Keystone by Outbrain is a new recommendation platform that enables publishers to diversify and boost their digital revenue streams by improving how they sell directly to readers.
The platform tailors a reader’s online experience while also supporting the publisher’s business goals, be it driving subscriptions and newsletter sign-ups or e-commerce.
Outbrain has spent the last 15 years serving adverts in news feeds across thousands of high-profile publishers across the globe. Its Smartfeed, which recommends native ad content, sits below news articles for the likes of Sky News and the Daily Mail in the UK.
The US-based company claims to make 10 billion daily recommendations to consumers across more than 7,000 online properties, connecting advertisers to these audiences. It reports that it made $745m in direct payments for its partners in 2021 alone.
Keystone marks a new business direction for Outbrain, away from an ads-based publishing model (although it continues to offer this service) but nonetheless built on the foundations of its ad business and the machine learning behind its successful ad recommendations platform.
“For over 15 years, we’ve worked side-by-side with publishers to help them drive revenue through advertising,” said Outbrain co-founder and chief executive Yaron Galai. “This has given us insight into the opportunities and challenges they face as they continue to optimise the user journey while balancing business initiatives and revenue diversification.”
Keystone brings together the twin pillars of Outbrain’s technology – hence the name, a reference to the joining of two pillars into an arch – the advertiser side and the publisher side.
Galai told Press Gazette: “We’re looking at this intersection [for publishers], which is, one, succeed in diversifying their revenue and, second, serve the user with the good personalised experience that can only be done through technology.
“To the best of our knowledge Keystone is the only technology that looks at that intersection, optimising for their business KPIs and personalising to the user experience.”
How does it work?
Keystone is the merging of two pieces of proprietary technology developed by Outbrain.
The first is its conversion prediction engine, a deep AI that works to understand what each individual user (i.e. reader) is most likely to be interested in on the website, whether it’s video content or newsletter subscriptions.
This technology looks at clicks and articles read to profile and segment a reader, so it is based on what they have shown a measurable interest in rather than mouse or eye tracking.
The recommendation seen by the reader on the website – e.g. a prompt to sign up for a podcast – is actually the result of 50 separate algorithms competing with each other to offer the best match.
The second is Outbrain’s own advertiser technology. The company made more than $1bn in advertiser revenue last year and tens of thousands of advertisers use its technology to drive return on ad spend. It helps them do this by understanding what each advertiser is trying to achieve – their business goals – and optimising this towards a positive return on ad spend.
With Keystone, this same technology is now being used by publishers, instead of advertisers, to achieve their business goals, be it reducing subscriber churn through reader engagement or increasing e-commerce sales.
“We put the AI from the news feed together with understanding business objectives from the advertiser technology, and we put that in the hands of the publisher,” said Galai.
Keystone sits on top of a CMS and provides a dashboard interface that allows publishers to select their business goals and monitor and report on their progress in real-time.
Which publications are using it already?
Keystone launched last month but at present only a select few partners are using it “to make sure we’re scaling this in a controlled way”, according to Galai. Four publishers helped with the design of the platform and three others are currently implementing it, including a large US publisher and one of the biggest financial publishers in Europe. Galai said Outbrain is already in talks with big publishers about Keystone and is open to further interest from the UK.
What does it offer publishers?
Outbrain reports that publishers already live with Keystone have seen a more than 30% lift in user engagement with their business goals, whether that’s signing up for newsletters or registrations to their paywall. The four design partners are forecast to make $2m in revenue this year, said Galai.
“Ultimately the only justification for Keystone is if it nets the publisher much more revenue and value than what it costs. That’s our goal there,” he said.
As well as tailoring the reader experience to boost non-advertising revenue streams, Galai pointed to a more profound need for technology like Keystone within publishing.
“If publishers are going to be sustainable businesses into the future with all the challenges they have with advertising and cookies and privacy and all of that, we need to empower them with future-proof technologies,” he said.
“When they place an ad on their sites that is highly optimised, there’s no technology that helps optimise everything else. And users aren’t going to stay more engaged with publishers when the user experience doesn’t keep up with those of social feeds.
“To me, it’s bringing those core capabilities that we have, putting it in the hands of the publisher, and future-proofing their visits.”
What about the death of third-party cookies?
Although Outbrain’s recommendation algorithms do use third-party cookies, Galai said “the most meaningful ones actually use first-party data” and that data from third-party cookies is “one of the least valuable bits of data we have”.
Google, which is set to put the final nail in the cookie coffin in late 2024 when Chrome will no longer use them, has said that first-party relationships – such as those between readers and publishers – are part of the privacy-first web it is looking to create through its Sandbox initiative.
Other popular browsers, chiefly Firefox and Safari, have already phased out third-party cookies. Galai said that despite this “our revenue has been going from strength to strength”, but warned that publishers do need to find alternative sources of revenue to diversify their businesses.
He said he was “bullish” about the future of publishers with the imminent demise of third-party cookies. “The death of cookies is going to be short-term painful for many publishers because some ad revenue will decrease, but overall, it’s a great change for publishers because it’s getting back to the sovereignty over their audiences and the ability to sell to those audiences, which was totally decimated in the past two decades… So I think that’s going to be a good trend,” he said.
“Obviously advertising is it’s going to become more challenged and not as reliable a source of revenue for publishers. Our bet with Keystone is they will have to be adding user-driven business models and focus more on the user experience and all those important things to counter the pending death of the cookie. And we want our technology to be in their hands to succeed there.”
How much does it cost?
As opposed to the revenue-sharing model it uses for its native ads service, Outbrain is selling Keystone as a software-as-a-service solution with a tiered pricing model. As such it is clearly targeting larger publishing groups.
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