AdExchanger Podcast Episode Summary: "Teads On The Brain"
Podcast Information:
- Title: AdExchanger
- Host: Alison Schiff
- Guest: David Kostman, CEO of Outbrain (soon to be CEO of Teads post-merger)
- Episode Title: Teads On The Brain
- Release Date: March 11, 2025
1. Introduction
In the episode titled "Teads On The Brain," host Alison Schiff welcomes David Kostman, the CEO of Outbrain, who is transitioning to lead the newly merged entity, Teeds (a combination of Outbrain and Teads). The discussion centers around the strategic merger, the evolution of Outbrain, and the broader trends in advertising and marketing technology.
Notable Quote:
Alison Schiff [00:12]: "Our guest this week is David Kostman, CEO of Outbrain, soon to be the CEO of Teeds..."
2. Guest Background
David Kostman shares personal insights, revealing his diverse international background. By the age of 30, he had lived in eight countries across four continents, contributing to his multifaceted perspective in the ad tech industry.
Notable Quote:
David Kostman [01:46]: "By the age of 30, I lived in eight countries and 1, 2, 3, 4 continents."
He is proficient in five languages: English, Hebrew, Portuguese, French, and German, with additional conversational abilities in Spanish and Italian.
3. Company Evolution and Merger with Teads
Alison and David reflect on their parallel journeys beginning in 2014, with David joining Outbrain and Alison starting at AdExchanger. David highlights the significant transformation of Outbrain over the years, emphasizing the shift towards a demand advertiser-focused approach, broadening capabilities beyond performance to include branding and video.
Notable Quote:
David Kostman [04:00]: "We've become much more demand advertiser focused over the last few years, which is obviously also helping to support our publishers."
The culmination of this evolution is the merger with Teads, aiming to create a robust platform that serves both advertisers and publishers effectively.
4. Overcoming 'Clickbait' Perception
A central theme of the discussion revolves around reshaping Outbrain's image from being perceived primarily as a provider of clickbait to a platform that drives valuable traffic and enhances publisher-audience engagement.
Notable Quote:
David Kostman [08:03]: "We are driving audiences to create value for publishers... continuing to invest in performance, but also delivering on branding and video."
He emphasizes that approximately half of the clicks generated by Outbrain contribute to driving traffic to more relevant content, benefiting publishers without direct financial compensation.
5. Previous Attempted Merger with Taboola
The conversation touches on the 2019 proposed merger between Taboola and Outbrain, which ultimately fell through in September 2020. David explains that the deal was structurally different from the recent merger with Teads, primarily focused on financial efficiencies rather than expanding value propositions.
Notable Quote:
David Kostman [11:05]: "The deal dragged out with a very long regulatory review process... we were still in process in the UK... we decided to move on and separate."
Despite its termination, David expresses no regrets over the failed merger with Taboola, highlighting the distinct strategic direction of the Teads merger.
6. Details of the Teads Merger: Rationale and Integration
The merger with Teads, valued at approximately one billion dollars, was driven by the complementary strengths of both companies. David outlines the goal of transforming Outbrain into an end-to-end full-funnel platform for the open Internet, catering to both branding and performance objectives for advertisers.
Notable Quote:
David Kostman [14:41]: "We're looking to really serve brands across the funnel, delivering on both branding and performance objectives... allowing an advertiser to run a campaign that is omnichannel around all these different platforms."
From an integration standpoint, the merger involved unifying organizational structures, streamlining management, and consolidating development centers across Southern France, Israel, and Ljubljana to foster collaboration and innovation.
Notable Quote:
David Kostman [22:05]: "From day one we were very clear about the new organizational structure... we merged the two companies and launched as a unified company in a very effective way."
7. Publisher Data Ownership
Discussing data ownership, David clarifies that both publishers and the company retain rights to first-party data generated through user interactions with the news feed. This dual ownership facilitates the enhancement of predictive algorithms while respecting publishers' interests.
Notable Quote:
David Kostman [30:34]: "The publisher owns the data and we own the data, and we can use it to improve the overall ecosystem of the open Internet."
8. Addressing MFA Concerns
The term MFA, though not explicitly defined in the transcript, refers to issues related to low-quality content or malicious traffic. David addresses concerns about Outbrain inadvertently serving such content, asserting that their platform drives minimal MFA traffic (less than 10-15%) and proactively blocks MFA access programmatically.
Notable Quote:
David Kostman [32:04]: "We account for less than 10% or 15% of MFA traffic. The rest is coming from big platforms like 80% plus."
He emphasizes the company's commitment to quality by eliminating MFA content from their programmatic access and ensuring that only trustworthy advertisers are featured.
9. Generative AI in Product Roadmap
Generative AI plays a pivotal role in Outbrain's strategy, particularly in creative optimization and campaign performance. David highlights the implementation of AI tools that generate and test various ad images to enhance campaign effectiveness dynamically.
Notable Quote:
David Kostman [35:07]: "AI allows advertisers to very quickly create a campaign and then continuously test the effectiveness of different images... we've seen a much faster, better workflow and ability to launch campaigns with much better results."
Looking ahead, AI and machine learning models are set to optimize the entire user journey, bridging branding and performance campaigns to deliver superior outcomes for advertisers.
10. Leadership and Soft Skills
Beyond technical and strategic discussions, David shares insights into his leadership philosophy, emphasizing the importance of bringing people together and fostering win-win scenarios. This approach has been instrumental in successfully merging the two companies and ensuring a harmonious organizational culture.
Notable Quote:
David Kostman [39:46]: "It's about the ability to bring people together and always look... how do you create a great outcome for everyone or just for yourself."
11. Conclusion
The episode "Teads On The Brain" provides an in-depth look into the strategic merger between Outbrain and Teads, highlighting the company's evolution, commitment to quality, and innovative use of AI. David Kostman's leadership and vision aim to redefine the advertising landscape, positioning the merged entity as a comprehensive platform that effectively serves both advertisers and publishers in the open Internet ecosystem.
Final Notable Quote:
Alison Schiff [40:54]: "Here's to bringing people together and to brand performance."
This comprehensive summary encapsulates the key discussions, insights, and conclusions from the podcast episode, offering valuable information for listeners and those interested in the dynamics of advertising and marketing technology.