More publishers turn to content-recommendation networks

Outbrain is the market leader, with 4.1 percent market share and Taboola, 3.8 percent, and others like Revcontent, ZergNet and Adblade making up the long tail of the market. Taboola has been growing more aggressively, though. There’s been a 65 percent increase in the number of publishers using Taboola in the past year, compared to 34 percent for Outbrain, according to SimilarTech.

These increases have come as the economics have become too big for publishers, already hurting from declining digital display ad rates and vacillating Facebook traffic, to ignore. Content recommendation networks started a decade or so ago as a way for publishers to swap links. Then, brands and arbitrage sites started using the widgets as a paid distribution tool. Increasingly, direct response advertisers have gotten into the mix, too, using salacious links to lure readers back to e-commerce pages.

The host publishers get paid every time a reader views or clicks one of the links in the box, so while they have control over the quality dials of the widgets, the more people click, the more money they make. Plus, some are paid guaranteed fees by the content recommendation companies to run their widgets. (Publishers still use the suggestion platforms to recirculate their own articles, too.)

“If you look at it right now, the revenue guarantee they’re giving are just too attractive to turn down,” said Edward Kim, the CEO of SimpleReach, which measures content performance and distribution. “When you’re talking about millions of dollars it’s hard to say no, especially when you’re bleeding money in other areas. And monetizing mobile is really hard. This is just waiting for them with a check in hand.”

But with the financial incentives that suggestion platforms offer publishers to get people to click off their own sites, it’s no surprise that some publishers can’t resist running article recommendation boxes. More than 150 large publishers are running more than one company’s at once, including TMZ (which carries Outbrain and Taboola), Reuters and Fox News, according to SimilarTech.

“We’ll run into certain agencies who’ll say, ‘I need to make certain it’s an in-feed rather than an end-of-article experience,’”said Patrick Keane, president of Sharethrough. “We’ve conditioned generations of users to think that’s where to expect terrible content farm articles at the end of an ad. It start to bleed in the experience of advertisers.”