Yesterday Taboola announced they are acquiring ConvertMedia, an ad tech company specialising in outstream video. Here Adam Singolda, Taboola’s CEO, discusses his company’s ambitions to become one of the world’s leading players in video, the future of outstream and how publishers can reduce their dependency on the large social networks.
How does the acquisition of ConvertMedia fit into Taboola’s wider strategy?
According to Comscore we’re reaching over one billion people per month, and we record 14 to 15 billion recommendations every day, and the company is profitable with over half a billion dollars in revenue this year. Looking ahead to our future strategy and how we can provide even more value to publishers, we divide that into two parts: from a vision perspective, we plan to turn ConvertMedia into one of the largest video companies in the world. Today the main sources of quality supply are YouTube, SnapChat and Facebook, but those are all walled gardens controlled by just three companies.
If we can only get one billion of the 14 to 15 billion recommendations to become video, that means we’re serving 1 billion video views every day across thousands of publishers. Then it’s really exciting as it means you have real scale and can provide a lot of value to marketers, and hopefully share a lot of this revenue back with publishers and journalists. So in the long term we expect to become one of the top five video companies in the world.
We can also offer the best of both worlds to marketers, whether it’s sponsored content or video content at the bottom of the article. Now we will be able to integrate a video experience similar to Facebook, where sometimes the video will play on the site and sometimes it will take you away to a separate destination.
With display advertising we’ve seen prices go down due to a glut of supply as publishers have been able to over-load pages with ads. As outstream is such a convenient video option for publishers, is there a risk that pricing of supply inventory could go the same route? Or will premium publishers always be able to charge higher prices by virtue of being premium?
Historically, when the web was mostly desktop, we saw a lot of real estate being used to show ads. However, that’s all changing with mobile, where we currently see about 50 percent of our traffic coming from. If you think about a 4.5 inch screen, which is really where the web is going, I think there will be far fewer opportunities to throw ads on the page. Instead we’ll have to surface marketing messages in a seamless experience, where it’s very visible, and where we know we’re reaching the right user.
So I’m more optimistic about keeping prices high as the trend is heading towards having less advertising per page, but higher performance per ad, and as I said this will be driven by the shift to mobile.
Speaking as a user, I get the sense that Taboola ads tend to be more noticeable on desktop rather than on mobile. Do you see a noticeable difference between the two?
There is a difference but it isn’t huge. Mobile is an excellent content consumption device and people are very engaged and they’re happy to click and explore new products. I think at this stage many mobile buyers will seek out products on their phone and advertisers are becoming more sophisticated, where they can reach out to consumers to but convert afterwards on a larger screen. So we do see mobile as a lower performing part of our business, but not in a huge way.
Publishers are becoming more and more dependent on social networks as referral sources, yet at the same time many feel trapped and disenchanted. How can publishers claw back control of their traffic sources?
I think that’s a critical mission and one of the ways Taboola and ConvertMedia will be able to help is by increasing the revenue per page, and by optimising the right mix of sponsored content and video. It also means that you can become a more effective buyer of traffic, as you can promote your content elsewhere but in a way that you control.
So by increasing your monetisation, your boosting your chances of building alternatives for your audiences and in how you get audiences to your site. This is of course a step in the right direction and not a complete solution, but providing an alternative to social is key to our strategy.
Why do we see so many ad tech companies coming out of Israel?
Israel is an amazing place. I think there are three things that make it a good incubation for start-ups: firstly, the army and the military service produces kids who have experienced a lot of responsibility; secondly, it’s a country of foreigners and there’s a culture of ‘there’s nothing to lose’. We have people from all over the world living in Israel and it’s beautiful in the way we have integrated people from so many countries, and it has created a feeling that you should always take a shot and it’s okay to fail; and the third is access to capital. A lot of major VCs have offices in Israel and there is a very sophisticated Asian investor community in Israel. So those three things add to the incubation for the start-up nation.