Pay by the click and only advertise on reputable sites to beat ad fraud, Outbrain founder tells marketers

Working with reputable publishers and choosing cost per click advertising are the answers to advertisers’ brand safety fears and advertising fraud concerns, Outbrain founder Yaron Galai has said.

“I feel a lot of brands are just stuck with the inertia of what they used to measure with television where you had no idea what the user interaction was and it didn’t really matter,” he told Mumbrella.

Outbrain’s business model focuses on embedding units on news sites where brands and other publishers can pay to promote their content.

“The fundamental measure is user trust, whether they came back again under their own volition. When you think about fake news, you get things like clickbait where you can fool people once, maybe twice but rarely a third. When people understand, you lose their trust which is our fundamental currency,” Galai said.

Galai sees ‘fake news’ as being an economic problem driven by advertisers’ CPM campaigns that reward clickbait and sensational stories with his company identifying the problem early.

“I think we were the first people to put our finger on the fake news phenomenon. We saw a bunch of them try to get into our network around 2011.

“We decided to cut it out from our platform. I can’t remember if we called it ‘fake news’ or ‘fake content’ but it was definitely fake. We came out at the time and said it was a thing, it was about a quarter of our revenue at the time and it should have nothing to do with our world of publishing,” he said.

Galai argues the answer to programmatic advertising is for marketers to focus on CPC over CPM payment models, claiming the former is more more transparent.

“That’s the beauty with CPC, the reason why the biggest advertising machine in the world – Google – is CPC. CPM is the right model if you want to do interruptions and you just want to get a logo in front of a lot of people. I think CPM still has a role if you need reach,” Galai said.

“The biggest solution for fraud is not to say no to programatic, but to make sure you are dealing with legitimate players and you have transparency. There is no better solution to fraud than sunlight.

“In a non-user mattering environment where the payment is on a CPM basis, has huge opportunities for fraud. It is very different in our space, the content space, because generally we’re Cost Per Click. We only make money, and our partners only make money, if a user found something interesting enough and they clicked on it.

“That’s a place where perpetrating fraud is far more difficult and much less pervasive.”

When challenged by Mumbrella that fraud still happens in the CPC, Galai said he believes again that the answer lies in partnering with premium and reputable outlets.

“The best fraud battling strategy for us is partnering with premium publishers. Our links aren’t just propagated blindly in unknown places, we partner with News Corp, MSN and places like that and those companies aren’t creating fraudbots on their own sites.

“I think that’s by far the best way to go, to partner with reputable players.

“The beauty with CPC is that there is shared responsibility between marketers and publishers whereas with CPM you don’t have it, basically all the burden falls on the marketer. If the publisher is crappy and the audience it’s showing to is not the right audience and if it’s buried in a place people won’t see it, the marketer still has to pay.

“With CPC the publisher and the marketer are responsible for providing a good experience to the user, if they don’t then the marketer doesn’t get the audience and the publisher doesn’t get paid.”


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