“You Might Also Like:” How Outbrain & Taboola are Cashing in Big with Content Recommendation

Sometimes there is value in what’s not there: The previously ignored white space at the bottom of articles has turned into a veritable goldmine.

Chances are by now that you’ve seen it on more than one website, and there’s an equally good chance you’ve clicked on it. We’re talking about content recommendation networks. They take related content from publishers and add content from other publishers and advertisers, essentially building a sample of similar posts that you might like. And it’s working, as the revenue keeps climbing for all parties involved.

The biggest players in the game are Outbrain and Taboola, but they’re not alone: more and more sites are attempting to level the playing field by offering a similar service.

We used SimilarWeb to get an inside look at the fierce competition between these two networks, and to see what this means for emerging content recommendation platforms.

 

Outbrain vs. Taboola: The Shared Basics

Both platforms have improved their products and sweetened the deal by offering publishers extra tools to help them optimize their homepages. And it’s a pretty sweet deal to begin with, as publishers can earn massive profits by meeting minimum traffic requirements. Plus, they earn extra payments when readers click on ad links off-site.

Taboola and Outbrain have something else in common: both have received criticism from publishers that some of these related articles from third party links are actually sources of low quality content or misleading ads. Each content recommendation network has responded in kind – Outbrain with an attempt to clean up spammy links, Taboola with a feature called “Taboola Choice” where users can vote on which content they like and don’t like.

In any case both networks continue to flourish despite these criticisms.

 

Platform Performance

At first glance, Outbrain seems to be doing better than Taboola. Throughout 2014 Outbrain grew by 31% while Taboola saw about a 43% increase in traffic.

outbrain and taboola desktop visits

 

It’s important to note that while Outbrain seems to be dominating the market, their widget works a little differently than Taboola’s. Outbrain offers readers promoted stories (paid) as well as the option to see more related stories on the publisher’s website (free content discovery). Taboola offers only promoted stories.

With that in mind, we compared the subdomains of each website to see where the majority of the cash flow is coming from.

outbrain and taboola subdomains

 

The paid traffic subdomain for Outbrain accounts for 22.8% of all incoming traffic, while for Taboola this figure is much higher at 87.83%. This also includes traffic from their API, which comprises 10.83% of all their incoming traffic. Based on these stats, it’s unsurprising that in Septemeber 2014 Taboola surpassed Outbrain in terms of paid traffic.

We also took a look at the sites within the networks to see where vendors can buy traffic.

Referrals to Taboola - Paid Traffic Subdomains

Sites of Taboola Network

 

As the data illustrates, Taboola is currently leading the way in terms of paid traffic, while Outbrain is concentrating more on big-name publishers.

Referring Traffic for Outbrain - Paid Subdomains

Sites of Outbrain Network

Global Reach

We used SimilarTech to check out which sites are using Outbrain and Taboola. We also took a look at which geographical markets were the most receptive to these content recommendation platforms.

outbrain

taboola

 

While Taboola has a much smaller portfolio of clients, their growth is enviable. Last month alone Taboola gained a net of 3,224 new clients, while Outbrain lost 271 sites.

Outbrain is establishing a global presence, with a large volume of traffic spread out across the international market. Meanwhile, Taboola is more concentrated in the US, which accounts for more than 50% of their traffic.

geographical reach

 

Based on this data, we can see that Outbrain is the more established platform by the quality and diversity of their outgoing links.

outbrain outgoing links

Buyers of Outbrain

Taboola Outgoing Links

Buyers of Taboola

 

If we take a closer look at Outbrain’s outgoing links from traffic.outbrain.com, we can see the real difference between paid and free content discovery. The free content recommendations come from both within the publisher’s site and through Outbrain’s widget. There’s more traffic circulation here, and you can see the domains of big-name publishers on the list.

outbrain free content recommendation links

 

Slowly Moving to Mobile

Taboola is moving towards mobile expansion, offering content discovery on mobile with the launch of their Taboola Backstage App for IOS.  Outbrain has yet to follow suit, instead continuing to concentrate their efforts on desktop sites.

 

What does the future hold for Content Discovery?

Content Recommendation networks like Outbrain and Taboola have paved the way for new competitors in what is clearly a lucrative market. Yahoo has just released their version, called Yahoo Recommends, and Google is purported to be working on something similar.

But while Yahoo has officially entered the market, their new platform has a long way to go before it can be seen as a viable competitor. Yahoo Recommends has just 360K clicks in comparison to content recommendation bigwigs Taboola and Outbrain, with tens of millions of clicks between them.

yahoo content recommendations

 

As others have said, content recommendation networks can be a profitable alternative to Google Adsense. This is another channel for media buyers and ppc specialists to look into in terms of revenue stream from native advertising. Investors would certainly agree, as both Outbrain and Taboola have each raised tens of millions in funding (Outbrain has raised nearly $100M total; Taboola has raised $100M in the past year alone).

Of course, not everyone is a fan of the business model – the platform has its critics. Among them are big name publishers who are refusing to use any kind of content recommendation service, citing a mix of reasons ranging from optimizing reader experience to keeping that valuable white space free of ad networks. But given the success of the two biggest content recommendation platforms so far, it’s likely that other companies will – like Yahoo and Google – be eager to partake in the  profits that this type of advertising offers.

About the Author -

Lauren Meir is a writer and the Creative Content Manager at SimilarWeb. Her expertise lies in content marketing and creative branding. She has experience writing for a variety of industries including the art world and online gaming, and her work has appeared in publications such as the Huffington Post, Provokator and the Detroit Jewish News.

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