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Oct. 3, 2019, 12:47 p.m.

A merger of chumbox-mongers might leave publishers a little bit poorer (and their websites a little less revolting)

“Gut doctor: ‘I Beg American Publishers To Throw Out This Ad Unit Now!'”

I had an idea for a joke website once. It was about at all the gross, exploitative, soul-debasing ads you see at the bottom of news articles or tucked into sidebars on a lot of sites. The headline was going to be the very clickbaity “YOU WON’T BELIEVE WHAT THESE 1990s STARS LOOK LIKE TODAY.” But instead of a 71-photo slideshow of unflattering pics of Jenna von Oy, clicking through would take you to a bunch of red giants and white dwarfs taken by the Hubble Space Telescope, each followed by a more recent image. 1990s stars, get it? Hardy-har-har! Take that, curiosity gap!

Those rows of vaguely nauseating boxes are, if you believe the companies that make them, a tool to let “people discover content, products and services that may be of interest to them,” sparking over 250 billion “monthly discoveries”! They “find and engage over one billion relevant users across premium publishers at massive scale on the world leading native discovery platform,” creating “meaningful engagements” and “unique and relevant ad experiences.”

The better term for them is chumboxes. They take their name from the angling strategy of throwing a bunch of chopped up dead fish parts — blood, bone, gristle, any other leftover waste products — into the water to attracting bigger living fish to reel in. It’s #content to put next to content, relying on its human prey’s basest, most animalistic instincts in its hunt for clicks.

(The term “chumbox,” which is wonderful, was first popularized in this 2015 Awl piece by John Mahoney, though there is some evidence that the term predates it. This 2014 Alene Vincent tweet is the earliest reference I can find online to this usage. “Chumbox” coiner: Step forward and accept your laurels from a grateful online public.)

Chumboxes have been the target of Internet derision as long as they’ve been around — because they put unwanted viscera in front of our eyeballs, because they often play on the worst human biases, and because they, maddeningly, have long found a home on some of the most esteemed and prestigious news sites in the world. Why would a quality publisher, one trying to catalyze its brand equity into ad and subscription dollars, sully its pages with this dreck — diseased skin, vegetables that look like diseased skin, pasta that looks like worms, racial stereotypes, teased nipslips, brain pills, bikinis, toenail fungus, meat left out too long, erection supplements, BUY GOLD NOW, household objects that cause cancer, household objects that cure cancer, and bitcoin?

The reason publishers, even ones that care a lot about their image, put chumboxes on their webpages is blissfully straightforward: money. (It’d be worse if it was some industry-wide fascination with deformed vegetables, right?) The two leading companies in this space, Taboola and Outbrain, go around to publishers and offer them a lot of money — often paid upfront — in exchange for that digital real estate. I’ve spoken to lots of business-side digital media people over the years, and their consistent explanation has been: We know it’s gross, but it’s actually a lot of money. And it’s reliable money, at least compared to the vicissitudes of all the other digital advertising they try to sell.

So, thanks to publishers’ never-ending quest for reliable revenue, we’ve ended up with bizarre situations like stories decrying a particular chumbox ad being immediately followed by that exact same chumbox ad, a statement with its own retort.

All that takes us to today’s news that the industry’s two giants, Taboola and Outbrain, are merging after years of talks:

The aim: to bulk up to a customer list that will now number 20,000 online properties and an audience of 2.6 billion to compete better against the likes of Facebook and Google, online advertising giants that present the biggest competitive threat to both adtech startups and the publishers who are Taboola and Outbrain’s customers.

The two companies, both founded out of Israel but headquartered in New York, describe the deal as a merger, but the combined entity will be called Taboola, with Taboola’s founder Adam Singolda securing the CEO slot. Further, Taboola is paying Outbrain investors $250 million in cash plus a 30% share of the combined companies. The merger is creating a company that will be valued at $2 billion, making the transaction value of this deal $850 million.

[…]

Between Taboola and Outbrain, the companies now have ties to a list of the biggest online media properties around today — with the combined group now working with CNBC, NBC News, USA TODAY, BILD, Sankei, Huffington Post, Microsoft, Business Insider, The Independent, El Mundo, Le Figaro, CNN, BBC, The Washington Post, The Guardian, Spiegel Online, El País and Sky News.

Taboola and Outbrain have positioned themselves as something of the last chance saloon for media companies that have continued to base all or at least some part of their business models on advertising.

Whatever else you think of these companies, reducing the competitive set from two to one will likely mean less money for publishers. No longer will a news site be able to push Outbrain to match Taboola’s offer, or vice versa. Those upfront payments will probably get smaller.

On one hand, that’s bad news. Publishers need all the money they can get! But on the other, perhaps making these deals a bit less attractive might lead some publishers to consider the reputational damage they do themselves when they give over prime real estate to elephantiasis clickbait. Especially at a time when publishers are relying less on ad dollars and more on revenue direct from readers, removing the yuck barnacled to their brand might have a return of its own.

Photo of koi feeding in a frenzy at the Buenos Aires Zoo by Beatrice Murch under a Creative Commons license.

POSTED     Oct. 3, 2019, 12:47 p.m.
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