlessness or just stubbornness, being able to keep going when it wasn’t good. But we you know, we still believed in our in our thesis and our philosophy and what we were doing.

[00:00:26.110] 

Welcome, welcome. Welcome.

[00:00:28.270] 

Thank you for joining us. And in case you forgot what you clicked on, we do love CTR around these parts. You are listening to the Freestar presents Blood, Sweat and CPMs podcast. I am your host, Jeff Kudishevich.

[00:00:43.840] 

Hey, are you cool cats and kittens as always? I’m your co-pilot, Andy Forwark helping you navigate around the beautiful world of ADTECH. Lovely indeed. And we are so happy to have people here. Just to give everybody a quick rundown of today’s episode, we’re going to do our Redit ad ops threads of the Week segment, followed with our special guest, Marty Kratky-Katz from Block Through, who is going to speak all things ad block recovery from his lovely cabin in the woods.

[00:01:15.940] 

Hey, Jeff, before we get into that, how is your week going? Pretty good, man.

[00:01:19.480] 

Have you heard of this little documentary series called The Last Dance? A little documentary series? Are you talking about one of the most epic documentary scenes I’ve ever watched?

[00:01:30.070] 

Yeah, I think I am. You know, it’s funny because I sort of love that they did them releasing them in two episode bunches every Sunday. I kind of, I don’t know, maybe it’s maybe it’s something about my psyche. Or maybe if I was a psychologist, I would know how to explain it. I sort of like watching them in the middle of the week instead of on Sunday. I feel like there’s more I could just be doing or not doing.

[00:02:01.570] 

And that sort of gives me something to look forward to in the evening, because random Tuesday, Wednesday, whatever it is, there’s not a whole lot going on. Right. So I sort of sort of wait to to watch them then. But, man, it is it is just phenomenal. I think it also I don’t know what’s your what’s your take. Do you think this is like the first of many of these in the future where, you know, we’re going to get a Peyton Manning one or Tom Brady or I don’t know, Nolan Ryan shows you how much I know about baseball.

[00:02:39.310] 

Well, Nolan Ryan? How about a Babe Ruth?

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Yeah. I mean, it’s like I said, it’s one of the coolest documentaries I think I’ve ever watched. I think it’s. Yeah, OK.

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Peyton Manning, like, I think I got more out of this as it wasn’t just the Michael Jordan story, though, like he was obviously a huge center of it and interviews throughout the thing getting his opinion, which was huge.

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But it was also really quick on that. Don’t you love when the producers are going, OK, and this is what John Starks said, or this is what Gary Payton said and getting his or Isaiah Thomas or getting his live. Well, not live, you know what I mean? Like the initial gut reaction from just this mega, mega, mega basketball star and super competitor, sort of see him just scoff sometimes at people.

[00:03:39.980] 

I mean, what are you talking about? That was by far one of the most interesting parts of it, seeing him get that tablet and then looking at it and then us kind of viewing what he’s doing and taking it in and then seeing his reaction as he’s watching it. And as these guys are saying these words, it was really phenomenal. So if you’re a basketball fan or a sports fan in general, check it out. It’s a ten part series, but hour increments.

[00:04:08.500] 

So not too bad if you got to spread it out.

[00:04:13.300] 

All right. And now the moment of truth. Our time to break down the top Reddit add up threads of the week in case you don’t know, which I would imagine most don’t. I actually started the ad ops  sub Reddit in 2012 and it’s now somehow become one of the leading ad ops’ communities in the industry. What do you think, Andy? Yeah, it’s a great community. Happy to be a part of it. I’m excited for this segment to just run down all the different threads that we see over the weeks and give our opinions on it.

[00:04:43.660] 

All right, Andy, so our first thread up is Spare a thought for all the people in sports and travel. Hang on in there. This  appears to be a graphic from the users Google Analytics account. You can see in January, it looks like he peaked at about four million page views. Or maybe this is in visits. Yeah, this is in visits for the month. And then, unfortunately, as we all know, due to covid-19, his traffic has taken a massive dip and he’s showing his April 2020 stats at about 153K or thereabouts.

[00:05:22.330] 

Yeah.

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So, yeah, to say the least. Obviously, this is really harsh for these two verticals and certainly any other verticals out there, everybody sort of taken their fair share of hits, whether it’s a traffic drop, whether it’s CPMs and spend, or I’m sure in these cases, probably a little bit of both or a lot a bit of both. And I guess my take here is that everybody’s feeling it for whatever that’s worth.

[00:05:56.200] 

Obviously, there are some verticals that are feeling worse, might knock on wood as countries start opening back up, traffic will increase, hopefully spend increases as some advertisers are starting to feel a little bit more secure with their new messaging or changes in messaging. We’ve been looking at some of the IB surveys and looking at both the publisher side as well as the advertiser side. It does look like there’s optimism in the industry for the second half of the year.

[00:06:29.080] 

But certainly we’re not we’re not in the prediction business. So that’s sort of just all  we can see.

[00:06:36.490] 

Yeah, I think, you know, some of the takeaways for a publisher experience in this, too. So let’s just say that they mentioned sports and travel. Let’s just say it’s sports. Right. We know that temporarily sports are not around right now. And, you know, I think you have to hopefully this user is not running a business where he has to pay a lot of people and maybe he’s got enough cash saved up, you know, so that through this period of waiting, waiting, waiting for sports to return or waiting for travel to come back, you know, we can get past it.

[00:07:13.900] 

And, you know, so it’s important to kind of note that it is temporary, but also feel for those companies out there that may have to let go of people or whatever to keep the doors open.

[00:07:26.230] 

Next thread up is entitled No one really cares about voice search right now. The user then writes, It is good to know when the rubber meets the road. No one cares about the next big thing. When I took a look at this thread, I didn’t really want to talk about voice search in particular. I wanted to more focus on the general concept of no one cares about the next big thing from my perspective. While maybe the next big thing, next big industry thing might not be taking much of much of the industry’s psyche at the moment, I do think the concept of trying different initiatives, trying to innovate, trying different products, trying different revenue streams, that certainly has to be a big part of what you’re doing now when CPMs and spend might still be much lower than what you’d expect.

[00:08:31.620] 

And you sort of want to wait and see how things are picking up in the world and sort of seeing some upward mobility in light of that not happening right away.

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I think it really just is a matter of let me see what I can do. Let me try some different things.

[00:08:50.640] 

Maybe maybe the voice search isn’t the next big thing that this user cares about. Right. But you make a good point, Jeff. Like if you’re going to quote next big thing, think about this. Industry changes like every six months and even recently, like even quicker than that. I mean, I could think like the next big thing could be something, you know, questionable, like voice search, like, how are we going to do that?

[00:09:17.400] 

Or the next big thing is I just figured out, like, if I move this ad on my site over here and develop this new product that helps it stick and stays in view, then that might be a great next big thing for a publisher.

[00:09:33.240] 

Yeah. And I and I think the main thing here is to sort of separate the industry. Next big thing from the my own next big thing. Right. Because there are things that certainly can move the needle from my site that might not be ubiquitous for the industry. So my sort of two cents is I wouldn’t necessarily be focusing on what’s the next train I can get on or wave to ride, whatever you’re, you’re visual of the day is.

[00:10:02.370] 

But more about you know, I have a business to run. I need to see what are the opportunities I can put in front of myself to to really weather the storm, take things to the next level. Whether that means email marketing or trying out a new Google product or talking to my SSPs about getting better rep shares, whatever that might be your quote unquote. Next big thing might just be your business’s next big thing and not necessarily the industry’s.

[00:10:37.150] 

Exactly. Next thread we wanted to talk about is how is your ad revenue in May compared to April? Hey, guys, my revenue plunged heavily about two and a half times less than March and kind of flat for the month of May. Am I alone? How is your ad revenue so far for display and video share your downside percentage. I will just go ahead and give a spoiler alert.

[00:11:03.850] 

you’re not alone, whoever this user is.

[00:11:09.090] 

You know, we’ve certainly seen this around all verticals, all the publishers we talk to, even outside of the Freestar family, everybody’s being affected in one way or another. We look at ADEX advertiser vertical spend. We look at IAB categories for our own publishers. There’s very, very, very few slivers of hope. We did sort of see from some of the data we put together and aggregated from other sources that, you know, around the middle of April was sort of the true bottom, so to speak.

[00:11:51.430] 

And hopefully we’re starting to see some increase along the way across the industry. We certainly have seen some here at Freestar and hopefully we’ll continue to see it. This user sort of mentions that it’s sort of flat for May. I think one of the things that I’ve been hearing a lot from our programmatic demand team is flat is normal, flat is fine for the time being. I think we need to all sort of get into that mindspace of flat right now might not be the worst thing in the world.

[00:12:23.740] 

Yeah.

[00:12:24.820] 

And, you know, the publisher here doesn’t, I didn’t see which type of site this is. So, you know, if we’re talking about the site at the beginning, like if this was the same user, it’s not. But obviously with sports and travel being down there, their revenue and page views just plummeted, which would also kind of have an effect on the revenue. So even if you have less visitors to the site, your revenue at this point in time right now is going to be probably down comparatively, especially since last May.

[00:13:00.680] 

You didn’t have any of this going on. Yeah, for sure.

[00:13:04.640] 

I mean, at this point, 2020 is an anomaly. There should never be any year over year, month over month. You really just got to be kind of focusing on the now what can I do? What can I look at? What exactly what can I scrape together. The next threat is Dealing with your account sales and planning teams. I will put a bit of caution and a tag on this thread. The user uses some harsh language.

[00:13:40.160] 

I don’t want to focus on sort of his general sentiment, but I do want to kind of address, it sometime,  sometimes is the elephant in the room, so to speak. So I’ll sort of read the first couple sentences just to for what he’s talking about here. So this is from the top. This isn’t as much a question as it is straight up bitching post of how I’m on my last thread with sales teams that refuse to learn anything about what Ops does, then continually bitches about how everything is our fault.

[00:14:13.010] 

And then he sort of goes into a bit of a rant there. What I wanted to sort of talk about is how, you know, how Freestar has been addressing this issue that we we all sort of know from being in this industry for a decade or whatever it might be for you, there’s always this ops versus sales, sales versus ops thing that goes on at some companies and might be product versus engineering.

[00:14:42.400] 

It might be editorial versus product. You sort of name it. There’s always these sort of teams that can kind of get at each other’s throats, sort of some of the things that we’ve done here at Freestar to combat this and and try to get it head on so that we don’t have this sort of culture, this users referring to. You know, we do things like having our yield team do trainings with our business development team so that some kind of common industry knowledge, get some more product training as well.

[00:15:20.830] 

Get that, get the sales team to sort of speak the lingo that we speak on our side. That’s one part of it. The other part is also just having some weekly things right. Having both of the teams have meetings on the books every week, talk about any issues, flag any concerns. We have escalation processes. Right. Where you have a problem with a particular account, you can’t figure it out. Let’s escalate it, get the salesperson involved.

[00:15:50.470] 

Let’s try to fix it as a team rather than all this the salesperson or this ops person and really just try to combat it as a problem, as a team rather than. Oh, that’s their problem. Or that’s that’s his problem or something like that. You’re right. This is something that you deal with just amongst departments, in companies, and you’re going to have the ones that clash. I’ve had experience, I won’t say I’ve ever gone to the level of this upset with with a sales team.

[00:16:22.300] 

But, you know, I think in sales, you’re always trying to win the business and you kind of have to do whatever you, whatever you can. And there’s got to be some level of understanding on the up side around that. And yes, there’s rules you can put in place and there’s things but, you know, they’re always going to try to bend the rules to do whatever they can for that particular client. You know, every person is different, has a different personality, different way of interacting.

[00:16:48.910] 

And, you know, rather than getting frustrated with it. I think you make some good points, Jeff. Like, you know, you work at the company. They work at the company.

[00:16:57.130] 

If you can find a way to meet and cross educate or, you know, figure out how to handle that, I think that’s that’s the biggest takeaways is maybe, you know, take that energy of getting upset and frustrated. I get it like you trust me, there’s there’s a lot of frustrations that can come through sales, but.

[00:17:17.230] 

Yeah, and but and vice versa. Right. I think exactly. The main thing is we can anybody can frustrate anybody. Right. It’s not about them versus us. us versus them. It’s hey, we’re all here for a common goal to to get this business to the next level, whatever your business might be. And, you know, I typically try to take a step back and just remember, hey, they’re trying to move the business forward.

[00:17:47.200] 

I’m trying to move the business forward let’s figure out a way to solve this so that, you know, yeah, there’s certain things about blowing off steam and it’s never going to be like fully like Kumbaya sort of thing. But, hey, we’re still working together to get to the next level. Right. What can we do to tackle that problem? The problem of getting to the next level, not the problem of, oh, this person sent me a dumb email or whatever it is.

[00:18:12.730] 

Right. It’s well, how do I get them to see things a little bit more my way and also understand their world a little bit more too. Yeah, and you’re always going to have people that you’re going to try that with and they’re probably not going to learn, but, you know, those you can’t you can’t let this stuff get to you or you’re going to drive yourself crazy. I saw it a lot. I’ve seen it a lot in my career.

[00:18:39.690] 

And, you know, unfortunately, I’ve seen people quit over it, too. And sometimes that might just be the best solution for someone. Maybe you’re, maybe you’re not in the right spot or whatever. But, you know, that’s the extreme of it, I think. And, you know, trying to work together is always better than trying to work against each other in every scenario, I promise.

[00:19:02.640] 

All right. Our next thread is entitled An Ad Ops Rite of Passage. We typically try not to do too many visuals here because it’s obviously tough to convey that over a podcast. I think it’s a pretty easy one. It’s a little meme and the meme is a core memory. So what it says here is when you hear about someone else who mistakenly ran a sponsorship targeting the entire universe, Andy and I both have our own stories about this. I certainly do.

[00:19:39.870] 

I’ve done this many, many times. So the one that sticks out most for me, this was when I was at Break Media, I don’t know, 8 years ago, 10 years ago. And I remember at this point I was running a test with a test. Mike’s Hard Lemonade Creative. This is back during the Dart days. If you remember Dart’s UI, the include and exclude were so, so insignificantly different that if you were busy going fast, whatever it is, it’s so easy to click one or the other.

[00:20:24.420] 

So obviously, instead of including something I excluded something that I shouldn’t have, and essentially that Mike’s Hard Lemonade Test Creative ran on all of Brake’s sites and all of our network partner sites. So at that time, Break had a little bit of a network business where we wrapped some smaller sites in like the male 18 to 34 demo. So essentially that Mike’s Hard Lemonade creative for about an hour and a half, ran hundreds of millions of impressions on all of our sites and everybody was going crazy.

[00:20:59.670] 

I was super pissed because I was actually trying to find who did this. And I’m like, whoever did this, you’re going to answer to me. I’m going to rip you a new one, all of this crap. And somehow I just in the in the, in the swing of it, just not realizing that I had done it. And then we finally track it down and then lo and behold, who served this.

[00:21:27.930] 

And I look at the history and boom Jeff Kudeshevich, which is just like I but that’s one that’s one of many of those types of stories.

[00:21:38.710] 

So I definitely been therewith this user and and it totally do think it’s an ad ops rite of passage. If you haven’t if you haven’t done it may be, you probably will. Exactly. Maybe you haven’t trafficked enough, I mean I have a  similar story.

[00:21:59.010] 

It wasn’t a trafficking mistake, per say, but it was more around a rule in adex and ended up targeting just one ad unit instead of excluding that ad unit. I I had it mixed up in my mind.

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I think if I remember right, the rules are a little bit different than how the how the key value targeting and and stuff works in the trafficking side. So you had one of those moments where I thought I had everything set up right. And, you know, a few I think it was oh, gosh, I think it was a few days later, even before we caught it, which, you know, wasn’t wasn’t great.

[00:22:41.910] 

But when we did and people said what it was, I was like, well, I made this change. And I went back in there. And sure enough, upon fresh eyes, when I looked at it again, I realized, like what I had done. And so the combination of UI and I’m not going to blame anybody like Google or anything, but, you know, UI changes can UI things can affect how you perceive things.

[00:23:09.360] 

So be careful of somebody and double check your work, Yeah,  UI as it was. It was the UI for sure.

[00:23:17.550] 

Know if anything though, I think Google and. Paying us all back because they did this themselves on YellowAd Day, if you’re familiar with this in our industry, it was, I don’t know, a couple of years ago maybe that last year, two years ago.

[00:23:32.880] 

But, yeah, that that, you know, it can happen, you know, at the DSP or SSP level too, so love Yellow ad day.

[00:23:44.100] 

Luckily, they paid out on it.

[00:23:46.590] 

It was millions of dollars I think. I don’t know if we got the total, you know, end all, but there was an article and it wasn’t cheap for them.

[00:23:54.870] 

So for sure. Much, much, much cheaper for us, let’s say. Yeah, definitely.

[00:24:01.890] 

All right. Well, Andy, I think we have probably our fill for the day for Reddit. What do you think? We kind of switch gears here. Yeah, sounds good, I’m not really sure what this whole Reddit thing is anyway. So I’d like to go ahead and introduce our special guest, Marty Kratky-Katz, from Block Through. Marty is a co-founder, CEO, at Block Through. They’ve certainly been the market leader in respectful ad block monetization and our finalists for two ad exchanger their awards this year in 2020 before founding block through in 2015.

[00:24:38.910] 

Marty was a founder at Micro Metrics, an award winning SAS company with a suite of products that help the world’s biggest hotel chains delight their guests. And by just happenstance, Marty was born on Black Friday. So you could say AD Tech was sort of his destiny and his DNA and he does speak five languages fluently. We might test you on that later. Marty. Marty, thank you so much for joining us and being part of the Blood, Sweat and CPMs podcast.

[00:25:04.920] 

Great to be here. Thanks for having me. Aawesome.

[00:25:07.950] 

So let’s go ahead and jump right in. So, Marty, just sort of start us from the tippy top. How did you get into ADTECH in the first place?

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You know, like most people, I kind of fell into it. I you I, I sold my shares off to in my previous company, Micro Metrics, back in the summer of 2015, I guess it would have been and sort of spent the summer researching a bunch of different ideas I had for my next adventure, you know, sort of by accident I, I ran into a gentleman named Chris Piper who ended up being my co founder for block through at a startup festival.

[00:25:46.300] 

He was he was looking for a co-founder. A startup festival. What goes on at a startup festival? Marty lets just

[00:25:51.990] 

Drop that.

[00:25:53.490] 

Lots of drinking, lots of drinking, and the occasional conversation about business. Just sprinkled in between between shots, right?

[00:26:04.410] 

Exactly. Exactly. There’s this startup festival in Montreal called the Startup Fest, which is appropriately named, which is a lot of fun. And if you’re looking to start something, you’re looking for an engineer to work with or a business minded co-founder to be the yin to your yang. It’s a great place to go and and basically play matchmaker for your next venture. And so I I that’s that’s what brought me there. I was looking for a partner in crime for my next venture, and I wasn’t really married to any specific idea.

[00:26:37.080] 

I had a couple of ideas of my own that I thought were interesting. And I ran into, as I mentioned, this engineer named Chris, who was working on Version Zero Block through. He figured out a way to deliver ads to Adblock users that purportedly they they were OK with. And I thought the business was really interesting. I knew nothing about ads at the time. I barely knew.

[00:27:01.980] 

Marty just out of curiosity, like, did you even have an inkling about this whole ad blocking ecosystem at the time? Or was it sort of all like, wait, people block ads?

[00:27:12.840] 

I had the simplest inkling. So I was an ad block user. Having been a previous startup founder, I sort of had this unique perspective because and so did my co-founder, by the way, which is that on the one hand, as former business owners, we could naturally understand that publishers, you know, to try and do business, they’re trying to make money. And if people are blocking ads, they can’t do that. But at the same time as Adblock users, we sort of intuitively understood that we’re not you know, most of us this some exceptions, but most of us aren’t militant ad haters.

[00:27:43.890] 

We just intensely dislike knowing eruptive ads. And we’re savvy enough to to go and install an extension to block that out. And so what Chris and I realized is that there was a lot of, a lot of babies being thrown out with the bathwater and ads that people did find acceptable and OK were not being shown either. And so that’s sort of where it all started. I you know, I thought the concept was interesting because we had that unique perspective and, you know, coming out of a business where we were selling to hotel chains, I was excited to get something into something that was more where your your buyers are a lot more tech savvy.

[00:28:23.190] 

One of the things yeah, I’m that one of the things I love about dealing with publishers is that they’re the types of people who stay on the publisher side for years and years and years tend to be curious. They tend to relish complexity. They tend to like enjoy a challenge. And you could have like a very technical conversation with them. And and you can actually have fun doing that. You cannot  have those types of technical conversations with executives at big hotel chains or big retail.

[00:28:52.310] 

I, I have a feeling it’s probably a very different sort of conversation between the two crowds.

[00:28:58.260] 

They’re totally a very buttoned up, like tie wearing. And, you know, I don’t think we have any video going on here, but I’m wearing a Block Through T-shirt right now, and I like doing that.

[00:29:06.150] 

Yeah, you’re not exactly a suit guy in my mind, Marty, are, you.  No no

[00:29:15.510] 

That’s awesome to hear. What are some of the things that you attribute to your success? So I think, you know, first and foremost, I think having a roster of amazing people on our team and our advisory board has has been sort of the biggest single thing that that has helped drive our success. I think if you surround yourself with amazing people, you just increase your probability of success. There’s some great saying that I’m going to mangle.

[00:29:45.710] 

But it’s like you are the average of the five people you spend the most time with. And if  you surround yourself with people who are brighter and more knowledgeable than you, than that sort of rubs off on you. So I think that’s the. Yeah, I love that. So do I. And so I think that’s been sort of number one, I think to you know, the block through story is one of like a tale of two companies, like the first two, two and a half years where everything was miserable and nothing worked.

[00:30:13.250] 

And then the last sort of two and a half years where it’s been lights out like the total opposite things have been going up into the right.

[00:30:20.240] 

And I think, you know what sort of if we’d given up when the times were hard, we never would have gotten there. And so I don’t know if it’s grit, perseverance, relentlessness or just stubbornness, but being able to keep going when, when, when, when the ship wasn’t good.

[00:30:38.720] 

But we we still believed in our in our thesis and our philosophy and what we were doing. You know, we that carried us through the hard times of the good times. And we joke that, ah, that the cockroaches are spirit animal because they’re there. They never die. Yeah they never die. Exactly.

[00:30:57.240] 

So, Marty, when Ad blocking really hit the scene, it was a bit of an arms race. Right. How does the landscape look now between the ad blockers and ad block recovery?

[00:31:09.050] 

So it’s interesting ad blocking. Is this very it’s a hard problem to solve. Like, it’s it’s a complex problem. There’s this complex problems tend to not have simple solutions. And so there is you’re absolutely right. There is this first generation of ad blocking solutions. Blocks are included, by the way, which was predicated on this concept of circumventing ad blockers. In other words, like we were when we first started out, we were building tech that was meant to deliver ads despite the presence of an ad blocker.

[00:31:39.770] 

And I think Block Through is one of the early ones to realize this. But I think everybody who tried doing that eventually realized there’s a couple of like deep structural problems with with that kind of business. You know, it’s the same thing with, like, trying to circumvent, you know, the deprecation of third party cookies using other means, like any kind of circumvention technology. If you’re going like software versus software, like, it just becomes a really difficult battle to sustain.

[00:32:06.320] 

And so from a resource perspective, when you’re a startup, you can’t afford to have like an army of engineers, like fighting the software battle against somebody on the other side.

[00:32:14.800] 

And at that point, it’s literally an army versus another army, you know, instead of just hey,I’m  just trying to build my business. Exactly.

[00:32:23.570] 

Exactly. And and I think that combined with the fact that, you know, the things, the things that you have to do technologically to to get around an ad blocker, they sort of break the plumbing of programmatic. And so the result is that, like, you don’t get the targeting, you don’t get the attribution. You know, a lot of the like fraud prevention stuff doesn’t even work. So when you do Adblock circumvention, it sort of breaks the inventory and makes it less valuable and frankly, makes it look like IBT.

[00:32:55.010] 

And so what what we realized after about two years and a bit of trying to make this work is that, hey, this this this doesn’t this doesn’t actually solve the publisher’s problem, which is like they’re losing money and they need to they’re trying to get trying to get it back and try to recoup it. And ultimately, like, if you’re getting the ads through, but you’re not actually solving the publisher’s problem, like it’s not a viable product. Yeah.

[00:33:18.300] 

And so we sort of we went through this survival moment, 2017, we had three or four months of cash left. We still felt very strongly that our philosophy and our thesis was correct, which is serve adds to Adblock users and they’ll be fine with it. But clearly, our approach wasn’t working and that’s when we sort of stumbled on to acceptable ads. You know, what sort of happened over the last two years is more and more vendors, publishers, the entire ecosystem realized that Ad block circumvention, doesn’t really work, that messaging can work in some environments, but has a lot of limitations.

[00:33:53.790] 

And it’s extremely interruptive to the user experience, meaning messaging, like, hey, please turn off your ad blocker. Please wait. Sure.

[00:34:00.480] 

And and and so I think you’re seeing more and more companies embrace acceptable ads as likethe most seamless and respectful way to monetize these users while also generating meaningful revenue.

[00:34:14.040] 

And Marty, can you kind of speak to how paid the page for acquisition plays into that? What has or hasn’t changed at Adblock through.

[00:34:26.520] 

Yeah, for sure. So some context there. So we acquired Patra, which was really the category pioneer, if you will, and it would have been the fall of 2018.. So I mentioned before that we sort of pivoted to acceptable ads sort of beginning in late 2017. We realize there’s an opportunity early 2018, march of 2018. Actually we launched a product which was basically like header bidding plus acceptable ads and we were the first to do it.

[00:34:54.270] 

We basically like hacked together, pre-bid to to to pull this off and launched it with like four weeks of cash left in the bank. And so this was like our like Hail Mary pass or last ad like let’s see if this works. And it really worked wildly well. And and so as we were sort of taking off from the runway with escape velocity Patra, there was sort of that they’d kind of had this like early burst of popularity because they were the first in the scene and and they’d sort of been going through the inverse cycles.

[00:35:25.500] 

So they were they were sort of on the decline. They sort of bet a lot of things on Adblock circumvention. They found the same things that we did, which was problematic. And so they were they were sort of looking to to make a graceful exit from the space. We we thought it was they had a lot of assets that were really valuable to Block Through, but probably weren’t that valuable to anybody who wasn’t in a headlock recovery company. And so we found ourselves in a position where we were able to score a really great deal that was super valuable to us.

[00:35:58.070] 

I mean, it’s already paid itself off in spades.

[00:36:01.820] 

And and really, I think that’s what sort of put us on the radar of a lot of publishers, I think, and the Freestar’s  of the world thing then I think, you know, prior to that, we were this like No-Name startup that like a couple of publishers to run into.

[00:36:19.580] 

And frankly, like, we hadn’t really thrilled anyone prior to 2018 because our products didn’t work. And so that combination of like, hey, like we finally build something that works and works really well. We figured it out and like we were able to make a splash with the acquisition of Patra and pick up some, you know, a smattering of really valuable assets was was a huge win for us. And it just it sort of it was like we you as we were taking off, we like.

[00:36:47.770] 

Trying to come up with a good analogy like pouring thousands more rocket fuel in the sky or pouring it in as terrible as any you can get. Love the rocket fuel just hanging out in the sky.

[00:36:58.540] 

Marty, I was reading a Q&A with you earlier in the year with Ad Monsters, and you sort of were discussing the shift to more mobile ad blocking. Right. So I think most of us kind of understand ad blocking from a sort of desktop perspective. How is block through approaching this shift? So I think what you’re starting to see more and more is is ad blocking as a mobile phenomenon. It’s not extensions, right? In in the desktop environment, ad blocking was really about that extension that you downloaded for Chrome or for Safari or for whatever, which blocked the ads on mobile.

[00:37:39.970] 

The nature of the app environments made it very difficult to block ads, and so the only real way that was feasible to block ads across Android, across iOS is is a graceful way, I should say, is is through a mobile browser that supports ad blocking. And so what you’re starting to see, and this was highlighted in our recent Ad Blocking report, is tier two, tier three browsers are adopting ad blocking by default, and that’s their competitive edge against Chrome because Chrome is never going to support ad blocking by default.

[00:38:10.870] 

And and and chrome on mobile, they basically made it impossible or very, very difficult to block ads on chrome, on mobile. And so the operators of the world now not only support ad blocking by default, but they actually support acceptable ads by default. And so you’re going to start seeing I think you’ll start to see more and more companies that aren’t called Google who have a mobile browser, will start adopting ad blocking. And I’m sure many of them will also adopt acceptable ads by default.

[00:38:40.480] 

Marty, I know that you’re very well traveled in this industry when we can actually travel and go to many different events, webinars, whatever the case may be. So just kind of for fun. I’m wondering, do you have a favorite moment at an industry event?

[00:38:58.330] 

You know, for some reason, I never seem to remember much from industry events. Well, we did hear about your startup festival, so it’s how you usually run through those. A glimpse of clarity.

[00:39:10.240] 

Now, you know, I think I think I know the answer. It would it be in my second or third year, like into block through and into ad tech. And one of our somebody who’s now an advisor, George Mitchell, he invited me to this this Post DMXCO pub crawl in in in Germany. And basically it was like random C levels and VPs from various ad tech companies were just like popping out of the woodwork. We’re all like eating beer or, eating sausage, drinking beer.

[00:39:49.150] 

And it was it was just like one of the most one of the funnest times I’ve ever had. And it was just so cool to like being in the thick of it. But like, we’re all drinking, you know, drinking the local beers and stuffing our faces with German food was great. Did you ever have a moment like how did I get here? Kind of being only a couple of years into the industry at that point, like, did you feel like the where’s Waldo in that scene?

[00:40:16.810] 

Or did you sort of feel like, yeah, I belong? This is sort of where I expect to be?

[00:40:22.060] 

No, no. This is the first one. I was like hoping they don’t ask me. I think now I’d probably do better with technical questions. I just really hope they didn’t like try to figure out if I actually knew what I was doing, because at the time I really did.

[00:40:39.490] 

Yeah. You’re like, no, let’s just drink the beer. Let’s not talk business right now.

[00:40:44.750] 

Exactly. Cool. So, Marty, you kind of talked a little bit in the beginning about your before you were in the ad tech industry, you were working with hotels. So if you weren’t doing ad tech today, do you think you’d go back to that or what would you be doing?

[00:41:04.040] 

Marty

[00:41:04.420] 

The suit, Marty, the suit? No. So I’ve really come to enjoy our I think it’s a lot of fun. As I mentioned, I really enjoy the conversations with smart, curious people in the industry. So, like, I really love it.

[00:41:21.730] 

But I do have something that I want to get to, which is like non ad tech, which is I’m a big believer and this is very relevant with covid and all this that I think the way in which we do like government politics in most countries really, really sucks. And there’s this like tendency to get caught up in like identity politics at left and right and like, what is your philosophy? And it’s like, well, like that’s not how we do science.

[00:41:46.570] 

That’s not how we do business. Like, the way we do those things is we like formulate hypotheses based on like what we’re trying to accomplish and then we like rigorously test them. And like we like we care less about like who’s right and like having a philosophy and ideology we care about, like how do we get to the right answer, how do we do things that create prosperity, that promote freedom of speech? And I think like that requires a reimagining of party politics.

[00:42:14.290] 

So I think that’s something that I’m super passionate about. And I could totally see myself. I got a little side hustle that I’m starting up that’s related to that. But I think I think that’s that’s something that the world needs right now. And yeah.

[00:42:31.780] 

Well, Marty, if anybody is going to get it done, I have a feeling that you have enough hustle for Block Through, the side hustle and next hustle too. Thank you, appreciate that. Well, Marty I really appreciate your time. It was fantastic chatting with you. You know, we love having you on the podcast. And thanks again for for sharing your your views, your thoughts and all of that good stuff. Likewise. Guys, thanks so much for having me.

[00:43:00.120] 

Yeah, thank you.

[00:43:04.660] 

All right, well, unfortunately, we’re at the end of our show, I wanted to again thank our special guest, Marty, cracky cats from block through. Well. Andy, it’s been great. Cheers to that.

[00:43:18.370] 

A reminder for everybody that the links for the Reddit threads we discussed will be in the show notes if you want to check them out afterwards. Thank you again for everyone who made it this far, for the Freestar Blood, Sweat and CPMs podcast. If you do have a spare moment, please check us out on Google Play or iTunes or wherever you get your podcasts and leave us for review and subscribe to make sure that you get all of this high quality content directly into your ears.

[00:43:44.440] 

For feedback or suggestions for guests, you can reach us at a podcast at Freestar.com Special thanks to Matt Heinlein for our music and to Caroline Romano and Paolo Battista for helping with editing and production and making sure that people know this podcast exists until next time. Don’t forget to add your macros later, alligator.


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