Commentary

Taboola's Planned Purchase Of Connexity Expands Menu For Publishers

Taboola last week announced plans to acquire Connexity for about $800 million in a deal that will bring several kinds of services for publishers under one roof. While Taboola pays publishers to showcase recommended content on their websites, Connexity pays publishers that drive web traffic to ecommerce sites.

Connexity, which used to be called Shopzilla, says it reaches more than 100 million shoppers monthly through publishers including Condé Nast, DotDash, Hearst, Vox Media, Meredith and News Corp Australia. It also supports the integration of more than 750 million products on publisher websites for companies such as Walmart, Wayfair, Skechers, Macy’s, eBay and Otto.
The acquisition can help Taboola to offer publishers a bigger menu of options, including native advertising for products and services. Ideally, that will help publishers to monetize more sections of their websites.
Ecommerce has become a bigger priority for media companies that seek to diversify their revenue away from advertising. Even digital ad giants like Facebook and Google have expanded their online shopping features in the past few years as they face competition from Amazon and retailers in the digital ad market.
Ecommerce also has much more room to expand within broader retailing industry. Online sales were especially strong during the first year of the pandemic, increasing their share of total retail sales in the U.S. from about 16% in 2019 to more than 21% by last year, according to estimates from Digital Commerce 360.
The U.S. digital ad market shows signs of maturing during the current decade. The growth rate is forecast to slow from 26% this year – recovering from the pandemic recession — to 11% by 2024, according to eMarketer. That deceleration suggests that digital ad sales won’t grow any faster than the broader ad market by 2030.
Publishers have already faced the erosion of ad sales in the past decade, making it more imperative they continue to develop other ways to generate revenue, including from subscriptions and ecommerce.

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