New York – June 18, 2015 – Sourcepoint launched publicly today as the first content compensation platform for premium publishers. The company was created by a team of ad industry veterans including Ben Barokas (founder and CEO of Admeld), Brian Kane (former COO of LiveRail), and Geir Magnusson (former CTO of AppNexus), joined by serial entrepreneurs Jeroen Seghers, JP Carlucci and Matt Adkisson. Along with their public launch, Sourcepoint has announced a $10m Series A round led by Spark Capital and Foundry Group, joined by Greycroft and Accel. A number of other technology entrepreneurs and executives participated in the round including Michael Barrett, Joe Zawadzki, Jonah Goodhart and Matt Keiser. The launch of Sourcepoint is the culmination of a year-long effort to understand and address a number of challenges facing the advertising ecosystem including the recent rise in ad blocking.
Premium publishers are increasingly concerned about their ability to generate revenue from their content in the face of increasing pressures – including the skyrocketing use of ad blockers and sub par monetization of mobile. Sourcepoint addresses these issues with a content compensation platform that supports a sustainable media ecosystem through a fair value exchange between consumers and publishers. While a number of companies attempt to address the ad block issue, they provide unsophisticated solutions that simply replace a publisher’s intended ads with lower-quality alternative ones. Sourcepoint takes a different, and more balanced approach that offers greater compensation choice for publishers and consumers.
“The publishers we’re working with recognize they’re facing an existential crisis,” said Barokas, Sourcepoint’s CEO. “The problem is bigger than ad blockers – even though they are an easy target. The issue goes to the root of the relationship between publishers and consumers. There is an implicit value exchange that takes place – either attention or dollars – to pay for the content people want and enjoy. Ad blockers undermine that exchange, which is forcing publishers to rethink their content compensation strategies. Giving them greater flexibility – and their customers greater choice – is the value we bring to the market.”
With ad block rates in the U.S. currently between 15-20 percent and rising – and even higher in many European countries – an immediate fix is needed. Any short-term solution, however, can’t come at the expense of long-term sustainability. Simply unblocking or replacing ads fails to recognize or respect consumer signals. Taking the consumer out of the equation simply perpetuates the situations that caused people to turn to ad blockers in the first place. Sourcepoint allows publishers to work with consumers to create content compensation relationships that work for everyone.
“Publishers should be in control of the way they connect with their consumers and are compensated for their content,” said Santo Politi, co-founder and general partner at Spark Capital. “Those relationships can’t be based on one-size-fits-all approaches. For better or worse, publishers have relied on a very narrow set of compensation models. Sourcepoint will succeed not simply because it addresses the ad block issue but because it is offering new monetization alternatives that will give consumers greater choice in paying for the content they value.”
Millennials, one of the most appealing audience segments for advertisers, are also the most likely to have ad blockers installed. According to new research from Sourcepoint, ad block usage among millennial-heavy gaming and technology sites exceeds 50 percent. Sourcepoint’s data, based on analysis of publishers currently using the company’s ad block detection and analytics platform, found ad block rates of 70 percent in some cases. Sourcepoint will release a comprehensive research report on ad block in the coming weeks.
“Publishers need to understand the scope of the problem they face,” said Seth Levine, managing director at Foundry Group, “and Sourcepoint is helping them do that. Publishers also need realistic and concrete steps for tackling this problem and Sourcepoint provides that as well. At the end of the day, providing compensation alternatives will contribute to the continued health of the digital media ecosystem and that is a goal everyone should support.”