The Taboola Outbrain Merger: Good or Bad for Publishers?

taboola outbrain merger oarexToday Taboola and Outbrain, the largest native exchanges in the game, announced their merger. Publishers are seemingly up in arms at the announcement, for fear that the price of native traffic acquisition will go through the roof. Industry chatter has never been too favorable, and given their negotiating leverage over pubs, we stopped buying Taboola and Outbrain invoices many months ago. That’s not to say they’re not good credits, and many of our clients still drive super high-quality traffic from them.

Taboola and Outbrain: Who Are They?

Taboola and Outbrain, known as Native Exchanges, offer content recommendation widgets, natively placed on a website page. You’ve seen these below:

They have exclusive rights with some of the biggest publishers like CNN and Fox. Based on the technology and algorithms of the native exchanges, they “recommend” content in a native manner. “Articles you might like” or “From across the web”. In the interest of being less-native and more conspicuous that an ad is being shown, many now say “Paid Content”. But the idea is the same – they recommend content at the bottom of articles. The articles being advertised on the widget come from other publishers. So publishers are cross-advertising on their sites, through one of the native exchanges, paying their cut to the exchange along the way.

Future Prediction on the Taboola Outbrain Merger

As always, I don’t think the Taboola Outbrain merger, now known as Taboolabrain, will be as bad as everyone thinks. Some may fear that the price will get jacked now because they’re basically a monopoly. But in a sense the native exchanges have always been an oligopoly of sorts between Taboola, Outbrain and RevContent. Now, Taboola and Outbrain will have more leverage over their publishers and the the market as a whole.

However price can’t go up that much even if it remains an oligopoly. Recall publishers are digital marketers by trade, and as such are extremely adaptable. Taboola-Outbrain knows this. If they raise the price too much, and the CPMs on the demand side don’t go up, then publishers will get squeezed out of native traffic and seek it from elsewhere.

Don’t Forget About RevContent

We also predict that RevContent garners market share from them. There was a big shake-up at RevContent in the last year, but it’s undeniable they’ve maintained their position as as a serious player in the content rec space. Given that many pubs are frustrated with both Taboola and Outbrain, we don’t predict that will change. As a result we believe RevContent will be in a position to win back a lot of that business.

My Thoughts In A Nutshell (Not That It Matters)

Nothing will change. Pubs that are over Taboola-Outbrain will go to RevContent. Native traffic is — and for the foreseeable future will be — a great source of traffic for publishers. But their options will surely be limited.

With Q4 right around the corner, this announcement couldn’t have come at a better time. I believe that was timed perfectly. We’re anxious to see what happens.