Outbrain's Advantage in the Era of Attention: Predicting Ads that Capture Users' Attention
2023-08-10
The company held an earnings call meeting to provide updates on its financial operations and performance to key executives and analysts. One of the most interesting topics discussed was the shift in brand advertising on the web to the era of attention. This marks the third era of brand advertising on the web, following the reach era and the viewability era. Brand advertisers now want to ensure that their ads are not just theoretically viewable, but that a human being is actually paying attention to them.
During the meeting, Outbrain was highlighted as having a strong and differentiated position in this era of attention. Unlike other companies that make binary decisions on a placement level, Outbrain's technology deeply understands the interests of the users it serves. Through their exclusive code on page news feeds, they can predict, on a user-by-user basis, which specific ads will generate the highest levels of attention. This user-based approach to predicting attention is seen as a significant advantage in the industry.
The speaker also mentioned that the shift of brand budgets to attention is expected to be significant among all players in the space. However, the biggest winners are likely to be companies like Outbrain that can effectively predict and deliver ads that capture users' attention.
The key drivers of the business discussed during the meeting included demand trends, performance in various verticals, margin improvement, and the growth potential of the Onyx product.
In terms of plans for the product/service, the company aims to develop strategic relationships with holding companies and brands for their product/service, Onyx, in the next year. They also plan to increase budgets for Onyx in Q4 and aim to make it a few hundred million dollar business over the next few years. Additionally, the company is focusing on improving yields and margins, with an improvement of about 200 basis points compared to Q1 and 50 basis points compared to last year. While they hope to bring the margin back to prior levels, achieving historical high levels will depend on market recovery. The company observed sequential improvement in demand during Q1, with each month of the quarter showing improvement. Q2 was more mixed, with April being mixed and May being softer.
The company's outlook for the quarter/year appears to be positive. They have seen sequential improvement in demand trends, particularly in Q3 compared to Q2. Positive trends in Europe, as well as improved yields, are contributing to this positive outlook. The Co-Chief Executive Officer expressed optimism about the margin, expecting it to not further decline and hoping to bring it back to prior levels. The company also expects significant growth in the future, particularly with their Onyx product and the development of strategic relationships with holding companies and brands. However, they did not provide a specific forecast for the year 2024.
The participants of the call included key executives such as Imelda Lee, Vice President of Finance Operations, David Kostman and Yaron Galai, Co-Chief Executive Officers, and Jason Kiviat, Chief Financial Officer. Various analysts, including Shweta Khajuria, Laura Martin, Ross Sandler, Andrew Boone, and Dan Day, were also present. The presence of these key executives and analysts highlights the significance of the call in providing valuable information to stakeholders. This suggests that the call served as an opportunity for investors and financial institutions to gain insights into the company's performance and discuss its financial operations.
Overall, the earnings call meeting provided important updates on the company's financial operations and performance. The shift to the era of attention in brand advertising on the web, along with Outbrain's strong position in this space, was a particularly interesting topic of discussion. The company's plans for its product/service, including the development of strategic relationships and the focus on improving yields and margins, indicate a positive outlook for the future. Investors and financial institutions will likely be keeping a close eye on the company's performance in the coming quarters.