Outbrain’s unicorn future – APAC MD Ayal Steiner: ‘I don’t think we are there yet’

To start, for those who have not heard of Outbrain, can you explain exactly what the company does?

“Outbrain is a discovery platform that looks for what people are interested in and brings it to them. We partner with publishers and we help them anticipate what drives their readers and serve them stories [related links]. And that leads to helping marketers drive people to their sites.

“And this has been Outbrain for the past seven years. However, over the last year, more and more marketers with more direct response KPIs have started using us to do more than just content marketing.

“It’s interesting: just like Google will always be known as the search giant, even though it does so much more, Outbrain will always be known as the content company because that’s what we started in.”

You have also recently moved into the programmatic space, partnering with AppNexus? Why now?

“Programmatic means different things to different people. Clients and agencies are telling us this is how they want to transact. There is a big push today to drive efficiency in the buy-sell ecosystem. It has happened for display, it has happened for video and now when there is a native placement on a page, there is a desire to transact it programmatically.

“However, programmatic is a problem because some companies just want to take the usual things they do in the display world, and just plug it into native programmatic. The outcome of this is essentially Display 2.0 – it’s display advertising that we all ‘love’ being hidden as a native piece of content.

“And that is not our vision for what we want to do as programmatic. We want clients to reach the right consumers, but it has to start with the story and the content. The AppNexus deal allows us to leverage their technology, and there will be other programmatic vendor partnerships to follow.”

There are a number of competitors which operate in this space, such as Taboola, so how does Outbrain claim to differentiate itself?

“Well, you will see other companies trying to come in and do it cheaper. But categorically, I think we will remain known as the one who works with the best publishers because we are very strict about what we allow and do not allow in our network. We’re known by publishers for having a clear ethos about not running fake news and viral stories. Meanwhile for marketers, they know that they’re entering a brand-safe environment and that their product is not going to end up on a dodgy website.

“There are multiple vendors who are doing what we do – natively placing marketing messages directly on publisher websites. But the questions remain about which publishers, which technology are you using and whether it is brand safe and transparent..”

So how exactly can you ensure everything is brand safe, especially given some of the recent scandals involving ad placements on YouTube?

“We look at everything that goes through our system. There is a self-serve platform, but it’s not an invitation for anyone to do what they want. There are clear guidelines on the page and the layout. The landing page cannot be overly populated with ads or contain pornographic or salacious ads.

“On the technology side, there is integration with Integral Ad Science or Moat. In the programmatic space, there are a lot of concerns about lack of transparency. With us you can bid for the space you want to be in; you cans see where the traffic is coming from and you can change it.”

But the perception among the majority of news website readers is that these links are just clickbait, isn’t it?

“We have a strict stance about not running fake news and have fired clients. We have done at least three purges of clients who were paying us a lot of money, before the term fake news was even coined, because we felt there was a lack of quality and trust.

“Content has to be interesting and relevant. We’re not here just to serve marketers. As a pay-per-click platform, if people ignore us and do not like what we do, there goes our business model.

“For a consumer, I am a little concerned. There’s fake news out there, dodgy internet scams and these have leveraged platforms similar to Outbrain and that’s given this space a bad name. At the moment, they do not know if what they’re looking at is by Outbrain or by someone else. And that creates the perception that ‘it’s not for me’.”

As you mentioned, fake news had been a problem long before the term was coined. Why do you think it has blown up in such a way over the last year? Is the Trump issue alone to blame?

“I don’t know who coined the term ‘fake news’, but the election gave it the Trump ‘seal-of-approval’. Fake news has definitely got greater implications now given everything that’s happening with the Russian election right now its use as a way to skew political opinions,

“You could argue that a fake news story about a shark jumping on a boat or the ‘You won’t believe this celebrity…’ headlines are fairly harmless, but when you start to skew democracy with fake news, that’s when it’s no longer funny.

“In the US election, with the use of fake news stories and their amplification in social media circles, it’s become more of a problem. But, I see this as an opportunity for publishers to reclaim that information around the web; make it clear it’s not valid until it comes from a reputable news source.”

Does Outbrain have a team of people fact-checking your content?

“No we do not, just as we do not fact-check the claim of an advertiser – say if someone says I am the biggest or number one. We let the rules of the market decide that. But obviously we know the difference between fake news: we know who the people are now. They sometimes come back to us, but we can check their billing address.”

Outbrain already has a presence in Asia with offices in Tokyo and Singapore. What is the growth potential of this region for a ‘content’ discovery’ model?

“We’re trying to capture the growth opportunities in a way that we do not spread ourselves too thinly. Every year we grow with new countries: we’re now in the Philippines, Hong Kong and Thailand. As the business grows and the markets mature, we will maybe look at putting people on the ground there. At the moment though, a lot is being booked through Singapore and the self-serve platform.

“China is a very interesting market, but a very complex one. We do work with Chinese clients to target consumers in other parts of the world, but inside China itself we’re not there. But there are way bigger companies than us who are trying to operate there, and we’re not there yet. We will look at it in the future, but not right now.”

The company was originally founded in Israel, which has become known as a global start-up hub. How does the Israeli scene compare with other markets and what has made it so progressive?

“Israel is known as start-up nation. When you look at the number of patents, venture capitalists and start-ups per capita, it’s through the roof – for such a small country too. There is something unique there with the innovation culture. It’s part of the dialogue to find problems and not just accept them. There’s always a what if? What if we do not have to go to the bank or order a taxi? Whatever it is, people are asking questions.

“And let’s not forget, most start-ups fail. But there is something to be said for the fear of failure and how it is holding people back. It’s true for the investment community too. But it takes a whole ecosystem of taxation, government, investors and entrepreneurs to come together.”

There is talk of Outbrain becoming a $1 billion unicorn company. Is that the pinnacle of success for you?

“Well what’s the pinnacle of success for Google and Facebook? For us though, people tend to view Outbrain as a mature company, but what they are missing is that this is absolutely just the beginning. It’s still very exciting for us and there is still so much potential for us to do interesting things.

“If you remember the early days of Facebook and search, people thought ‘what is that?’ and ‘how do I make it fit?’. A marketer seven years ago did not understand the importance of having a fanpage, but now using Facebook is an integral part of the mix.

“For us, the growth is still very much ahead of us rather than behind. The unicorn statement – I don’t think we are there yet and there is so much more that can be done. We’re still fighting every day to be relevant to users and publishers.”

If unicorn status were to come, would it likely be through a merger with another company – Taboola has been mentioned as a possible partner – or further down the line through Outbrain’s organic growth, or even through an IPO?

“We are, as always, looking for opportunities to grow and fulfil our mission. Outbrain acquired several companies in the past, such as Visual Revenue and Revee, when we identify an interesting technology that aligns to what we do.

“There are multiple rumours running around lately, none of them is relevant and our policy has always been that we don’t comment on speculation.”