The large investments being planned by brand owners in their “owned” media channels has lifted the lid on a growling dog fight between content discovery network Outbrain and its aggressive new rival, Plista, acquired last year by WPP’s GroupM.
GroupM sees Plista as crucial part of its reinvention from a traditional media agency group focused on paid media placement to a media firm which can deal itself quickly into, among other things, the plans by brand owners to invest more heavily in their owned media assets, creating content for those assets and distribution beyond brand-owned channels to bring in larger audiences.
The global media group sees Australia as an advanced pilot market – referred to internationally inside the company as “The Australian Model” – and GroupM’s rollout of the German-based Plista in Australia will likely serve as a blueprint for.
Plista rollouts in other markets.
But the dominant Australian force in content discovery to date has been New York-based Outbrain – most of the big online publishers here have Outbrain embedded in their webpages with the near ubiquitous “Recommended” and “From Around the Web” headlines and teasers.
Other Outbrain rivals include Taboola and Gravity, the latter being sold to AOL last month for US$83 million as part of its growing adtech stack which includes Adap.tv and publishers like The Huffington Post. (Fairfax Media and HuffPost announced an Australian joint venture today).
From search to social and now the ‘personalisation era’
“The Web has gone from search to social, and the next evolution will be personal,” AOL’s CEO Tim Armstrong said on the Gravity acquisition last month. The Gravity team would be “building the personalisation era at AOL,” he said.
But Outbrain’s global and Australian executives have been concerned for some time about the future viability of content discovery platforms if insufficient rigour is applied to the sort of content – or ads – that are served to users.
In Plista’s case, Outbrain’s head for Australia and New Zealand, Ayal Steiner, said there was a “fundamental difference” between his offer and most others, Plista in particular.
Plista is an “ad network”, not content discovery
“You have to understand Plista is an ad network,” Mr Steiner said. “Outbrain is a content discovery network. There is a fundamental difference. We don’t run ads. We focus very clearly on running content that adds value. We have very strict editorial guidelines in that space on a publisher’s page. “By sticking ads into a content stream, readers will eventually pick up it’s an ad, avoid clicking and it will very quickly drift into the blind spot of readers just like any attempt to advertise on the page. This is not a sustainable business model for publishers. The focus has to be on the reader’s trust and continuing to grow this rather than get a quick lemon squeeze.
“In the 24 months we have been operating in this market our guiding principle is that we only serve content. We are trying to carve a piece of real estate on the page readers can trust and we do this by only recommending organic content. Even if the promoters content is inspirational videos, educational videos or stories the brand produces, it’s never something that sells you or is promotional.
Advertising mentality for content marketing wrong
“We are pushing back on a lot of content that we feel is not suitable for our marketplace and we do this because we’re trying to build a sustainable business model for our publishers. There’s still an advertising mentality even within the content marketing space and this is where have to set the guidelines.”
Steiner said there was rising concern from Outbrain globally that the credibility that his company had been trying to create with online users and publishers pushing entertaining or informative content would be undone quickly by competitors seeking to capitalise for a quick return on the emerging growth spot with ads masking as content.
Steiner pointed to GE Reports as a case in point. “It’s a brilliantly designed site which has genuine stories about the four pillars GE wants to be a thought leader in – the environment, industry, manufacturing and energy. Most of the articles are not about GE. That’s a brand taking a thought leadership position.”
Steiner also pointed to “independence” as being central to making these fast growing content platforms work effectively for publishers.
“First and foremost, Plista is an ad network, we’re a content network,” he said. “The second fundamental difference is that we’re independent. Plista is now owned by GroupM. It’s going to serve GroupM clients. For publishers the fact that we’re independent allows publishers to capture the full opportunity that content marketing represents.
Independent platforms versus agency groups
“As more and more brands, media agencies, PR agencies, publishers and content and creative agencies use Outbrain to promote their content, that marketplace gets bigger and bigger. It’s content promotion budgets that are coming into the marketplace and that allows publishers to benefit from the full opportunity by working with an independent platform.
“By siding with something that is affiliated with a certain agency group it creates a conflict for other agency groups obviously and a conflict for the rest of the market. That conflict means publishers will probably be limited or the revenue coming in through the Plista platform will be limited to GroupM agencies and it would be naïve to think anything else.”
Steiner said click-through rates for Outbrain stories had jumped 200 per cent in the past 12 months in Australia as users realise the content being served up is of interest. He said the revenue Australian publishers earned from Outbrain was up 450 per cent over the same period although he would not divulge detailed figures. GroupM, ironically, has until now been a customer of Outbrain in Australia. Steiner said it accounted for “8-9%” of Outbrain’s “total demand side, of our total buy side. That means for GroupM to deliver the exact same level of revenue for publishers they will need to increase the level of spend that they’re going to drive through Plista by 10 times. Can they do it? sure that can because they control where brand investment goes.”
The focus on publishers at present is because Outbrain and GroupM are in delicate contractual negotiations for rights to publisher pages.
Rival GroupM media agencies are also known to be voicing their dissatisfaction to publishers if they strike a Plista deal but GroupM’s chief investment officer Danny Bass is unmoved.
GroupM: scare tactics and nonsense
“It’s scare tactics and it’s nonsense,” he said. “Not one cent of any client dollar will fall into Plista without an opt-in agreement about where it is going. But let me tell you, the uptake and interest in Plista far outstrips anything we have ever launched in Australia because we are talking to brands who are about to invest millions in their own media properties and they have to get that content distributed. Anywhere between 20 per cent and 50 per cent of traditional marketing spend is going to a brand’s owned [media] assets over the next few years. What we might see in the future is an end to banner ads, buttons and media rectangles.”
“Our relationships have always traditionally been set with media commercial directors, sales directors and sales teams. When you start talking about putting in place the tags - Outbrain tags or whoever on a page - you are inevitably talking to an editor or the owner of the content who invariably doesn't care as much about advertising and in most cases is incredibly adverse to advertising. They’re about stories, getting traffic, keeping traffic and so every conversation we have had is not with a commercial view to start with. With all of these contracts there is a trial period and we know if it doesn't work and doesn't drive traffic or doesn't at a minimum do what Outbrain does, we are out.
“It is in our very best interest to make this work because we need a new way of working with brands but ultimately we won't decide that. The editorial teams will decide that and if it isn't working we are out.”
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