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Next in Media
So, is AI Going to Ruin the Internet and Kill Journalism?
00:26:56
Next in Media spoke with David Kostman, CEO of Teads (formerly Outbrain) about the company's plans to bring together performance advertising, web video and TV, and move beyond its reputation as haven for 'cheap' ads. Kostman also talked about how publishers are preparing for more AI-driven search and content discovery, and whether brands are as invested as they should be in news and the open web.
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- [00:00]
Mike Shields
Fragmented audiences don't have to be fragmented solutions. Elemental TV enables CTV publishers to unlock the full value of their inventory through advanced audience data capabilities, AI powered curation and transparent direct programmatic delivery. By continuously innovating and leveraging cutting edge technology, Elemental TV is driving the evolution of ctv, empowering publishers to maximize revenue and deliver targeted data driven advertising experiences. Ready to see what's next in CTV? Learn more at elemental tv.com this week on Next in Media, I spoke with David Kosman. He's the CEO of the new Teeds. Right after the company's long in the works merger with Outbrain. David and I talked about how this partnership is something of a web real estate deal as TEEDS will not control both the bottom of the page and interstitial videos for a slew of publishers across the web. That combo sounds potent. Yet it's hitting at a time when AI threatens to change the entire Internet surfing experience, potentially making it really hard for people to even reach websites and maybe changing the whole calculus for digital advertisers. So David and I talked about that how publishers are preparing and where AI may actually offer an advantage to some. Let's get started. Hi everybody. Welcome to Next in Media. I'm Mike Shields. I'm here with David Kosman. He's the CEO of the new teeds. Hey David, thanks for being here.
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David Kosman
Hey Mike, thanks for having me. Pleasure.
- [01:29]
Mike Shields
The pleasure of mine. It's excellent timing because you are this bit. You've had some very big news outbrain. You know we talked for years about there was a possible Outbrain to Boola merger. Now it's Outbrain in Teeds which maybe not have been as expected. So let's just talk about the big news of the moment. What's behind that deal?
- [01:48]
David Kosman
So it's actually always been for me personally since I took the job at CEO Al Brain about seven years ago, the dream combination would be Teeds, which is combining two leaders of the open Internet. Albren very strong in performance and native Teeds invented the space for video. And combining the two really positions us as scale leader with about $1.7 billion of ad revenues and really the only one that can deliver performance and branding for brands, whether they are enterprise brands, small medium enterprises, sort of our focus combined is to deliver full funnel outcomes which are performance and branding for all type of brands. So we're very excited about it. And so it was the end of a very long process. We actually like tried to combine with them like two or three times in the past were very, very close. Very close. And for some reason didn't happen. And now sort of the circumstances happened with the controlling shareholder Altice, who needed to sell assets. So it's all worked out.
- [02:55]
Mike Shields
Right. Oftentimes when you get close, you don't want to revisit things. You've already gone through that. That's actually, that's. That's cool. That came to the finish line. Okay. So. And that makes sense to me that you're. Instead of rolling up two companies that do the same thing, this is, this feels like a complementary get bigger together kind of plan.
- [03:11]
David Kosman
Yeah. That, you know that that's why it's exciting because it's sort of broadening what we do in a much more significant way. It's not just duplication, eliminating costs. It's really about sort of new day for both companies. I mean, we sort of adopted the name Teeth. So it's.
- [03:26]
Mike Shields
I was going to ask you why that.
- [03:28]
David Kosman
So it's the. It's a new teed that is a much broader than was Teeth was and it's much better than what our brain was and sort of. It's. It's a new company but we decided to adopt the name Teeth. Think where we want to go. And Teets is really synonymous with very premium brand advertising. In the last years they started driving performance for the same brands. They have, you know, a great position with the agencies and the brand and this is where we. Our brain, where we're going. I mean we launched a year and a half ago, we launched a product called Onyx that was sort of our foray into more branding and, and this ability to do full funnel. We launched product called Moments, that's vertical video. But the name Peds I think we felt is really the one where sort of where the company should go and we sort of made the decision. Although we are the acquiring company, the brand is, I mean, sort of newly designed. You can, you can see it sort of. It's not the old Teeds. It's. That's why it's the new Teeds. And we got really great feedback on both the selection of the name and then sort of how it looks and feels as really a combination of two great companies that bring the benefits of the two together.
- [04:36]
Mike Shields
So we're going to get into this and the how brands come to you in this full funnel thing you're aspiring for. Is there a way to define you like, you know, over the years, you know, Outbrain and Taboola were thought of as either ad networks or bottom of the page like filler or you know that TEEDS was an ad network or video network at one point I think there was a talk of being building like the operating system for publishers. So I guess what are you if you can define yourselves.
- [05:03]
David Kosman
So I think both companies, teeds, the old Teeds and the old album and the new Teeds, one of the unique aspect is that we have exclusive access to that inventory of publishers. So we have exclusive access to the end of articles. TEEDS has several different type of exclusivities on the middle part of the article. And with the combination I think we're the only ones again that can combine also the data around these two placement and provides a much better and higher quality monetization for sort of the premium publishers. We have.
- [05:35]
Mike Shields
You've got real estate. This is not just another ad network. Everyone can fill, fill certain spots or you know, as part of the chain. This is like you've got defensible real estate as part of this deal.
- [05:45]
David Kosman
Yeah. So we're not an ad network because a networker needs to bid on placements. We have those strategic relationships. One of the uniqueness of, of the companies that we have on the supply side, we have this exclusivity. So you can say we own control the real estate. So we. It also helps also a lot in terms of understanding the placements, the data, what will work where, so that it's much more than bidding into a placement. We, we have that the value proposition of our brain for publishers is also much broader. So we are very much involved in engaging the audience in articles, other videos, et cetera. So it's a much broader that also gives us a lot of data. On the advertiser side, Pete's has what is pretty unique on the open Internet. It has more than 50 joint business partnerships with the top brands of the world from Heineken, Visa, Apple and many others where they transact millions of dollars a year and do a joint planning process. So it's not that today we can combine them and we'll take the teats brands and put them in the feed. But the ability to sort of drive this full funnel, drive performance, add prediction capabilities, add performance capabilities into the TEEDS platform for those brands and over time develop a unique value proposition because we control the real estate. So think about, you know, we can take the whole end of article and sort of have it only a full brand page, no brand adjacency, full share of voice, no quality issues. So there's a lot that we can do together and also link what the user Experience is on the video on the top and connect it to the bottom. And over the last two years, which, which is something that, well, also a big driver for this. Teeth has entered the CTV business in a pretty big way. And in the last quarter it accounted for more than 10% of their revenue is already on CTV where they have again exclusive placements on some home screens of OEMs or TV manufacturers and they also do online video. And the beauty of combining sort of on an omnichannel basis, sort of a campaign for an advertiser we can dynamically allocated between digital and CTV is, is a great asset that beats has.
- [07:52]
Mike Shields
I want to, I want to come back to the CTV aspect there it seems like you have a couple of challenges perhaps to overcome. Maybe fair or not, you know, there's the. You and Tabool are always labeled as like this chumbox thing. This, you know, the stuff at the bottom of the page that people make fun of some of the ads. And then on the other end, this is not a teed issue specifically, but this in Stream outstream debate that happens about whether video that you can buy and sell all over the web is like, you know, real video or not, or as valuable as, you know, something in a full episode player. Are you facing those two stigmas? If they are stigmas and how do you deal with either of them?
- [08:29]
David Kosman
I think there's been some perception. I think it's mostly impacting, I would say more the outbreak side of things. We have moved over the last two, three years and really decoupled from our competitor in terms of moving much more sort of more premium on the demand side, more premium on the publisher side and sort of really moved away from certain demand sectors. But still I think that has been more of an issue. I think it's also part of the decision of sort of where we want to go is really more where Teeth has been positioned as a premium brand in the advertising market. So I think that's on that front. I think in terms of in stream and outstream, I actually think that the redefinitions helping the teeth business and the new teeth because what was there was a misperception on some things that were classified as in stream and they were really outstream and I think Teets never misrepresented their inventory. So I think actually the fact that what was so called trying to be extreme is sort of more a one bucket is very helpful because I think it sort of eliminates that misperception that certain inventory is less valuable than the other.
- [09:38]
Mike Shields
Getting back to the combination now and the opportunity you have and you talk about how you have, you have this great footprint and you have the upper funnel, lower funnel kind of combo going to compete today. That all makes sense to me. Right. Do you need to be a player in. It seems like the companies with identity are the leaders or they're getting a bulk of the dollars. If you're a Google or Meta or those guys and or they have retail media data. Do you have to have either to be a big viable competitor for digital dollars? And what can you or your partners do about either?
- [10:10]
David Kosman
Look, I think any of company that competes sort of on the open Internet, I mean we do compete with budgets that get allocated across platform from the walled gardens to the open Internet. I think the advantage we have, I mean on teeds today we reach more than 2 billion unique users across the world. I think you have for brands when we talk to them, these are incremental audiences to what they have in other places. You know, it's less dependency on some of the walled gardens. I think there's excellent targeting and reach that we can get that is based on tremendous amount of data signals that once you combine them obviously it becomes even much more.
- [10:47]
Mike Shields
So you're not behind on targeting, so to speak because you have so much information but not. You don't have a bazillion logged in people, but you have other stuff that's really valuable.
- [10:55]
David Kosman
Yeah, so we have tons of other stuff. We don't have the logged in but we, for example, we have as a difference maybe we have the real intent of the person. So when you go and you're going to sort of start reading about, you know, maybe cars or maybe a health condition, God forbid, or something else that is data that we have. I don't have you as a logged in user but I know that you read about so that you went from the health section to maybe the gardening section. I know all of that. And then all that in real time you potentially are, you know, thinking about refurbishing something or acquiring a car or getting health insurance. So I, we know that because that's what you actually do. You're not going to post it on Instagram or TikTok or Facebook. That's you're not going to do it. So that this is your real life.
- [11:40]
Mike Shields
This is what you really care about.
- [11:42]
David Kosman
This is what you really care about in real time. We process it obviously all these signals in, in real time in an effective way and now the ability to combine it. And I think this, this combination of which really Excites me of performance and branding is very unique in what we're going to be doing and there's a multiply effect. I mean no, no advertiser can only do one or the other and they sort of do help each other. There's a sort of interrelation between sort of you do more of the awareness, you can drive more performance. I mean short term versus long term. I think we can really be a great partner for brands on both sides.
- [12:17]
Mike Shields
On that note, do you think that is potentially shifting? Because over the past couple of years as we've seen like retail media exploded and it's just like this overall performance wave has taken over, seemingly taken over. That's where all, all brands seem to care about. But you are seeing like an Amazon talk a lot more about full funnel and connecting these dots and there's a, there's seems to be more interest in that. Is that potentially shifting now that we've had retail media mania?
- [12:42]
David Kosman
I, I think it's shifting and I think there's a deep understanding of the sort of interrelation between the two especially when you talk about enterprise brands or even small medium enterprises. Today for example, if you look at the ability of a SME to do a little bit more on video and branding because of AI and have the assets offers to create the creative side is much cheaper, much more accessible. Targeting on a CTV environment is like digital. So it's not that you need to have linear TV budget. So for example we have at the old outbrain huge amount of small medium enterprises that advertisers performance whether it's a credit card lead generation for car dealers and others. But there's a huge opportunity for us to help them get on CTV with the old teed asset. So I think, I think that is definitely something that we are very, very heavy into and I think Amazon does it obviously in the great own environment. I think when you look at the open Internet there's no other company that, that can do that. I mean there's others that we will drive I think the best performance out there because that's what Alpen has been doing. And now complementing sort of these predictive analytics into what teeth does will help their brands drive better performance. But then combining it with the branding capabilities that that's unique at scale.
- [14:01]
Mike Shields
All right, speaking of the open Internet, let's ask about the elephant in the room right there. You're, you're building this juggernaut that has all these pieces of the open Internet at a time when there is this perception Slash theory that you know, the Internet's going to be ruined. It's AI is going to ruin everything. No one's going to go to websites anymore. It's going to be all this. Either it's going to be conversational search or you're going to have agents do all your stuff for you and the websites are over. You know, these sound like extreme scenarios, but there's definitely a school of thought that this is all over. What are your publishing partners doing to combat that if they need to, like what's going on there?
- [14:36]
David Kosman
So I think it's obviously it's early days and it's. I think it's a real driver for I think a lot of opportunity, but also a lot of, a lot of some risk for sort of the traffic. I think what we've seen to, at least to date is that. And we compare it every month sort of when you look at the professionally produced content, whether it's news or entertainment or hobbies or others, we have not seen that. In fact that at this point. I do think that when you look at newsworthy content that is sort of short term. I don't think that sort of even the AI summaries will hit that anytime soon. I think more on evergreen content, I think potentially you're looking at more of an impact on traffic. I think there's going to be advertising sort of opportunities around it. It has to be monetized somehow and there's going to be a. In the value creation chain, there's going to be a way to compensate sort of for that. And I think AI also provides a tremendous amount of opportunity to do things faster, better. We've adopted AI on sort of the performance side, on creative, on titles, on headlines. The Old Teeth has a huge creative studio that is part of their value proposition to brands where they have already adopted a lot of AI tools. So I think on that front there's a big opportunity, obviously internal efficiencies. But on the advertising side and on the publisher side, I think it's a mix of opportunity and some risk. On traffic, sure.
- [16:05]
Mike Shields
Okay. On the flip side, so the opportunity aspect of it. Can I help with your part? You and your partners better with discovery, better experiences, making sure people find what they want, get, get to where they need. And that's a. I'm sure that's like a macro industry project, so to speak. But what do you think about how to. How it can improve things and be channeled?
- [16:24]
David Kosman
Look, I think it, it also can improve because it becomes faster, more efficient. I mean more More accessible. And then the question is, how do sort of the original content creators get compensated for that? I mean, because this is fueled by data that has been produced. I think that is where I think the industry is coming together to, to find the best ways to sort of allocate the economic value to this.
- [16:50]
Mike Shields
Do you think we, we as an industry need to do something to, you know, there's, there's a fear that people are, it's gonna, there's gonna be so much crap out there. Bad, you know, AI generated content. Not that AI is not useful in creating content or shaping it, but to like almost educate the consumer, the market, the value of, of these real publishers.
- [17:10]
David Kosman
And look at, then when you look at original mission of TEEDS and us is really to help the publishing industry thrive. And we've been doing that for many years. I think we, you know, we're very strategic in terms of the monetization value. We bring to the CNNs, the foxes, the Washington Post or the New York Post. We are exclusive with both, you know, all four of them. So no political statement here, but this is a very, we're very important partners, for example, for these type of publishers. And I think the fact that there is one large company like ours that sort of, that's what we sort of have as part of our mission will be, will be very helpful to them in terms of elevating the user experiences, the quality and, and monetization on the side. And I think, listen, it's an important thing for society. I mean, we want sort of our children to go and consume the news on any professionally produced, curated, the sort of property that is not user generated. I think there's this, for example, big efforts we are doing with others in the industry around sort of the blocking of news pages. One big, I mean, you know that story.
- [18:18]
Mike Shields
How's that going? Are you breaking through? Because yeah, you wonder if brands care. Are they, are they, are they gonna, are they afraid of it? Are you getting some headway?
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David Kosman
Like it's an interesting thing when you talk to CMOs and so they say, oh, I didn't even know I'm right. Wouldn't I be?
- [18:32]
Mike Shields
How could I never do that?
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David Kosman
Yeah, but then I would never do that. Of course I want to help journalism and I think it's important for society. But then you have the buyer at some agency say no, I'm going to block. And then they block it like in a huge way where like, it's like domain blocking. Totally. I mean, why wouldn't you want to be. Even if you don't want to be by the way, you can be next to news pages. It's been proven by research that you know, your brand is super safe and very well. I mean, you know, if it's against a newspaper, like against the sports page. So there's a lot of research approves that. But I think we are managing to make some progress around being more selective about it at most. Judicious about what. Yes and whatnot. And I think we can make a lot of progress and I think it's part of something that teeds with the new teeds want to continue to do with others in the industry.
- [19:20]
Mike Shields
One more AI question, I promise the There's a huge wave of adoption of AI driven media buying optimization platforms. Right among the big, among Meta and TikTok, Amazon Pictures, they all have these tools. Do you think is AI going to take over media buying? Do you need to prepare for that reality? Is that not realistic?
- [19:42]
David Kosman
I think that's something we've been adopting already. I mean AI is a big term.
- [19:46]
Mike Shields
I mean it depends on what you mean.
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David Kosman
Yeah, we've been using predictive AI for years in terms of that. That's how the algorithms work. They immediately sort of learn of what they've seen from certain placements, certain ads, what works where and continuing to improve. So I think that there are huge opportunities on, on injecting AI into that. I think, you know, part of the benefit of the combination is that we can allocate resources on the engineering side to do that. Actually, I mean we went through a combination so it has some synergies. But if there's one area we're hiring and looking is for more talent in that area. I think that sort of the algorithms will be significantly improved and change in terms of even how you think about them when you adopt some of these new models. So I think it's a huge opportunity. Obviously we need to invest in it and you know, the big players are investing some money in it as you can see even from last week. I mean it's staggering, I mean the amounts that are being invested. So we have to, you know, within our, you know, 400 product and engineering team do the best we can to do it. But I think we, we have a lot sort of that we have done. I mean in terms of automating the bidding processes, incorporating AI in that. And I think there's still, you know, a lot that we can do there.
- [21:10]
Mike Shields
I said I would come back to ctv. I want to ask you about how it's. That's not that's another thing you might not expect from a big open web company. You know, for a long time like quote unquote online video and see and television were different worlds, different buying mechanisms, all that stuff. How does teeds get headway in a space that is dominated by some big players? And what's the up. What's the opportunity with connected television? Because some, some of your partners are in the. Are in CTV and some are not right. Some you're. So it's got to be, it's got to be interesting way to get into that world.
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David Kosman
So it's a sort of, it's a broadening of the service we give to advertisers. So advertisers are looking for an ability to take their budgets and spread them dynamically between digital CTV linear. And I think it's becoming sort of more of a unified view and the budgets are shifting significantly from linear to ctv. So you want to be there for sure. As a company Teats has built. They've been a little late to the game because of lack of investment in early days, but I think they caught up and today I mentioned it's a significant part of the business starting to be. And we're attacking it from I think three angles. One is unique formats and placements that we have with some of the original equipment manufacturers like LG and Hisense. So the way we have this home screen where you spend a lot of your time looking at the title so.
- [22:39]
Mike Shields
They can, they can play there a little bit more than like a traditional third or you can innovate.
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David Kosman
Exactly. So you know a significant part of the business that we have now in CTV is around those placements and we're broadening that. And that is also something that is you can buy programmatically because it's a non standard format. So that's one. And I think it really plays to the original strength of. Of the original teeds. On top of that we do the normal 30, 17, you know, 20 second, 30 seconds sort of videos in the stream and there I think the advantage that we have is that we can do it on a omnichannel basis. So launch a campaign, you can allocate it dynamically between digital and CTV and also there we have relationships with Roku's with a lot of the streaming applications. And the third element is where I think we will be investing a lot. I referred to it a little bit earlier is that the CTB is also becoming more available, affordable for small medium enterprises as a performance sort of platform.
- [23:41]
Mike Shields
Yeah, you're seeing a Lot of interest in that and attempts at trying to channel that market.
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David Kosman
So I think combined basis our brain traditionally is very strong with small medium enterprises. Driving performance teeds on ctv. Combination of that plus the again the ability through AI to create video in a faster, more efficient way I think creates a huge opportunity. And there we are in the early days of it.
- [24:06]
Mike Shields
So do you think you play a role in helping those brands get TV creative?
- [24:10]
David Kosman
No, we will help. I mean we do not do the creative. We have a creative studio but we don't obviously do the creative. But they are in the ecosystem. Any companies that are now helping SMEs to produce pretty quickly video and test it, we can be the arm that delivers it. We have those relationship. We have a lot of look since we announced the deal, I mean a lot of our small medium enterprise customers have talked to us about how can they get more into video and do that. And we had tremendous sort of feedback from some of the teeth brands that want to drive better performance and like you referred what Amazon is doing in to this combination. They see the opportunity for teeth not only to do branding and some driving traffic, but really drive performance. So that's how sort of we, we think there's a big opportunity there. And, and on the ctv I think these are sort of the three I mentioned. There are really the differentiators.
- [25:03]
Mike Shields
Last thing, David, what's next for you guys? I know this. You've, you've, you've got a lot, you've done a lot of work behind the scenes to make this company one. What should we look for in the next six months? What's exciting for you? What are you looking forward to?
- [25:14]
David Kosman
So I need to relax a little bit. It's been a good luck. It's been. I'm kidding but it's been a, you know, obviously a very, very exciting and busy year to get to the closing. I mean it is a merger of two companies, each of them about a thousand people. It's very large. We did the financing around it. So there was a lot of work and very excited now to launch the new teacher. A lot of the next few months is about execution. Starting to really see the benefits of this cross selling opportunities bringing sort of the message of CTV to SME. So there's a lot, I mean a lot of the strategy. One of the benefits we have is that we had a pretty long regulatory review process of about six months. So as much as it's also painful but also gives you an opportunity to do very thorough planning. Yeah, we basically have all the big decisions made. The organization is fully baked in from everyone knows what their position is, who's in, who's out and who's managing what. So we, we're very, very.
- [26:16]
Mike Shields
That's probably rare in a merger, right? Like, very rare.
- [26:18]
David Kosman
No, it is. I mean, I've done many of that. This is very rare and it's at big scale. So I'm, I'm super pleased with that. So I think we can now really focus on execution and sort of the stronger together of Outbrain and Teed into the new Teeds, I think will be just tremendous for the industry and for us.
- [26:34]
Mike Shields
Well, it should be fun to watch. Good luck with your plan to relax. But David, thanks so much for your time here. Great conversation.
- [26:40]
David Kosman
Thank you very much, Mike. Great. Was a pleasure.
- [26:43]
Mike Shields
Thanks again to my guest this week, Teed, David Costman and of course my partners at Elemental tv. If you like this week's episode, please take a moment to rate and leave a review. We have lots more to bring you, so please hit that subscribe button. We'll see you next time for more on what's next in media. Thanks for listening.