Publishers see short-term opportunity from Outbrain’s acquisition of Teads

While BDG has never worked with Outbrain — using its own proprietary technology for content recommendation on its site — “it would be silly for us not to entertain how [Outbrain] could grow our bottom line revenue,” Studholme said, which is why she’ll “never say never” to working with the Outbrain-side of the newly combined business.

“The demand that Teads brings to our open market opportunities is significant… They’re such a huge component to our programmatic business overall,” said Studholme, declining to share how much of BDG’s programmatic revenue comes from Teads. “I think that with their clientele being complementary to each other, it provides a bigger opportunity for Bustle.”

Studholme said gaining access to an entirely new pool of advertisers will help the publisher further strengthen its programmatic business. That’s because the advertisers BDG gets from Teads have always been focused purely on awareness plays.

This merger makes sense as a reflection of the contraction of the open web, according to a publishing executive, who spoke on the condition of anonymity, and whose company works with both Teads and Outbrain. In recent months, several ad tech vendors finalized mergers and acquisitions that have been in the works for a while, with Connatix and JW Player appearing to be next in line. 

“It would make sense … to [be] able to work with one company that has ad products that can help you monetize all of your real estate,” the publisher exec said. “I think it’s better to have one streamlined point of contact and simplify things to maximize the result and the impact.”

But not all industry insiders agree that the contraction of the ad tech market will be positive in the long run for publishers. “On one hand … fewer middlemen between publishers and advertisers could mean a larger share of revenue to publishers. On the other, in any situation where a few large companies control the market, both sides of the industry could be left with fewer choices — each with more power — possibly leading to a less-than-fair bargain for all players,” said an ad tech exec who spoke on the condition of anonymity.

The publishing exec echoed Studholme’s sentiment about Teads being an important partner for monetizing ad inventory. The exec, who oversees ad revenue at a global media company, said Teads helped increase the CPMs it was able to charge for international audiences that were visiting its U.S. sites — an audience that previously was notoriously undervalued in the open market.

However, when asked if they thought the merger will give publishers more opportunities to monetize their content with a new set of advertisers, or a fuller funnel of campaign objectives, the exec said they didn’t expect it to be any more beneficial than the company’s current deals with both vendors now.

Figuring out the pitch to publishers 

Neither publisher said they’ve been in contact with the companies regarding the acquisition, nor have they received guidance on what this means for their business with the combined company. But Outbrain’s and Teads’ respective CEOs believe that the combined advertiser pool and assets will be appealing to media companies.

Outbrain’s Kostman told Digiday that they have not determined the go-to-market strategy yet for appealing to publisher clients. For advertiser clients, he said they are exploring cross-selling Teads’ and Outbrain’s advertiser bases given “there are many with whom we do performance [executions] that we can up-sell on the brand side, and vice versa.” 

Jeremy Arditi, co-CEO of Teads, claimed that many programmatic offerings currently in market offer “very limited insight” through their data capture in the bidstream and that both Outbrain’s and Teads’ direct integrations with media owners can prove a point of differentiation. 

Additionally, Kostman noted how there are opportunities for product integration between the pairing. “I think that’s where growth is going to come from [in the] short term. In the longer term, I think the CTV business is one that’s material for Teads and growing very fast,” he added.

Out-stream advantage

One thing that the publishers said could work in favor of Outbrain is Teads’s command of out-stream video inventory. Following IAB Tech Lab’s guideline roll-out, many publishers had to recategorize their online video to lower-priced out-stream inventory from higher-priced in-stream inventory. And out-stream has been notoriously more difficult for publishers to sell.

The publishing exec said that internally they will shift from in-stream to out-stream inventory classification based on the marketplace’s chosen standard. Assuming that means more out-stream inventory, Teads is in a strong position. “A lot of publishers are going to have to think through any real estate that was given to in-stream. If it moves to out-stream, Teads is kind of like the de facto product for out-stream,” they said.

“This revenue stream of out-stream video being somewhat difficult to monetize … [Teads] does a really good job of delivering for us month-in and month-out,” said Studholme. “So I would say their performance has been consistent, especially as we see the market ebb and flow; they’re definitely a proven player for us.”