Spedia Launches Ad-Blocking Service

Pay-for-surf player Spedia will likely cause a stir with a new product offering — which blocks interstitial ads and pop-up ads on Web sites.

Oakland, Calif.-based Spedia believes users will want to download their Surf+ browser add-on because it provide useful features that Web surfers are looking for. One of those is blocking out certain kinds of ads — the program is designed to “kill” any pop-up ad or interstitial that appears in a spawned window.

However, the company could make concessions for its own advertisers, said national sales director Greg McAllister.

“It has the potential to block out any pop-up, but depending on the arrangement, we could work with our advertising partners … to make sure that theirs comes through,” McAllister said. “We haven’t actually crossed that bridge yet, so it’s not one we have to cater to yet.”

Aside from any special arrangements with advertisers to protect their pop-ups, the company plans to make money through deals with pay-for-placement search engines. Similarly to NBCi’s QuickClick, Surf+ can turn normal Web text into hyperlinks, which Spedia routes to search engine results.

In the future, links could foreseeably take users to an advertiser, but currently, they take users to a bid-for-placement search results page provided by partner Search Hound.

Under this arrangement, Spedia collects a licensing fee and a share of the pay-for-placement search revenue.

“This is a new distribution channel for our keyword bidders’ listings,” said SearchHound president and chief executive Dave Mullikin. “When these two million people click on the various hyper-linked keywords to get more information, our bidders gain more exposure and potentially greater sales.”

Ultimately, Spedia envisions Surf+ being redistributed by ad-supported sites that don’t have pay-for-placement search features — with both the distributor and Spedia getting cut of the search engine’s take.

“Those are the types that would be interested — search results are basically the most stable form of online marketing now,” McAllister said.

Additionally, Surf+ offers warning and management tools for cookies, and translation of Spanish, French, and German text on the Web. And to boost adoption, Spedia is also throwing in a $10 payment for consumers who use the service for more than a year, as well as a referral system that pays for encouraging others to use Surf+. And it began the program by rolling it out to 60,000 of its 2.25 million members.

In the future, McAllister said Surf+ will have a “Web nanny” functionality, as well as bookmarks and “a couple of other things.”

Ad-sponsored surfing companies have long been working to squeeze every penny out of their business models, which essentially pay users to expose them to ads. But as CPMs continue to drop, the need to further monetize their user bases grows increasingly urgent.

Several players — like mValue and AllAdvantage — shut down their services when the payouts proved too prohibitive. Before its closing, AllAdvantage also dabbled in sweepstakes, software distribution and software ad sales to keep its model afloat.

Spedia, which already offers ad-sponsored games, opt-in e-mail rewards, and e-commerce incentives — and says its been profitable from the onset — not only continues this trend with Surf+, but said it’s seeing favorable reactions among its users — who also are clicking through to advertisers on the search engine results.

But clearly, the ad-blocking feature seems to fly in the face of industry convention. The most obvious problem is that “ad blockers” are roundly condemned by advertisers, ad servers, and online media firms — since it’s typically ad revenue that pays the bulk of the publisher’s operating costs.

And there’s largely been a tacit understanding between makers of advertising software that they wouldn’t tread on other advertisers’ ad space. For instance,

software by AdWise could conceivably let ISPs deliver their own banner ads on top of publishers’ Web inventory — but the feature is designed so that ISPs’ ads only appear over browser toolbars.

The New York-based Internet Advertising Bureau on Monday approved its first pop-up ad specification. And the interstitial area is already dominated by the ad networks and rich media players like Unicast and Net-Mercial — who surely won’t look too fondly on Surf+.

Representatives from the IAB, Alley-based Unicast and Springville, Utah-based Net-Mercial did not return calls by press time.

But McAllister said Spedia hasn’t seen any real pushback from firms that design or implement pop-up or interstitial ads.

“I think we’re talking to a couple of them out here on the West Coast,” he said. “And I’m not sure if that topic has come up. But I imagine they could see it as a value — a proprietary version of it that doesn’t affect their pop-ups.”

“It’s somewhat early to tell repercussions from it. If its something they don’t want to do, we’re flexible.”

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