| 10.9°C Dublin

Media future shock and the rise of native advertising

Close

AdRoll's Adam Berke

AdRoll's Adam Berke

/

AdRoll's Adam Berke

What does the future of the media hold? What is the difference between a social network user and an online newspaper reader? What part does ‘disruption’ have? And how should ‘old media’ entities go about trying to make money in the new environment?

These perennial themes are often hotly debated by established industry executives and so-called ‘disruptors’.

One of the latter category’s most prominent emerging practitioners is Outbrain’s Yaron Galai. Outbrain is the king of so-called ‘native advertising’. Together with rivals Taboola, it dominates the panels of stories we often see at the bottom of a newspaper’s web page, often marked under the category headline ‘other stories from around the web’.

While some sniff at the content displayed in such stories -- often made up of celebrity gossip or ‘listicles’ -- the format makes money for both Outbrain and the publisher host, via a revenue-sharing model.

“The problem for a lot of publishers has been how to translate intelligent serendipity from time-honoured formats such as magazines to online sites,” says Yaron Galai, founder of Outbrain. “Offline publishers have had 100 years to perfect it. But a lot of that art has been lost with publishers when trying to get it online. That’s where we come in.”

Galai says that Outbrain’s formula is not a matter of pushing content based on sensationalist or tabloid sensibilities.

“It’s far more nuanced than that. We’ve developed over 50 different algorithms on how to figure out what people actually want to read and what they’re most likely to want to read next. The algorithms are about patterns and looking for correlations. And there’s competition between our algorithms, too. Ultimately, it’s about creating a business model that supports journalism.”

But Outbrain’s services, although innovative and disruptive, remain niche. Bigger questions remain. What are the basic principles that traditional publishers need to adopt in the future?

One company with a front row seat on this issue is the online advertising startup AdRoll. The firm, which now has a sizeable base in Dublin’s Silicon Docs, makes money through retargeting ads on different online properties. The company’s president and chief marketing officer, Adam Berke, thinks that newspaper should remember some of the aces they already have.

“Newspapers have premium content and that is extremely valuable,” he says. “We see advertisers with big budgets looking for this type of content and wanting to spend money chasing it.”

So what would he do if he owned a newspaper?

“I would think about how to capture my audience,” he says. “When you have an audience of scale, or you have their location, that’s really valuable for the marketing community.”

However, he warns that most people “do not want to pay for content”.

“If you have a premium audience you can definitely monetise that. It’s just finding the right way to monetise it.”

But is it possible to maintain commercial premium on original content in today’s ‘sharing economy’? In a world of Tumblr, Reddit, Twitter and Instagram, is the sharing economy anathema to commercialisation?

“No, the sharing economy has actually been okay for us,” says Jonathan Klein, co-founder nad chief executive of Getty Images, the world’s biggest premium photo archive.

““When you’re in a world where pictures are the primary language of communications, you have to adapt your model to selling images at every price point to every user at all budgets. Pinterest, for example, pays us to share our images. So instead of low images with no metadata, we allow them to keep metadata and we supply them with information about what images are being shared, where they’re shared and how often they’re shared. They can then use that to build an ad stream.”

Moving with technology is crucial to Getty Images’ survival, says Klein.

“Disruption is our cornerstone,” he says. “We were doing it before it was fashionable. When we started the business, the industry was run by people in love with photography. They couldn’t imagine looking at pictures on a screen, which was sacrilege. It needed outsiders to come in and shake it up. So our very existence came about from disruption.”

And the internet, he says, was also embraced.

“When we figured out that we could get paid for pictures on the web, we did it instead of worrying about quality,” he says. “When we’ve seen smaller companies that are disrupting us, we’ve taken them very seriously, sometimes acquiring the, It’s arrogant companies who dismiss new ideas and new disruptive companies. We have to think like startups. Even if a business model seems cannibalistic and anathema to our own business model, we often recognise that that is where technology is going.”

Getty Images’ growth has been phenomenal. 15 years ago, it was selling less than 100,000 images per year. In the second quarter of this year, it sold 105 million.

“That kind of growth wouldn’t have happened without websites or social media,” says Klein. “We’ve made it easy to embed images in a legal, profitable way.”

Yaron Galai and Jonathan Klein are speakers at this year’s Web Summit

Online Editors