Interstitial ad
An interstitial ad is a full-screen ad or pop-up that covers a page's content until the visitor closes it or waits it out.
An interstitial ad is a full-screen ad that covers the page you came to see, until you close it or a timer runs out. The same word is used for any full-page pop-up: a newsletter sign-up, an app install prompt, a discount offer. A smaller box that covers only part of the page is usually called a dialog or a modal.
Marketers use them because they get noticed. The cost is annoyed visitors, and Google counts intrusive ones against a page's experience.
What Google says
Google's guidance on interstitials and dialogs says intrusive ones frustrate people and can make it hard for Google and other search engines to understand your content. Its page experience guidance asks whether your pages avoid them. Google suggests a banner that takes up a small part of the screen as the alternative.
Some overlays are fine, and expected: cookie notices, age checks and login screens for private content.
The cost on phones
On a phone, a full-screen pop-up is the whole screen. For example, if someone taps through from a search for "how long do coffee beans stay fresh" and lands on Fernhill Coffee's guide, a 10% off pop-up hides the answer they came for. Some will hit back before they find the close button. A slim banner at the bottom gets the offer seen without blocking the guide.
Interstitials and AI bots
Bots read the HTML your server sends, so a pop-up rarely hides your text from them the way it does from people. The bigger risk is when the overlay replaces the content, for example when a page shows only a sign-up form until a script loads the rest. Then the bot may get the form and nothing else. In AnswerOrbit, open the page in the Pages tab in Website to see What a bot reads next to What a person sees.