Content Recommendation Platforms Taboola and Outbrain Merge to Disrupt “Global AdTech” Ecosystem

By Sudipto Ghosh On Oct 3, 2019

Content Recommendation Platforms Taboola and Outbrain Merge to Disrupt "Global AdTech" Ecosystem

Content is nothing if it can’t be discovered. And, Content Recommendation and Discovery platforms like Taboola and Outbrain attract attention from publishers by helping them meet their audience with smart techniques.

In an major announcement reported by The Times of Israel, two online content discovery and recommendation platforms are merging to take on the duopoly of Google and Facebook advertising. Adam Singolda-led company Taboola will merge Outbrain into their operations, allowing Outbrain’s shareholders to get $250 million in cash and a 30% stake in the combined firm. The aim is to not just to multiply the revenue run-rate, but also to jointly serve native content to over 2 billion online content consumers per month.

Shaking Google’s Dominance? Not so Easy

Compared to 2018, ad spending in 2019 is slated to rise by $330 billion and above. There is a significant room to grow for others, but Google remains an unchallenged leader so far.

According to a report, Google’s ad revenue was around $116.3 billion. Currently, it generates advertising revenue through its Google Ads platform. Google Ads enables advertisers to display ads, product listings, recommended news and blogs, and service offerings across Google’s extensive walled garden ad network. Facebook advertising too enable advertisers to publish and promote content across its properties, Facebook pages, Instagram, WhatsApp Messenger, and so on.

eMarketer says that Google will remain the largest digital ad seller in the world in 2019 (31% ad spending globally). It is followed by Facebook advertising with $67.37 billion in net ad revenues, followed by China-based Alibaba, at $29.20 billion.

courtesy- eMarketer's Digital Ad Spending report 2019 — *courtesy- eMarketer’s Digital Ad Spending report 2019*

The Current State of the Ad Tech and Martech Industries

So, what’s there for the adtech audience exactly — Well, the dominance of Google Advertising remains unchallenged so far, yet the latest merged identity has all the muscle and intelligence to “OUTBRAIN” the Google and Facebook advertising landscape. The new adtech entity is evaluated at $2 billion — a proposition that provides tremendous opportunity to the employees, partners, and their joint customers.

As part of the deal, Taboola will pay Outbrain shareholders $250 million in cash and hold a 70 percent stake of the newly formed company, which will operate under the Taboola brand name. The new combined company will be headed by Taboola founder Adam Singolda. The valuation of the merged units will be around $2 billion, the statement said.

In the Israeli startup market, there was a speculation in 2017 about Taboola and Outbrain merging. However, it remained under wraps for all these months. Today, the deal has finally surfaced officially through Outbrain’s website blog.

At the time of this announcement, Adam Singolda, Founder & CEO of Taboola stated —

“Over the past decade, I’ve admired Outbrain and the innovation that Yaron Galai, Ori Lahav and the rest of the Outbrain team have brought to the marketplace. By joining forces, we’ll be able to create a more robust competitor to Facebook and Google, giving advertisers a more meaningful choice.”

In the Predictions Series 2019, Adam had specifically charged his thoughts against fake news and a deliberate victimization of ad tech platforms, specifically who serve generic content to the gullible audience. He had said, “In the last few years, we’ve recognized the danger of the proliferation of fake news on the open web and have committed to fighting for more transparency in advertising to support quality journalism. This year specifically, I think we learned that it truly takes humans to solve human problems like fake news. After creating a dedicated content policy team, which manually reviews over a million campaigns in nine different languages every month, we’ve grown the team by 57 percent.”

Will This Prove to Be The Renaissance in Ad Tech and Content Personalization

It’s a unique merger that involves two relatively well-known martech startups serving quality technology to advertisers and publishers. As a technology market, content discovery has less than 20 players. In a hugely fragmented tech space, the new identity will help Outbrain and Taboola to jointly take on the giants in the industry.

Key strategic benefits of the merger include:

Increased Advertiser Choice
Greater Advertising Efficiency
Higher Revenue and User Engagement to Publishers, Mobile Carriers and Mobile OEMs
Accelerated Innovation with Better R&D in Data Science, AI, and Personalization
Better Consumer Experience

Jointly, Taboola’s and Outbrain’s solutions are embraced directly by consumers to help them discover what’s interesting and new, at moments when they’re ready to explore.

For example, Taboola News is now embedded in over 60 million Android devices worldwide. The combined company will be able to accelerate the development of such innovative solutions, improving people’s ability to enjoy quality journalism.

Benefits of Using Content Discovery Platforms

With native content struggling to drive direct traffic from the website audience, publishers leverage Content Discovery platforms and the recommendation engine to advertise content on various third-party sites. The links are personalized to look ‘native’, but have a promotional value that attract visitors to click on them. These help advertisers to retain visitors and help publishers generate more traffic and views from their content — blogs, webpage, and videos.

Compared to Google’s Adwords, working with Outbrain or Taboola is relatively simpler. Similarity starts and ends with advertiser opening an account with them and set up a campaign.

“Almost 70% of total U.S. digital advertising revenue in 2019 is controlled by only three companies—Google, Facebook, and Amazon.” – eMarketer

Adam added, “We’re passionate about driving growth for our customers and supporting the open web, which we consider critical in a world where walled gardens are strong, and perhaps too strong. Working together, we will continue investing to better connect advertising dollars with local and national news organizations, strengthening journalism over the next decade. This is why we’re merging; this is our mission.”

The ambitious merger will drive and support combat against fake news, malvertising, and other challenging trends that have kept adtech behind.

New Identity and the Organization Restructuring

Upon closing, Adam Singolda, the Founder and current CEO of Taboola, will assume the CEO position of the combined company. Taboola will continue to operate in its original logo and name. However, it is still unclear if the new identity will be launched with a new brand name to reflect the merger of the two companies.

The Board of Directors of the combined company will consist of current Taboola and Outbrain Management and Board members. Eldad Maniv, President & COO of Taboola and David Kostman, co-CEO of Outbrain will work closely together on managing all aspects of the post-merger integration.

Yaron Galai will remain committed to the success of the combined company, and actively assist with the transition for the 12 months following the closing.

The combined company will have over 2,000 employees across 23 offices, serving over 20,000 clients in more than 50 countries across the North America, Latin America, Europe, Middle East and Asia-Pacific regions.