Native ads coming to TV screens: why Outbrain is buying vi for £55million

Recommendation engines are evolving from publisher websites and onto CTV, as advertisers seek more measurable (and cookieless) ways of reaching the Netflix generation.

This week, native ad giant Outbrain bought video intelligence AG (vi), a Swiss-based contextual video technology platform for digital and Connected TV media owners for the hefty price tag of $55million.

The purchase, Outbrain’s first since its July IPO, is aimed at boosting its video offering for media owners and advertisers. 

Integrating the new tech from vi will give Outbrain the ability to combine contextually matched content and in-stream video advertising for desktop and mobile.

Perhaps most significantly, vi is also developing a CTV solution, with the company establishing partnerships with Pluto TV, Rakuten TV and Samsung TV Plus, giving Outbrain access to a lucrative new market of sofa-based viewers. 

Taking native ads to new frontiers

The native advertising market has expanded rapidly in recent years, led by Outbrain and its rival Taboola. Both companies went public this year on the back of rapid growth, now seeking out new platforms to take their contextual advertising models further as the traditional cookie-based platform declines. 

Notably, Taboola’s most recent acquisition was Connexity, an operator in the e-commerce media space. 

Yaron Galai, Co-Founder and Co-CEO at Outbrain, says: “The combination with vi will allow us to deepen our partnership with media owners, providing mid- and top-of-article video solutions. It will also expand our addressable market, introducing high-quality in-stream video inventory to support our brand advertisers.” 

vi’s contextual and machine learning technology matches media owners to advertisers with relevant video content and articles. Crucially, the service is cookieless by design. 

The company works with more than 1100 media owners around the world, including IDG, Der Spiegel and Funke. 

David Kostman, Co-CEO of Outbrain, adds: “vi fits perfectly into Outbrain’s core strategy of providing media owners with technology to enhance user engagement and monetisation through relevant content and ads.” 

Outbrain will acquire vi for an aggregate purchase price of approximately $55 million, funded by $46.75 million of balance sheet cash and 412,500 Outbrain shares. The transaction is expected to close in the first quarter of 2022 and is expected to be accretive in the first year. Progress Partners acted as exclusive M&A financial advisor to vi. 

Kai Henniges, co-founder and CEO of vi, said: “Our years of video expertise and unique offering for publishers and CTV providers are a perfect addition to Outbrain’s leading market position and premium global media owner partnerships. Together we will accelerate our mission to inspire, inform and entertain users by putting video in context. We believe we have found a great match between our companies’ cultures and we share the same vision of the future of media.”