Outbrain, a name synonymous with performance-driven native advertising, has quietly been undergoing a transformation. While analysts buzz about brand building solutions and the expanding footprint of the open internet, a seismic shift in their core performance business has gone largely unnoticed: the astounding dominance of their AI-driven automated bidding system, Conversion Bid Strategy (CBS).

This isn't just a technical detail. This is a potential game changer for Outbrain, for digital publishers, and for the future of advertising on the open internet. The numbers are startling: 73% of Outbrain's native ad platform customers are now using CBS, up from virtually zero just a few years ago. To put that in perspective, that's a level of adoption Google only dreams of with its own automated bidding system, PMAX.

So what's driving this remarkable shift? It's not just a matter of convenience, though the simplicity of setting up and managing a CBS campaign is undoubtedly appealing. The core driver is performance. CBS, leveraging Outbrain's vast trove of first-party data and sophisticated AI algorithms, is consistently delivering a significantly improved return on ad spend (ROAS) for advertisers.

This has profound implications. First, it signals a growing trust in Outbrain's AI capabilities. Advertisers, the ultimate arbiters of value, are placing their faith in Outbrain's ability to optimize their campaigns and deliver tangible results. This trust, built on a foundation of demonstrably superior performance, is a powerful asset in the increasingly competitive advertising landscape.

Second, it strengthens Outbrain's position as a vital partner for digital publishers. As walled gardens continue to encroach and advertising revenue models face ongoing disruption, publishers need reliable partners capable of driving consistent monetization. Outbrain, with its proven AI-powered performance engine, is increasingly filling that role.

But the implications extend even further. Outbrain's CBS dominance could represent a turning point for the open internet. By providing advertisers with a compelling alternative to the walled gardens – superior performance, incremental reach, and a robust, privacy-centric approach to targeting – Outbrain is helping to level the playing field. This is critical for maintaining a healthy and diverse media ecosystem, one that fosters innovation and ensures a vibrant future for independent digital journalism.

The rise of CBS is not just a success story for Outbrain; it's a testament to the power of AI to transform the advertising landscape and revitalize the open internet. While the industry fixates on the challenges of cookie deprecation and the allure of walled gardens, Outbrain is quietly building a future where performance and relevance reign supreme, driving value for advertisers, publishers, and consumers alike.

Hypothesis:

Based on the remarkable adoption rate of CBS and the implied improvement in ROAS for advertisers, we hypothesize that Outbrain will see a corresponding increase in average advertiser spend. Furthermore, this increased spend, combined with the higher efficiency of CBS campaigns, could lead to a substantial boost in Outbrain's overall revenue and profitability.

Zemanta DSP Spend Growth

This chart shows the growth in total spend through Outbrain's Zemanta DSP, indicating increasing adoption by performance advertisers.

"Fun Fact: Outbrain's Co-Founder, Yaron Galai, was also a pioneer in the contextual advertising space, having co-founded Quigo, a company acquired by AOL in 2007 for $340 million. This deep expertise in contextual targeting, which predates the reliance on third-party cookies, gives Outbrain a unique advantage in navigating the evolving privacy landscape."