Two major companies behind those ‘recommended content’ ads are merging

Rivals Taboola and Outbrain, who both insert “recommended content” and native advertising on digital properties, including news sites, are merging.

• Combined, the two companies will have 20,000 online properties in their portfolio, reaching an estimated 2.6 billion people.
• While the companies are billing the move as a merger, the company will take on the Taboola name.
• In addition, Taboola founder Adam Singolda is becoming CEO of the combined company.
• Outbrain investors will get $250 million in cash plus 30% share of the new venture.
• Both companies are profitable, according to Singolda and have passed $1 billion in revenue.
• There are smaller players in the space, but Taboola and Outbrain are the largest.

The companies both provide similar core solutions — inserting ads and native advertising into digital platforms, including many leading news sites.

• Taboola’s publishers include Business Insider, Bloomberg, USA Today, NBC News, The Weather Channel, MSN, CBS News and Fox — among others.
• Outbrain, meanwhile, provides recommended and native advertising to CNN, Conde Nast, The Washington Post, BBC and others.
• On most of these properties, the companies insert images and text units linking to advertiser content under headings such as “sponsored content” or “paid content.”
• Many of these modules are located near the bottom of stories, but publishers also include them on homepages and section fronts.
• Often the ads are also mixed in with links to editorial content — though they are labeled as advertising.
• These ads are often designed to match the look of how links to editorial content are shown on the site — including using the same fonts and styling.
• Some of these also mix in “recommended” content from the site or sister sites.
• News sites get a cut of the revenue generated from impressions or clicks on these ads.

This type of advertising has become increasingly popular among both publishers and advertisers.

• Advertisers like the approach because it allows them to show links to their products and services outside of the traditional banner ad format — and often mixed in with editorial content.
• For publishers, the ads are a way to generate additional revenue.
• Most of the ads in these feeds aren’t sold by the publications’ internal ad staff.
• Both Google and Facebook have taken notice, each rolling out similar products that allow publishers to embed paid recommendations or native ads into content.