Gil Bar-Tur founded PubPlus – an Israeli startup company that is receiving its first exposure here and that helps content sites maximize their distribution and increase profits: “Making money from content is not obscene.”
Article originally from TheMarker, July 25, 2018
The internet has been part of our lives for 30 years now – but traditional content companies have not yet found the best way through this world. Most publishers battle for their lives in the digital age, using two leading strategies: harnessing as many readers as possible to the site so that they’ll watch ads, a strategy called “Eyeballs” in the industry, or operating a payment wall on content sites.
The first strategy turns the sites into a traffic flytrap, which leads to compromise regarding the quality of content and headlines. The second strategy requires market education – users must be persuaded to pay for content on the internet that is currently provided at no cost – and that is no simple matter.
In this reality, an entire industry of startup companies has developed, such as Taboola and Outbrain that are trying to save publishers by offering content recommendations to increase browsing volume on their sites – or companies such as Playbuzz and Apester, who want to increase user involvement in content and by so doing, to keep them for as long as possible on the page. However, all these are rearguard wars.
An Israeli startup by the name of PubPlus, which we are exposing here for the first time, offers publishers a new service. The company, which was founded in 2016 by Gil Bar-Tur (then 26 years old) claims that they can measure the value of users and they promise to increase the profit (not only income) of content sites. PubPlus already has 52 workers and is an exception in the startup market, because among other things, it has not raised a single shekel from venture capital funds, and it is what is called a bootstrap – a company that has financed itself from day one.
And there is another exception – PubPlus lives according to the profit-sharing model. It offers news sites a deal like this: “Give us some of the profit that we’ll create – and no more.” Today, the company has already reached revenues of 100 million dollars a year.
The development that PubPlus offers for content sites is a platform that analyzes the performance of the site for them, and the articles that came up in real time – and so they can understand how much money each content page makes for them. “We produce maps for sites in real time, and we can tell each one if it was worth spending the money they spent on promoting a specific article or not,” Bar-Tur explains.
The data that the company analyzes for each publisher includes all the actions that the user took from the moment he or she entered the site until they left: which pages they visited, which ads they were exposed to, how long they watched the video for, what actions they performed and how much the advertiser paid for it. “Most content sites work according to the user-engagement method, not by measuring their income from them,” Bar-Tur explains. “Why do content sites look for solutions such as payment walls? Because they don’t earn from advertising. The reason is that the site becomes aggressive, and this chases users away. When content creators know how much their content is worth, and how much their audience is worth, and can find the connection between them – they can make money from it.”
While some advertising areas on a site are sold by acquiring people in the traditional way – direct sales to the advertiser, where revenues are clear – the remaining part is sold programmatically through advertising exchanges that make the sale at the moment of truth. The method works so that all advertisers make a bid, and whoever offers the highest price at the moment receives exposure to the user. However, the information regarding the revenue from the ad remains with the advertisers. Bar-Tur explains: “You know, for instance, yesterday you made 3,000 dollars from advertising, but you lack the information – from which campaign, from what kind of user, did they surf from their desktops or their mobiles, which article exactly did they read. That’s a global problem – not knowing how much the user is worth, and content providers are forced to draw conclusions about the users. They have no accurate information.”
“We started with articles about dogs and cats”
Bar-Tur served in the IDF as an officer in the Center of Encryption and Information Safety. After his discharge from the army, he worked for several years at General Electric’s cyber center, and in 2014, he founded Crunchmind, the first incarnation of PubPlus, which specialized in building content sites.
“We started by writing about dogs, cats, and everything that people like to click on. Along the way, we wanted to increase revenue from users, so we started to think about how to do it. We asked a lot of questions – how much is a user worth? What is a user anyway? Is he or she from Israel or from the United States? Is he surfing on his mobile or his desktop, in Chrome or Explorer? We approached advertisers, we collected data in one Excel table – and we obtained a distorted and non-representative picture. When we reached 100 million readers on our sites, we began to think about how to collect data in a technological way,” Bar-Tur says. “Our strength lies in technology that can identify how much each user is worth – from the moment we had the value of each user, we could point to the content worth the most money and to the audience that brings in the most money. That’s how PubPlus was born.”
The platform, as Bar-Tur explains, performs machine learning from the data it collects from the site and its advertising partners, in order to understand the worth of the audience exposed to each content page. “The first parameters are technical-demographic – from which country and city the visitors come from, which browser, device and operating system do they use, and at what time of day,” he says. “We analyze 5 million users a day, mainly from the United States, Britain and Canada. We tried to do this in Israel too, but the market isn’t big enough.”
According to estimates by the media company Zenith, global spending on online advertising in 2018 will reach 227 billion dollars. This is a huge sum that should be supporting all existing content sites, but in practice two giant companies – Google and Facebook – collect half the revenue for online advertising. The two have become an advertising duopoly, because they have built platforms that offer billions of visitors around the world a different content consumption experience, and they’re based on content produced by other companies – mainly news and entertainment creators.
In order to maximize the distribution of their content, sites are now buying “traffic” to articles, especially from Facebook, using the Boost button – a button that moves an article up to a business page on the social network and enables quick promotion of a post for payment.
However, the change made by Facebook to its algorithm earlier this year, which favors content from friends over commercial and news items, has significantly reduced the exposure of content sites on the social network’s feed. Along with the fact that content organizations now have to pay a great deal more money to promote content on Facebook, the move was a painful reminder that content organizations need to ensure that their revenue comes primarily from their own platforms – and not to rely on others. “In February, several content organizations approached us when Facebook cut them all from the feed.”
Index of Visitor Behaviors
“When you’re promoting – every article becomes a campaign,” Bar-Tur says. “For example, when promoting an article on Outbrain, Taboola or Facebook in Israel or the United States – every parameter is a separate campaign. Using PubPlus, one can see how much it cost the content body to bring the user to the campaign, and how many ads the user was shown. The bottom line is that the tool presents the return on the investment for each user.”
By so doing, the PubPlus platform turns content creators into advertisers too. It allows content creators to learn what their leading content is, to turn it into a campaign, promote it and make more money from it. The technology also knows how to indicate to the site owner which campaign isn’t profitable, so that he can stop injecting money into it and save the unnecessary expense.
“We can show the content body which article works best for it, and then tell it that its worthwhile to show it to more users – to run it as a funded campaign. We can promote it in a certain country and even adapt it to certain platforms – Yahoo, SnapChat, and so on – where it is presented differently on each. It isn’t a dirty word, to make money from content,” Bar-Tur claims.
“The content creators don’t know how to make the decision, so we built an engine from them with a profitable model.”
And how does PubPlus benefit from the tool they built? “We build profit-sharing deals, and the more the content body earns – so do we. If the content body only wants to increase the number of users, we’ll take a given percentage of the money they spend,” Bar-Tur says.
Give us an example of insights into user behavior.
“Women, for instance, click significantly more on articles showing women than men do. In addition, when we identify anomalies, we try to understand their source, to learn what has changed, what happened. We also share our insights with our customers. The idea is to build an index of different behaviors.