Today we’re excited to announce the completion of Outbrain’s acquisition of video intelligence AG (“vi”) – a major milestone for us, with video playing an increasingly important role in the lives of our media partners, our advertisers, and the users we strive to engage.
Video is already a very important and rapid growth part of Outbrain’s product offering and our business, with revenue just about doubling over the past two years. However, we believe we have barely scratched the surface, with video representing just shy of 10% of our overall business – there is significant room for video to grow our business.
As our video offering and our role in the video ecosystem expanded in recent years, the needs and aspirations of media owners and advertisers has been clear:
- Engaging users with highly relevant, editorial video content is essential for a great user experience, but has remained challenging to deliver at scale.
- Trusted, brand-safe, premium media environments are highly desirable to advertisers, but there is a scarcity of these opportunities.
- Performance to the metrics that matter to brand advertisers is crucial, particularly those that prove active engagement with a user – such as high viewability and completion rates.
- The contextual matching of both content and ads is more important than ever in a privacy-centric world.
Outstream video ads (video ads that are not part of a video stream, or attached to video content) go some way to solving these challenges, creating more video ad opportunities in premium, open web media environments. However, a more content- and user-focused experience typically leads to higher performance ad opportunities for advertisers, and creates more long term value for the media owner.
With vi, Outbrain will be offering media owners and advertisers an exciting canvas for video content, user engagement and monetization, which is 1) in-stream, 2) with high viewability and completion rates, and 3) entirely brand safe in quality environments. With vi, we expect to deliver a better user experience and significantly more value than can be achieved by solely inserting an outstream video ad into an article page or into a content feed.
At its core, vi offers a platform that contextually matches high-quality video content, with the surrounding media environment and content. This leading contextual intelligence also serves to more effectively match in-stream video ads with that high-quality video content. Publishers enabling vi’s technology will typically do so in prominent placements, such as mid-article or top of page placements, creating some of the most premium placements for viewable, brand-safe video ads to run. And this isn’t just theoretical! Over 1,100 media owners and publishers already power their premium in-stream video placements with vi’s technology already.
We expect the vi acquisition to significantly increase Outbrain’s addressable video market, as Outbrain now offers a video ad product that is appealing to advertisers who are currently spending on YouTube and other in-stream and CTV environments.
With that video TAM expansion, we expect vi will allow us to drive higher yield for Outbrain’s media partners, when we combine our current outstream video technology with this new in-stream video solution.
There’s one more personal aspect that has been very exciting for us when looking under the hood of vi’s technology:
A bunch of us at Outbrain pioneered some of the world’s earliest Contextual Targeting technologies (which do not use any cookies or other IDs), over two decades ago. At my previous company, Quigo, we built one of the first contextual advertising platforms in the world. But our focus and expertise has always been on the textual side, not video.
vi’s approach from day one of building their technology has been based purely on Contextual Targeting as well. It’s personally exciting to bring under the same roof the team that has pioneered contextual advertising, with a team that was way ahead of the curve on contextual video technologies. Especially in 2022, when the future is obviously not going to be based on cookies, IDFAs, etc, we’re excited to now have two very strong contextual teams on both text and video.
Finally, a word on acquisitions in general. Our previous three acquisitions – Zemanta (2017), AdNgin (2018) and Ligatus (2019) – have all been tremendous successes for us. They’ve spawned some of the most important products and technologies in our business today, such as our programmatic platform (Zemanta) and Smartlogic (AdNgin). But even more importantly, all three acquisitions have significantly strengthened Outbrain’s entrepreneurial and execution muscles with *all* the founders and CEOs who joined us through these acquisitions still at the company today, leading meaningful parts of our business.
So, beyond the new video capabilities we’re adding to Outbrain, we’re very excited to further strengthen our entrepreneurial muscle with the addition of two great entrepreneurs and video innovators – Kai Henniges and Jörg Boksberger – and the incredibly experienced and talented wider vi team who are now joining us.
Acquisitions are never simple – we’re well aware of their general success ratios. But our success on our last three acquisitions gives us good confidence that this is an Outbrain muscle that’s worth flexing when we see the right opportunities for growth through strategic M&A.
We’re hugely excited to use this muscle together with our new partners from vi, for many years to come!
This post contains forward-looking statements including statements about our ability to achieve the intended operational, financial and strategic benefits from our acquisition of vi. These statements are not historical facts but rather are based on the Company’s current expectations and projections regarding its business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipates,” “predicts,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict, including but are not limited to, changes in domestic and foreign business, market, financial, political and legal conditions; risks relating to the uncertainty of the projected financial information with respect to video intelligence AG; risks related to the timing and achievement of expected business milestones; the risk that the proposed transaction disrupts current plans and operations of the Company and video intelligence AG as a result of the announcement and consummation of the proposed transaction; the ability to recognize the anticipated benefits of the proposed transaction, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; and risks relating to video intelligence AG’s intellectual property portfolio. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors. There may be additional risks that the Company does not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views only as of the date of this press release. All forward-looking statements in this communication are based on information available to the Company as of the date of this communication, and the Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.