With Acquisition, Taboola Aims to Marry Content and Commerce. Will It Work?

Taboola CEO Adam Singolda wants to help make publishers “an Amazon in their culture.”

How? By helping publishers monetize the full article page and pumping internal traffic to the articles that are driving the most value to advertisers.

You probably know Taboola from its ubiquitous “discovery” widget, which lives on the bottom of article pages of sites like POLITICO and TIME. With the acquisition of Perfect Market, a software company focused on ad optimization, Taboola plans to introduce dynamic product and services recommendations to areas of the page previously occupied by low-impact text advertising, such as the right rail and top of page.

They’re calling it “Taboola-X” and betting the same algorithm that made its content recommendations a success will serve up products people actually want to click on and buy. Based on a number of factors—such as a user’s behavioral history or device type—Singolda said Taboola’s algorithm will decide whether to serve a reader with a product recommendation or a piece of paid content in this new real estate.

In Singolda’s view, a publisher like TechCrunch that runs, for example, an article comparing iPhones and Samsungs, will likely drive thousands of iPhone sales each year, and they should be empowered to better monetize that influence. He thinks publishers have an inherent right to a share of the sales their content drives and promised that with Taboola-X, “Publishers will absolutely get a share of that in the form of a higher ROI/eCPM than what they’re getting today.”

Singolda also noted publishers could maximize their CPM value by directing internal traffic to articles that were monetizing at a high rate, via Taboola’s content recommendations.

This probably sounds great to the business department of any publishers—and to the business side of Taboola, which announced it’s on pace for $250 million annual revenue—but are blatant product recommendations a risk on the editorial side? Will readers distrust an article comparing the iPhone and Samsung Galaxy when there’s a big recommendation on the side?

In response to those issues, Singolda said publishers could exclude certain products from being recommended for certain articles and reiterated he doesn’t anticipate a problem, since publisher credibility is a challenge that’s already been tackled in the programmatic trade.

And it’s worth noting that product recommendations won’t infiltrate Taboola’s discovery widget at the bottom of article pages. Singolda wants to avoid that overload since readers are in a “content consumption mindset” when viewing that widget. As a result, paid content is more effective in that space.

In addition, there’s one group that should be seriously intrigued: brand publishers. Though consumer trust in branded content plummets when that content is self-promotional, display ads don’t have the same effect. Readers of branded content get that you’re selling something at the end of the day, and Taboola-X may provide a way to present whatever you’re selling on the page a little more effectively.

But for now, Singolda’s primary focus is selling Taboola-X to traditional publishers. “Our job here to increase the value of content, report that data back to newsrooms, and circulate [content using] that data,” he said. “If you have the opportunity to get into the iPhone market, you should.”