That space at the end of a story or a blog post is turning into a battleground, with the dominant, VC-backed players like Outbrain and Taboola fighting hard to control that publisher real estate.
But what’s more important than which over-funded advertising company will win the most space in the next year is the bigger battle over what that space is for and how online publishers adapt to the pressures of online publishing.
One might even say that what a publisher does with that space defines what kind of publication it actually is.
Jeff John Roberts of PaidContent has an excellent rundown of the big money battle over suggested content, though he largely missed the more important, long-term fight.
“Content engines” are little known to those outside the media sphere even though nearly everyone has used one – typically by clicking on a story in the “read next” or “Recommended for you” boxes that are springing up around the web. The companies, such as Outbrain and Taboola, are flush with tens of millions in investor money and are in a growing battle with each other for space on publishers’ pages.
While content engines have been around for a while, their growing presence is influencing how readers explore the web. They are also taking on a new importance as vanguards of “native advertising,” a trend that many hope will reinvigorate the online ad economy.
While Taboola, Outbrain, nRelate, my company Contextly and others are fighting for that space, it’s erroneous to label them all as “content engines”.
Taboola, for instance, isn’t about content at all.
It’s purely an advertising company with $40 million in VC money that inserts a set of ads that have no relation and often ideologically conflict with the story or post they sit underneath.
The advertisers pay Taboola per click, which the publisher gets a slice of — often in addition to a guaranteed amount of revenue for every 1K clicks. Publishers might even get a set of random links that point back to their own content, but like the ads, they have no relationship to the post they are nestled under.
It’s a simple traffic arbitrage module, as Taboola’s CEO Adam Singolda explained to Forbes:
When I started the company, I thought that we’re going after the recommendation space. Over time I realized that I was wrong, and in reality, we were disrupting the Search Marketing and Display markets.
The money can be good for publishers, but publishers don’t seem to realize that Taboola and other traffic trading companies aren’t just arbitratging their traffic, they are arbitrating their brands.
Take, for example, the suggested links on ThinkProgress, a liberal organization, which are powered by Taboola.
The links are filled with ads from the right-wing birther and Tea Party publication NewsMax. Those show up in a unit that looks like something that’s editorial, and only a canny reader will know that the “Around the Web” links are paid advertisements.
That means that ThinkProgress’s brand is being spent to validate content that’s directly in opposition to their and the vast majority of their readers’ values.
Those links also take readers to recycled stories with ever-changing datelines about how Obama is tanking the economy, how billionaires are dumping stocks and how chemotherapy makes cancer return.
To scare people into signing up for $80/year newsletters to convince them to invest their savings in gold or to dabble in “Chelation therapy” to rid themselves of heavy metal toxins — even though the FDA calls such treatments dangerous.
Another company, Content.ad is just as brazen, with ads that are clearly intended to fleece readers: How to participate in penny auctions without spending anything (right!) and how to buy an iPad for $40, among other shoddy ads. Publishers, such as Forbes, like the money, but the decision to run such ads speaks poorly of both their brand and the publications’ ethics.
(No one learns a language in 10 days, or gets an iPad for less than $40, and if you are going to have an ad to speed up a Windows PC via some overpriced “registry cleaner,” the image ought to be of a PC, not a MacBook. And that Billionaires dump stocks? Newsmax propaganda again.)
To be fair, Outbrain publicly retreated late last year from running the worst of these, and their ad quality has gone up (at the expense of profit.) That said, the company did choose to approve these kinds of ads originally and profit heavily from them — at the expense of their publisher partners’ reputation.
By contrast, Contextly has a deeper vision of what belongs in the space below a post. We believe related links out to be related and editorially controlled. Like the best deep data company in Silicon Valley – Palantir, we think that humans trump algorithms when it comes to context.
We pair those related links with algorithmically generated links to other, unrelated great content from the same publisher. We also give sites the ability to make useful sidebars in stories and promote important initiatives like conferences, subscriptions and newsletters.
That’s how you build a long-term audience – with tools that let readers dive deep or explore wide.
Publishers investigating possible choices for the space at the end of articles ought to ask their writers and editors what they think of the various options – you’ll likely get a sense of what your readers are going to think.
I don’t blame Outbrain, Taboola et. al. for looking to build a monster business on the gold mine of the attention spot at the end of an article. And any company that can profitably make money buying traffic from other sites ought to take advantage as long as they can.
But the real question is when will high-quality publishers wake up and realize they’ve turned over one of their best assets, their new homepages at the bottom of articles, to companies that don’t care at all about publishers, writers, readers or editorial quality.
When they do, they should drop us a note – we’ve got a different and singular vision for the future of publishing, one that doesn’t involve all publishing morphing into Demand Media or treating audiences as eyeballs be sold off to someone looking to fleece them with dangerous medical advice or scary visions of an economic apocalypse.