ADOTAS – Last week, Outbrain was in the news for raking in $35 million in funding. For a lot of people, that turned the idea of a content discovery system (the widget that links readers to other, similar-in-topic pages both within the same website and on external sites, whose publishers pay to be linked and who kick back some of their revenue to the sites that refer readers to them) from a handy if taken-for-granted tool into a something worth taking seriously, commercially speaking.
Shortly after Outbrain’s news hit, we received a tap on the shoulder from the folks at nRelate, who pointed out they’re doing pretty much the same as Outbrain and reporting a comparable click-through rate (5.7 percent) only with less funding — yet with more publishers at the same time. “We raised $500,000. That’s less than 1 percent of [Outbrain],” nRelate founder Neil Mody explained in a recent phone conversation. “But we have about one-tenth of their impressions.” That’s close to 450 million impressions per month, he clarified. Since we spoke with Mody, his company’s released some more impressive figures: Its year-end report for 2011 showed 994 percent growth in its active sites (up to roughly 17,500, as of the Dec. 2o report), and over 1,000 percent growth in click-throughs, widget impressions, impressions per second and clicks per second.
The difference is that Outbrain works with big-time media (CNN, MSNBC, Reuters U.K., Newsweek, The Chicago Tribune, Slate, USA Today, Fox News, Sky News, Hearst, Future Publishing, Hachette Filipacchi Media, Mashable and AllThingsD and so on), while nRelate started out focused on blogs, helping pretty much any takers syndicate their content. It’s a market where, in terms of sheer dollars, the stakes are lower, but there actually are stakes. WooThemes, creators of WordPress themes, polled WordPress users recently and found that 77 percent of respondents made money off of their sites and 31 percent earn a living off of them. (The survey’s results are served up in a detailed infographic.) The money’s coming from somewhere, even for those using a free blogging platform like WordPress.
“The really big websites have the technology and the money,” Mody explained, “but everybody’s valuable. What I found myself doing on the web was reading smaller publications — mostly bloggers’ content.” And although there’s a different kind of exchange going on here than there is in standard advertising — publishers are essentially advertising their content via their peers (“I ask people, ‘What’s the last ad you remember from searching the web?,'” Mody said. “No one has ever given me an answer. But do you remember the content you saw in the last day?”) — there are implications for the ad industry at large. Mody explained his company is getting interest from larger publishers now — Conde Nast already uses it — because, as he put it, “I think what they like about our network is that we’re hitting these niche sites. They’re getting a type of user that’s not just reading those mainstream sites. It’s a whole different level of engagement.”