Native Ads Drive Revenue Growth, But Face Resistance

Adam Singolda

Despite continued resistance from media and marketing elites, native advertising may prove too lucrative to ignore.

Take video recommendation startup Taboola, which plans to reveal some financial firsts on Wednesday. The startup is now pulling in revenues at an annual run rate of $100 million, and as such, is just beginning to turn a profit.

Taboola CEO Adam Singolda attributed the company's early success to its video-first strategy, a sound technological infrastructure, and close working relationships with publishers.  

“We work hard to not be a black box on our publisher partner's sites,” Singolda said on Tuesday.

Embraced by the biggest and most distinguished media properties online, Taboola's clients include The Wall Street Journal, The New York Times, CNN, Bloomberg, Fox Television, Hearst, Gannett, USA Today, and The Hollywood Reporter.

More broadly, native ad spending surpassed $1.6 billion in 2012, according to eMarketer. Earlier this year, the research firm also predicted that the native niche would hit $2.85 billion by 2014.

Yet industry thought leaders have implored publishers and advertisers to rethink their relationships with native technology vendors like Taboola.

“Publishers should say ‘no,’ more than ‘yes’ to native,” Steve Rubel, EVP of global strategy and insights at Edelman, told attendees an the OMMA Native conference, earlier this month. “As an industry, we’re going way too fast.”

Asked who or what was most likely to derail the native ad train, Rubel fingered startups that allow for direct publishing of native advertising (like Taboola).

Viewing the world very differently, Singolda said that Taboola is “placing the user at the heart of what we do,” and pioneering a new age of content discovery.

In fact, Singolda said he sees consumers’ desire to discover fresh content -- and technology advancements -- as the real force behind native advertising.

“I think that in the following 10 years we have a real opportunity to build a new, multi-billion [model] in the advertising space, side by side to search, display and social … called discovery.”

“As a company … we have a long-term vision to build a search engine but in reverse, helping users discover content they may like and never knew about,” Singolda said.

By Singolda’s estimate, Taboola already serves 100 billion recommendations a month to 300 million consumers around the world.

Taboola also now claims to be the biggest native ad vendor, citing data from showing the number of unique users that click on paid content.

3 comments about "Native Ads Drive Revenue Growth, But Face Resistance ".
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  1. Dan Ciccone from MEDIAFICIONADO, November 20, 2013 at 11:36 a.m.

    "Singolda said he sees consumers’ desire to discover fresh content -- and technology advancements -- as the real force behind native advertising."

    This cannot be stressed enough. Too many publishers are using a bait and switch approach vs. offering content that resonates with the reader/user. The publishers that get it right will see continued growth. The publishers that blindly use native ads as an easy form of revenue will eventually see diminishing returns as users are becoming increasingly aware of its non-relevance.

  2. David Murdico from Supercool Creative, November 20, 2013 at 2:38 p.m.

    I really think Native advertising is bad for advertising... and natives:

  3. Steven Comfort from Namo Media, November 23, 2013 at 12:43 p.m.

    The idea that Steve Rubel (who has spent his entire career working for PR firms) should be the "opposition" voice in the native advertising debate is laughable.

    PR firms feel threatened by native -- one of the key roles of PR firms is to "get ink" for their clients (by feeding lazy journalists stories that include their clients). PR firms hate that their clients can now simply pay the publications to get their brand-content in front of the right audiences (instead of paying a PR firm)...

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