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When it comes to battling Google, Facebook and Amazon, who command 70% of online advertising revenues, sometimes joining forces is the only option. And that’s just what Taboola and Outbrain have done. After years of hemming and hawing, the two content recommendation companies, also called native advertisers, have merged to form a single company called Taboola.
What Does The Merger Mean For Taboola And Outbrain?
According to TechCrunch, the aim of the Taboola/Outbrain merger is “to bulk up to a customer list that will now number 20,000 online properties and an audience of 2.6 billion to compete better against the likes of Facebook and Google, online advertising giants that present the biggest competitive threat to both ad tech startups and the publishers that are Taboola and Outbrain’s customers.”
Outbrain and Taboola are similar in many ways, but also have different strengths in certain areas. Recently, Taboola has been investing in video inventory, likely another angle for competing with Google-owned YouTube, and Outbrain acquired a company focused on programmatic advertising, which can work hand-in-hand with native content.
What Does The Taboola/Outbrain Merger Mean For Publishers?
Combined, Taboola and Outbrain have advertising placements with publishers including CNN, BBC, Bloomberg and USA Today, and the combined reach from the merger will offer a better chance for publishers to poach ad dollars from the dominant Google and Facebook. Media companies, many of whom still lean heavily on revenues from advertising, rely on content recommendation companies like Taboola and Outbrain to engage and monetize readers. Taboola CEO Adam Singholda, “believes the new Taboola can ’double and triple’ revenue for publishers as a bigger entity should encourage more advertisers to consider switching a portion of their search and social spend to advertising on the open web.”
While Facebook and Google can count on their own features, like YouTube or the Facebook news feed to generate ad revenue and traffic, Taboola provides publishers with native advertising content, usually tiled at the bottom of editorial content. TechCrunch points out, however, that while the merger may create more opportunities for publishers to monetize native content, the quality and “tone” of that native content could negatively impact a publisher’s own brand.
Maintaining high-quality native advertising that effectively engages audiences will need to remain a priority for publishers. Importantly, Singholda noted, driving more advertising dollars to local and national news organizations, and strengthening journalism, is a goal of the Taboola/Outbrain merger, which could provide reassurance to publishers concerned about compromised editorial.
What Does The Taboola/Outbrain Merger Mean For Advertisers?
An Outbrain blog post on the Taboola/Outbrain merger, when outlining the strategic and financial rationales for the deal, indicated the following wins for advertisers:
- Increased Advertiser Choice: Advertisers big and small will have a “meaningful competitive alternative” to the dominance of Google and Facebook (and increasingly Amazon) because of the audience reach the merger brings. Taboola’s goal of driving advertising to the open web, outside of the silos, could provide increased motivation to advertisers who may feel their advertising dollars are stuck in a rut.
- Greater Advertising Efficiency: The Taboola unified buying platform will offer efficiency to advertisers, “helping them [advertisers] reach their awareness, consideration and conversion goals” without having to log in to and manage multiple platforms
Additionally, Marketing Land points out, “the merged resources of the two companies could enable growth in ad serving capabilities, including e-commerce, AI, and video advertising,” which could allow advertisers to reach new audiences by opening up options in different publisher verticals for native content.
What Are The Benefits Of Native Advertising?
Native advertising, by mimicking the look and nature of editorial content, can feel more authentic than other advertising formats. Often formatted as content marketing, native advertising can sell more than a product, it can impart expertise to relevant audiences. Strategically placed and positioned content can lead consumers from brand awareness to loyalty, making content – and native advertising – an important part of many multichannel advertising strategies.
Update: On September 8, 2020, it was announced that the Taboola/Outbrain merger would not be moving forward.