Expert View is a new regular series where industry experts give their take on significant market developments. Today, one of our industry’s most experienced and informed experts, Tau Co-Founder Robert Webster, explores the recently-completed acquisition of Teads by Outbrain.
At first glance, Outbrain’s acquisition of Teads looks like a textbook case of synergy. The industry narrative has focused on full-funnel capabilities, scale advantages, and reducing fragmentation, making the combined entity more competitive against the digital ad giants.
More than anything, it strengthens Outbrain’s position against its key rival, Taboola, by allowing it to offer both performance-native and premium video ad formats in a single ecosystem. But does the reality live up to the pitch?
Where the acquisition makes sense: the sell-side opportunity
The strongest rationale for this deal lies with publishers. Bringing Teads and Outbrain together provides them with more flexible and diversified monetisation options:
- Upper-funnel, premium video formats from Teads.
- Mid- and lower-funnel native units from Outbrain.
- Greater control over yield management, allowing publishers to optimise revenue across branding and performance.
This is a smart defensive move against Taboola, which has positioned itself as a comprehensive publisher monetisation partner. If Outbrain executes well, this could genuinely improve its publisher relationships and create a more compelling alternative to both Taboola and Google’s ad stack.
The challenge on the buy-side
While the sell-side benefits are obvious, the buy-side story is much more complicated.
Outbrain and Teads serve distinctly different advertiser bases: Outbrain thrives on performance advertising. Its clients are mostly direct-response brands, ecommerce players, and lead generators optimising for CPC-driven conversions. Teads is built for premium brand advertisers. It caters to agencies and global brands running awareness and engagement campaigns on a CPM model.
The crossover is minimal. Performance advertisers who favour Outbrain aren’t suddenly going to pivot to upper-funnel video, while Teads’ brand-first clientele aren’t going to see Outbrain as a natural extension of their media plans.
Reputation risk for Teads
One of Teads’ strongest value propositions has been its premium, brand-safe environments. Outbrain, on the other hand, operates in a lower-yield, CPC-driven space. If the two are not integrated carefully, there is a genuine risk that Teads could see its premium perception eroded. Brand advertisers don’t want their high-impact video ads sitting alongside low-cost clickbait.
Programmatic vs. walled garden buying
Another major challenge is the buying infrastructure:. Teads is deeply programmatic, selling most of its inventory through DSPs like DV360 and The Trade Desk. Outbrain operates more as a closed platform, where buyers purchase inventory directly.
These are fundamentally different sales models, making it difficult to generate buy-side synergies. Unlike Taboola, which has integrated its native ad formats into The Trade Desk, Outbrain has never fully embraced programmatic distribution. Unless Outbrain significantly expands its programmatic capabilities, Teads may continue operating as an independent unit rather than an integrated buy-side offering.
Lessons from Zemanta.
Outbrain’s attempt to enter the programmatic space with Zemanta, the DSP it acquired in 2017, was underwhelming. The ambition was to make Outbrain’s native ad inventory available through programmatic channels, but it never gained real traction. If Outbrain struggled to integrate Zemanta, will it be any more successful in merging Teads’ programmatic expertise into its ecosystem?
Taboola has taken a more measured approach to buy-side expansion: Integrated with The Trade Desk, allowing native ad buys through a major DSP. Positioned itself as an alternative to Google Display Network, making it a natural choice for programmatic buyers. Kept its focus on performance-driven advertising, without overreaching into high-end brand formats.
By contrast, Outbrain’s move with Teads looks less like a natural buy-side expansion and more like a bundling of two separate offerings. If the two platforms remain disconnected on the demand side, this acquisition risks being an inventory play rather than a true strategic step forward.
A strong sell-side case, but a risky buy-side bet
In the end, this deal makes perfect sense for publishers, who gain more monetisation options and revenue flexibility. But for advertisers, the path forward is far less certain.
- For publishers, this is a win—a broader ad stack means better control over yield and stronger alternatives to Taboola and Google.
- For advertisers, the integration is unclear—performance-native buyers and premium video buyers operate in separate ecosystems, and there’s a risk of brand perception issues.
The success of this acquisition will depend on whether Outbrain can genuinely merge these platforms into a stronger, more cohesive buy-side offering. If they get it right, it could position them as a real alternative to Google and Taboola. If they get it wrong, it risks becoming a mismatched collection of assets rather than a unified powerhouse.
From an investor perspective, the move has clear appeal in the short term.
The acquisition should boost EBITDA by increasing scale and providing more monetisation options, particularly on the supply side. A larger footprint in digital advertising could also help Outbrain improve its bargaining power with publishers and advertisers alike. However, the real question is whether this acquisition is enough to drive sustained revenue growth rather than just cost efficiencies.
Given Outbrain’s history with previous expansions—most notably, its mixed success with Zemanta—some investors may be cautious.
The stock may see an initial boost, but whether this is a long-term buying opportunity depends on Outbrain’s ability to execute a true full-funnel strategy without alienating key advertisers. For now, while the financials may look attractive, a wait-and-see approach seems warranted before calling this a transformational deal.
