The story of Outbrain and Twitter’s business model

Since nothing interesting is happening over at Twitter this week, I thought I’d share the story of how Outbrain pioneered Twitter’s business model, even before Twitter made its first $.

Disclaimer: This story is a decade+ old, based on the best of my memory. Dates and details might be a little off. Also – not claiming any credit! Just sharing a fun little story we’ve never told. 

Twitter and Outbrain were both founded around 2006/7. Given my previous experience inventing the space of Contextual Advertising (at my previous company, Quigo) we were focused from day 1 on our business model: advertisers paying to be included in a recommendation feed. By ~2009 we had established Outbrain’s 2-sided marketplace, with advertisers paying us.

Our ad format (“native”) was broken into components: a title, short text, image & URL. Outbrain’s ad components were not far from those of a tweet, and could easily be formed into one. At the same time Twitter was a) exploding (following SXSW etc), and b) seemed completely clueless about a business model. The match seemed perfect to us. 

Mark Zuckerberg summarized that period perfectly (from Nick Bilton’s great book, Hatching Twitter): “Twitter is such a mess, it’s as if they drove a clown car into a gold mine and fell in.”

(interesting side note re the verified model Elon just announced: Outbrain’s model at the time was a $10/month subscription for those blogs and newspapers that wanted their content promoted in our recommendations. We later added CPC, and ultimately killed the subscription)

In 2009/10 we met ~3-4 times with Twitter management, proposing that we serve an Outbrain “paid tweet” every few organic tweets that they serve, and share the revenue. They seemed intrigued, but nothing came of it. 

But since it made too much sense that Twitter should ultimately monetize with sponsored tweets, yet things seemed stuck, we decided to try to prove the Twitter business model unilaterally, without Twitter’s help. How do you do that? There were 2 ways to get sponsored tweets into the Twitter feed:
1) by partnering with Twitter itself. That seemed like a dead-end.
2) by partnering with Twitter users with a following.

One of the Outbrain executives at the time – Josh Guttman – had an idea about the latter, and asked to head to Los Angeles for a couple of weeks to try to make it happen. Josh didn’t want to share the specifics with me, but succeeded beyond my imagination: 

Shortly after, Hugh Jackman and Charlize Theron had agreed to partner with us on the experiment. We had to build for them a custom search interface into the Outbrain ad database. Back then, nearly 100% of the Outbrain ad database was actually news stories from publishers and bloggers. So they’d find stories about topics they cared about and wanted to promote. For example, Hugh Jackman was into stories about coffee, and especially sustainable coffee farming. 

The plan worked! Outbrain had a monetization engine up and running on Twitter before Twitter figured out how to monetize it themselves. 💪

…but it worked too well in some ways, and poorly in others. On the worked well side: Engagement with the OB ads was insanely high. I don’t remember specifics, but think CTR’s for a story promoted by a celebrity was double digit %’s.
On the worked poorly side: Since we didn’t control the platform (and were doing this without Twitter’s help), once the promoted tweets were out – they were permanently showing to 100% of the followers of that celebrity.

That meant that any targeting the advertiser was hoping for couldn’t happen. Worse: When an advertiser’s budget was consumed, we couldn’t pull off the ad, and clicks would continue coming. For example, when Hugh Jackman would tweet a story about coffee, a huge surge of clicks would come, mainly from Australia, quickly eating up the budget of an advertiser that was looking for US traffic.

We went back to Twitter with the great results of our experiment, to see if we could now formalize it into a formal partnership that would make them $$’s. Nothing came of that either. We pulled the plug on the experiment. 

Shortly after, Twitter announced that they’d start monetizing with sponsored tweets. 

(Not taking *any* credit on that, btw! The idea was obvious and it was really just a matter and execution for them to get there.)

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Public presentation tips

Last week at Outbrain‘s GCS (Global Company Summit) we had four of our emerging company leaders join me in speaking at our main keynote.

Speaking on stage in front of ~800 people is a daunting task for anyone, regardless of how much speaking experience you might have. Sagiv, Lior, Osnat and Yaniv all did an inspiring job as speakers.

Photo credits: Noam Galai

Speaking at the level they did took many weeks of preparation. To kick off the prep, I summed up in an email my entire knowledge about presenting in front of a large crowd. Some Outbrainers thought these tips could be useful for more people as a blog post. So here goes! –

First and foremost: Whether you’re speaking to a class of 2nd graders, or presenting to an audience of investors – You’re telling a story, not reading deck slides.

Pre-prezo:

  • Write down the full text of your talk, word-for-word, as you intend to speak it. Spoken English is different from email/word document English. You want to capture on paper *exactly* what you intend to say. As you rehearse saying your text out loud, go back to the doc and keep tweaking the things where your natural speaking is different from how you wrote it down.

  • For a good presentation, you should speak your text out loud at least 20 times (and I’m not exaggerating here…). Reading quietly in your head is nice, but doesn’t count for the 20. Those have to be out loud. Do at least 5 of them with a mirror, and do it at least 2-3 times with someone(s) else in the room – spouse, friends, work colleagues, your children, etc. All these numbers are the minimums… the more the merrier!

  • Another great tip from a friend, Rinat Sherzer (founder of Of Course Global and a fantastic professional speaker): Record yourself in one of those 20 takes, and then listen to your recording a bunch more times in the days leading to your speaking event. In the gym, while washing dishes, on the plane, etc.

  • The lines you want to know best are where you want to transition from slide to slide.

  • Your deck is *not* for the audience to read. You’re not delivering a PowerPoint. You’re delivering a *STORY*. Like any good kid’s story, sometimes there are cool pictures that help tell the story. That’s what the deck is for – supporting visuals for your STORY.
    • (That is why I always recommend to prepare presentations by first writing the full story you want to tell, and only at the end figure out what visuals might assist you in delivering that story…)

  • Therefore, never dump all the information you have on a slide immediately. The slides should be animated to correlate to the story you’re telling. For example – if you have a bunch of bullet points (which is almost always a bad idea…) – make sure that each bullet point shows up only when you’re talking about it.

  • 7 words per slide is the ideal max. Every word added beyond 7 is a little stab at the quality of your visual.

  • Your audience is likely a) sitting far from the screen, and b) isn’t as young and sharp-eyed (and handsome) as you are. Make the fonts as big as your space will allow, and then make them a few points bigger.

  • While it is best to rehearse reading the text so many times that you know it completely by heart, when the lights are in your face and 800 people are staring at you, the text will likely evaporate from your mind. It is 1000% fine to take the papers of the print-out with you on stage, and if needed – it’s fine to read as much as needed from the pages.
    • If you do this, print it in LARGE fonts (14 or even 16+). The sizes we use on screen (usually 11) are too small for stage reading.

  • What works well for me (but this is personal) – after my full text is complete, I create a stage version of it. That includes just 1-2 highlight lines from each paragraph (in *very* large fonts), all the numbers or specific details I have to say correctly (like – names of clients that were approved for mentioning), and a cue for when I intended to click to the next slides. Again – go large fonts, even if that means you need a pile of papers for it.

  • If you want to learn from the master of public speaking, here is how Bibi Netanyahu does it:
  • It’s OK to put your texts in the comments of the PPT. Two points about that:
    1. Work on the Word/Doc document until the very end, and only when the whole text is locked, copy the relevant texts to each slide in PPT. Otherwise it is hell to edit and tweak the story.
    2. From my experience, only maybe 1/2 of the time the stages are setup to show the PPT notes separately. In the other 1/2 you’ll only be seeing the slides themselves. So either DON’T rely on PPT notes as your only means for remembering, or double-check with with the organizers to be 100% sure that they are setup to show the PPT notes as well (also, if you do, you’ll need to make sure that they show the notes in a legible size… anyhow – paper is best)

For prezo-day:

  • If you did all of the above (especially the 20+ rehearsals) – the night before your speaking is much more valuable for proper sleep than for more rehearsals.

  • Make sure you have time before getting on stage to get liquids in, and out, of your body. Don’t exaggerate on the ‘in’ direction… 😉

  • You’ll probably be miked up ~30 minutes before you go on stage. Try to remember that when you’re miked up, there’s a good chance you’re being heard somewhere. The audio usually won’t burst to the whole audience (though it may…), but the people in the control room are definitely listening. Also, especially if you didn’t take my previous tip, this is a good reminder:
  • On stage – remember – 99.9% of humanity is terrified from speaking on stage. You can’t make the adrenaline and heart beats go away. Don’t fight them!… If your heart is pounding, it means just one thing – that you are a perfectly normal human being, so try to enjoy that fact. I promise that adrenaline and heart beats will naturally calm down after a minute or two.

  • Don’t laugh at this one… one of the biggest mistakes done by speakers is going too fast, and forgetting to breath (that adrenaline again…). Slow down and breath. Stop after every sentence and breath. If it feels awkward for you, trust me – you’re the *only* person that’s even noticing that and thinking it’s awkward. For everyone else in the audience it will feel like the natural pace of talking and breathing!

  • Breath, breath, breath.

  • Make sure you have a water on stage. In most events, the organizers will leave a bottle on the podium (but make sure).

  • If you lost your breath or need a break – stop for a drink and don’t rush it. Again – it will feel awkward for you, but only for you. It’s 1000% natural to stop and drink while speaking.

  • Try not to worry about the size of the audience. It’s very different to speak in front of an audience of 30 than it is to do a meeting with 6-7 people. BUT there’s hardly any difference at all between 30 and 800. It’s pretty much the same. In fact, 30 can be more intimidating because you’re close and can see each person’s expressions. At 800 it’s just like a wallpaper with texture.
    • BTW – if you are speaking to hundreds of people, there’s a good chance that a spotlight will be blasting your face, and you won’t see any more than maybe 30 people anyway…

  • The best technique I know to overcome the stage fright, is to speak to a single, friendly person. When you get on stage, look in the front rows for someone that you either know, or that just looks kinda friendly, and speak to them while ignoring everyone else.

  • If you get tired of speaking to just that person, switch to a different friendly face after some time. Don’t worry about all the rest – they are like a wallpaper or background texture.

  • But ultimately, remember – you’re speaking with a bunch of supportive colleagues and friends. Everybody there is on your team, and no one is worried about glitches etc. You have a very supportive crowd.

That’s more or less the sum of my 20+ years of speaking publicly!

Outbrain GCS 2019
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Outbrain paid publishers 4x what Facebook is

Image credit: Thought Catalog

Facebook announced this week that they’ll be spending $300M over the next 3 years to support journalism. Google made a similar announcement last year.

As Peter Kafka over at Recode writes, a bunch of this is actually going towards helping publishers contribute content to Facebook’s Watch product:

Facebook will keep spending money on its previously announced program to bring news videos to its Facebook Watch hub, which launched last year. Facebook is paying news outlets like Fox, ABC, and the BBC to produce programming for its site — but those payments aren’t guaranteed

Peter Kafka, Recode

As Jason Calacanis points out, Facebook is committing 0.3% of it’s annual revenue towards this:

Right on cue, Facebook does the most misguided, heavy-handed and unsustainable version of sharing the wealth, by sharing $100m a year — .3% of their yearly revenue — in a series of grants.

The cynical take is that these kinds of one-time payoffs, to highly influential media organizations, are designed to silence and tamper criticism — they’re buying off influential people for a pittance.

Jason Calacanis

Outbrain has paid out to publishers over 4x this amount (more than $1.3 Billion) over the *past* 3 years. And this is money that went directly to publishers, with no strings attached. Don’t let Facebook’s PR confuse the story – their core business is a direct competition to publishers, both in ad $$’s and users’ attention. Unlike Facebook, Outbrain has a truly enormous impact on publishers’ ability to create journalism sustainably.

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