If you are a blog reader or publisher, I’m sure you’ve seen and interacted with Outbrain’s products. Founded in 2005 by Ori Lahav and Yaron Galai, Outbrain began by offering 5 start voting widgets to blogs. Next, Outbrain started offering related stories based on the contextual topic of the post. Today, Outbrain officially announced its business model with the launch of Outloud, a paid product for content recirculation and link recommendations within the growing Outbrain publisher network. On launch, Outloud is already powering recommended links on thousands of blogs and newspapers including USA Today, Slate, Fox, Tribune, Golf.com and SportingNews and your truly, VC Cafe.
CEO Yaron Galai kindly introduced the product for the readers of VC Cafe:
The idea is simple – we let companies that want to amplify stories of their choice to submit them to Outloud for $10-a-month. We then show the link to those sponsored stories on the most relevant pages in our network. This is a great solution for amplifying positive press coverage, a company’s blog posts, product reviews, etc.
In essence, OutLoud provides a cost-effective way to target sponsored articles to organic content on leading publisher sites and thousands of blogs. In comparison with ‘normal’ PPC advertising, Outloud catches the users in a ‘reading mode’ rather than a ‘researching’ or ‘shopping’ mode, which is often the case with SEM promotion.
Sure, it sounds great. But we wouldn’t let Outbrain off the hook without asking some tough questions, right? so we did.
VC Cafe: How are the publishers reacting to having to link directly to their competition and driving away traffic?
Yaron Galai: The bigger publishers get paid on a per-click basis, so they are usually fine with having those links show up even if the click goes out. Most publishers today realize that unlike AOL 10 years ago, there is a decent chance that the reader will not be spending their whole day on that one site. In that case, providing the reader with a good experience on the way out can actually benefit the publisher in the long run. We’ve heard some of the biggest publishers in the US talking about their ‘exit strategies’ (different from the meaning in the startup world… ;-), actively looking to making that readers exit useful. That said, the publishers get a couple of days to approve/reject any sponsored link, so if it’s a link to a direct competitor, they’ll usually zap it.
VC Cafe: What kind of reporting do you provide the publisher on impressions, etc?
Yaron Galai:Publisher gets basic reporting on impressions, clicks and revenues. BTW – Only the publishers that we do a specific agreement with get their rev-share. The self-serve bloggers, for now at least, donate their rev-share to a charity of their choice.
VC Cafe: Is there any algorithm behind the ranking of the stories or is it purely random/queue based?
Yaron Galai: The stories are all matched based on the exact same algorithms we’ve developed in the past 2 years for the ‘organic’ recommendations. So it’s all based purely on contextual matching with personalization. There is no random queue there… ;-)
VC Cafe: Do you have a ‘super premium’ version for those who are willing to pay more than $10/month?
Yaron Galai: There is no ‘super premium’ version yet… In the future we may allow clients to pay a little extra for some add-ons, like the ability to add tracking codes, or to tweak the story’s title, etc, etc. The best way to pay a little extra and get more traffic on our network is by submitting more great stories into it. That was the whole idea of Outloud – Price it so that people will submit more stories, so that our relevancy of matching and quality of recommendations constantly improves.
VC Cafe’s Take:
We liked the “all you can eat” model for $10. Outbrain also offers a second flavor targeting content publishers who have 50 or more stories. Those can submit as many stories as they like to the Outloud index, and only pay for traffic they get at an attractive CPC rate (not yet released).
If start ups had Karma, Outbrain would be way-way on the positive side. The level of attention I get from the team, combined with the quality of the products is remarkable.
In addition to the standard features, Outloud provides access to real-time reporting and an embedded way for people to share articles over Facebook or Twitter after they read them. Want to try the service out? Leave a comment.