Outbrain's Focus on AI and Video Advertising Drives Growth and Differentiation
2023-07-30
Executives from the company recently held an earnings call meeting to discuss their strategy for expanding partnerships with premium publishers and addressing market trends. During the meeting, they emphasized the importance of measurable outcomes for advertisers and outlined their plans for investments in key areas to benefit from the evolving advertising landscape.
A significant focus of the meeting was the company's efforts to sign up premium publishers and integrate them into their platform. This highlights their commitment to working with reputable publishers and expanding their reach in the market.
One particularly interesting aspect of the meeting was the company's emphasis on product and technology-led improvements. They discussed their plans to enhance the performance of their marketplace and grow their addressable market for advertisers and publishers, with a specific focus on enterprise brands. This indicates that the company is prioritizing innovation and staying ahead of the competition by leveraging AI technology and expanding their video business.
The executives also highlighted the success of their AI-powered tool, Outbrain title suggestions. This tool has resulted in significant improvements in click-through rates and conversion rates for their customers, demonstrating the effectiveness of using AI technology to optimize advertising campaigns and generate quality leads. This presents a potential area of growth for the company as they continue to develop and enhance their AI capabilities.
Furthermore, the company's video business, including their acquisition of vi and their out-stream video product, was mentioned as a growth driver. They have already secured partnerships with reputable media organizations, showcasing their ability to innovate and provide new video advertising solutions. This indicates that the company is actively expanding their video offerings and capitalizing on the increasing demand for video advertising.
Overall, the company's focus on product and technology-led improvements, particularly in the areas of AI and video advertising, presents exciting opportunities for growth and differentiation in the marketplace. By leveraging these technologies and continuously innovating, the company can enhance their value proposition for advertisers and publishers, ultimately driving revenue and market share.
During the meeting, the executives discussed several key drivers of the business, including premium publisher wins, net revenue retention, measurable outcomes, and premium supply. They outlined their plans to focus on the premium side of the market, target more premium enterprise brands, and strive for a better mix of net revenue retention versus acquiring new publishers. The company expects strong growth in the coming quarters due to new publishers signed up last year and aims to achieve closer to 100% net revenue retention on existing publishers. They also emphasized the importance of measurable outcomes and returns on advertising spend, investing in areas where they believe they can benefit from the trend of advertisers seeking measurable outcomes. Additionally, they highlighted their belief that premium supply attracts premium demand, hence their focus on the premium supply side of the market.
The company's outlook for the quarter includes a gross profit of $52 million to $55 million and an adjusted EBITDA of $0.5 million to $1.5 million. For the full year, they maintain their previous guidance of at least $237 million of ex-TAC gross profit and at least $28 million of adjusted EBITDA. The company plans to keep expenses flat throughout the year and expects EBITDA growth to come from ex-TAC growth. They anticipate growth in the back half of the year through various strategies such as scaling supply growth, algorithmic improvements, expansion of video and full-funnel offerings, and attracting new partners. The company's second-quarter EBITDA guidance is in line with their internal plans, and they are maintaining their guidance for the year.
The participants of the call included David Kostman, Co-Chief Executive Officer; Ygal Arounian, Citi Analyst; McKenna Elves, Director, Partner Management; Yaron Galai, Co-Founder and Co-Chief Executive Officer; Jason Kiviat, Chief Financial Officer; Shweta Khajuria, Evercore ISI Analyst; and Andrew Boone.
In conclusion, the earnings call meeting provided valuable insights into the company's strategy for expanding partnerships with premium publishers and addressing market trends. The focus on product and technology-led improvements, particularly in the areas of AI and video advertising, presents exciting opportunities for growth and differentiation. With their emphasis on measurable outcomes and their success with AI-powered tools, the company is well-positioned to drive revenue and market share in the evolving advertising landscape.