Outbrain gets a revenue model, and it’s rather clever

Outbrain has today launched its “Sponsored but Good” program, an advertising product that offers contextual links within its recommended reading unit.

Outbrain is perhaps best known for offering post ratings, but along with ratings Outbrain also offered recommended links, either internally within a site (they power both blogs and traditional media sites), externally within a group, or externally across their entire member network.

The new program adds a sponsored link to the list of recommendations. But not simply a standard sponsored link, but a link that is contextual within the standard recommendations. For example, a post on stock broking would offer alongside normal recommendations a sponsored link about stockbroking, so users only see ads that are strictly related to the content in the post (that’s a basic example, in practice it’s more refined). One thing Outbrain excels at is matching related content, and in my experience it’s close to industry best in content matching, even more so than Google with Adsense.

Contextual advertising and sponsored links aren’t new, but this offering sits somewhere in between a standard Adsense unit, and intext advertising.

From Outbrain

Our thinking goes like this: readers come to your site to read. They are looking for other great stories to read, which is why the engagement rates on the recommendations we provide today are so high. So through Sponsored But Good, companies can now participate in bringing your readers interesting content by sponsoring the distribution of great, interesting stories. There are millions (well, at least many thousands!) of wonderful articles and blog posts that have positive, authentic things to say about specific brands and products. These authentic endorsements are often written simply because the author loved some aspect of the product or service. Sponsored But Good allows advertisers to promote great, authentic endorsements of their product or service by distributing links to these endorsements through our network.

Notably the links are placed across the network based on context, so all sites using Outbrain benefit from each advertiser where their content matches what the advertiser is promoting.

Links are served through javascript and do not pass Google rank, so there’s no attempt to game Google that some products are currently trying to do.

It’s a clever take on contextual advertising and a natural fit for a company I’ve got a lot of time for, but one I’ve always wondered how it would make money. The only question now is will advertisers embrace the idea in a tough market, and will bloggers see decent revenue for it. We’d average around 1000-2000 clicks a day from Outbrain internally (our best day this month was 6,000), so that might be 200-500 clicks on contextual ads. Not a huge number, but it all helps.