What’s the best way to keep readers on your site and coming back for more?
The obvious answer is to create more content they want to consume – but it’s not that simple. A growing trend and important trend is the use of related links on web pages – both to promote publishers’ own stories and to make some money by promoting other people’s. None of this is new but it’s rising in importance.
Here are two companies taking very different approaches to content recommendation:
Update: Since we spoke to Outbrain, they have signed a deal to provide their related content technology to The Guardian. The firm is also sponsoring The Guardian’s Digital Content Hub.
Founded in 2007 by Yaron Galai , and Ori Lahav, Outbrain recommends content based on user behaviour using cookies, rather than picking content related to what they are currently looking at.
“Historically, anyone who was in this business was approaching it as a related link problem,” Galai tells TheMediaBriefing. “I think a lot of that comes from search being so dominant in our world.”
Outbrain offers two columns of related content: links labelled “We recommend”, which come from the publisher’s own site and “From around the web”, which links to content on other sites which generates revenue.
Larger publishers get a cut of the revenue Outbrain makes from clicks, smaller sites using Outbrain’s self-service platform don’t. Two thirds of the content it links to is from publisher sites, the remaining third is advertiser content.
Outbrain claims hundreds of thousands of sites use the self-service platform but there are a “couple of thousand” larger publishers with whom it shares revenue.
Galai claims the related links provide a high level of engagement, and make signficant returns for bigger publishers
“The click-through rates on our units as a whole are about 6 percent. We hear from publishers it’s usually the highest click-through rate on their site.
“For typical news publishers, what we are hearing is we generate about 15 or 20 percent of their revenues on content pages.”
Outbrain is sometimes criticised for the quality of the paid links on its site, but Galai says it constantly reviews its partners to maintain quality.
Galai says: “In Q4 we cut a bunch of our biggest buyers, reducing potential buyers by about a quarter. The judgement call was: ‘do they enhance the trust with the publisher?’ and in cases where they didn’t we cut.”
Outbrain “goes in and out” of profitability says Galai, but has an impressive list of partners including The Telegraph, The New York Post, CNN and Trinity Mirror.
Galai previously sold his company Quigo to AOL for $363 million. Originally backed by Israeli VCs Gemini and Carmel, and US based Lightspeed and Index Ventures, Outbrain has raised $64 million to date.
Updated: See Bill’s comments below
Kalooga takes a very different approach. While its content is based entirely on what a user is currently consuming, it is focused on images. Also unlike Outbrain, it doesn’t normally link to other content around the web, as most publishers prefer to keep traffic on their own site or sites.
It allows publishers to turn images into links which take a user to a picture gallery of related content. In amongst the images is an MPU or other ad format – the revenue from which Kalooga shares with its partners. Each image links through to another piece of related content.
It also offers a range of widgets that can be placed around pages, such as picture sliders.
Chief commercial officer Bill Swanson, formerly MD for digital at Independent News & Media, says publishing click-through rates (CTR) are anywhere between five and ten percent. Once they are looking at a gallery, more than half of users click through into additional content.
Some publishers let Kalooga sell ads for them, others sell the ads themselves and use the statistics on user engagement to nbegotiate better rates.
“They’ll be using the stats and asking for higher yield,” says Swanson. “It’s incremental revenue to the publisher and additional dwell time. Large publishers are making six figures from this.”
Another advantage, says Swanson, is that Kalooga automatically generates picture galeries that would otherwise take time to build manually.
Kalooga is profitable, and is focused on growing its base of partners, which currently include The Independent and Dutch news publisher Telegraaf Group.