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<p>Hi and welcome to Insider <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">Advertising</keyword> for June 3. I'm deputy editor Lucia Moses, filling in for Lauren Johnson, and here's what's going on:</p><ul><li><a href="https://www.businessinsider.com/google-toughens-up-android-ad-tracking-google-play-2021-6">Google toughens up on ad tracking.</a></li><li><a href="https://www.businessinsider.com/speculation-about-future-of-execs-at-discovery-warnermedia-venture-2021-5">Revcontent acquired.</a></li><li><a href="https://www.businessinsider.com/12-fastest-growing-dtc-food-brands-2021-5">Edelman leadership shakeup</a>.</li></ul><p>If this email was forwarded to you, <a href="http://newsletter.businessinsider.com/join/4np/insider-advertising&amp;hash=7b80d46ae169287dfc6c392039d198579857">sign up here for your daily insider's guide to advertising and media.</a></p><p><em>Tips, comments, suggestions? Drop me a line at <a href="mailto:lmoses@insider.com">lmoses@insider.com</a> or on Twitter at <a href="https://twitter.com/lmoses">@lmoses.</a></em></p><p><a href="https://www.businessinsider.com/google-toughens-up-android-ad-tracking-google-play-2021-6"></a></p><h3><a href="https://www.businessinsider.com/google-toughens-up-android-ad-tracking-google-play-2021-6">Google is toughening up on Android ad tracking but won't yet go as far as Apple's radical changes</a></h3><ul><li><a href="https://www.businessinsider.com/google-toughens-up-android-ad-tracking-google-play-2021-6">Google is making it harder for app developers to access information about Android users</a> who ask not to be tracked across their devices, Hugh Langley and Ryan Joe report.</li><li><keyword id="6355629" type="DEFINITION" weightage="60" keywordseo="google">Google</keyword> is under pressure from privacy advocates and regulators to scoop up less information about its users but also needs to keep its huge ad business growing.</li><li>That pressure has resulted in delicate compromises that contrast with a firmer approach from archrival Apple. </li></ul><h3><a href="https://www.businessinsider.com/google-toughens-up-android-ad-tracking-google-play-2021-6">Read the story.</a></h3><p><a href="https://www.businessinsider.com/star-mountain-capital-capital-dynamics-acquire-revcontent-2021-6"><div type="image" title="richard marques" height="1152" width="1536" msid="83192565" hostid="261"></div></a></p><h3><a href="https://www.businessinsider.com/star-mountain-capital-capital-dynamics-acquire-revcontent-2021-6">Content-recommendation company Revcontent has been acquired by a duo of asset-management firms as rivals Taboola and Outbrain prime themselves to go public</a></h3><ul><li><a href="https://www.businessinsider.com/star-mountain-capital-capital-dynamics-acquire-revcontent-2021-6">The Taboola and Outbrain rival that serves "content-recommendation" widgets on publisher webpages was acquired</a> by asset-management firms Star Mountain Capital and Capital Dynamics, Lara O'Reilly reports.</li><li>The company plans to use its new capital to expand internationally, invest in its product, and explore potential acquisitions.</li><li>It also hopes to capitalize on content recommendation companies' reputation for serving low-quality ads.</li></ul><h3><a href="https://www.businessinsider.com/star-mountain-capital-capital-dynamics-acquire-revcontent-2021-6">Read the story.</a></h3><h3><a href="https://www.businessinsider.com/edelman-shakes-up-us-leadership-after-naming-lisa-ross-ceo-2021-6"><div type="image" title="Lisa Ross" height="593" width="791" msid="83192566" hostid="261"></div></a></h3><h3><a href="https://www.businessinsider.com/edelman-shakes-up-us-leadership-after-naming-lisa-ross-ceo-2021-6">Public relations giant Edelman is shaking up its leadership as it tries to position itself as the top crisis and social issues agency</a></h3><ul><li><a href="https://www.businessinsider.com/edelman-shakes-up-us-leadership-after-naming-lisa-ross-ceo-2021-6">New US CEO Lisa Ross is shaking up the PR giant's leadership</a> to gain an edge in crisis management and social issues-related work, Sean Czarnecki reports.</li><li>She's combining <keyword id="220093" type="COMPANY" weightage="60" keywordseo="Edelman">Edelman</keyword>'s brand and corporate divisions to stand out from firms like Sard Verbinnen &amp; Co. and Porter Novelli that are known, respectively, for crisis and purpose-related PR.</li><li>She's also elevated execs to focus on tech and diversity.</li></ul><h3><a href="https://www.businessinsider.com/edelman-shakes-up-us-leadership-after-naming-lisa-ross-ceo-2021-6">Read the story.</a></h3><h3>Other stories we're reading:</h3><ul><li><a href="https://www.businessinsider.com/dentons-communications-consulting-madeleine-albright-private-equity-2021-5">Mega law firm Dentons wants to build a top-flight consulting business, and it just signed a deal to launch a new standalone firm</a> (Insider)</li><li><a href="https://www.cnbc.com/2021/06/02/trump-blog-page-shuts-down-for-good.html">Trump blog page shuts down for good</a> (CNBC)</li><li><a href="https://www.businessinsider.com/livexlive-appears-to-receive-cease-and-desist-from-tiktok-for-boxing-event-2021-6">An influencer boxing event pitting TikTokers against YouTubers has received a cease and desist email, apparently from TikTok's parent company</a> (Insider)</li><li><a href="https://www.vanityfair.com/news/2021/06/will-gawkers-swashbuckling-style-survive-upcoming-relaunch">"Nostalgia Is a Hell of a Drug": Will Gawker's Swashbuckling Style Survive Upcoming Relaunch?</a> (Vanity Fair)</li><li><a href="https://www.businessinsider.com/dtc-sneaker-rothys-to-double-business-with-mens-shoes-2021-6">Rothy's CEO reveals how the sustainable-shoe startup plans to double sales by entering the men's market after adding a half-million new customers in 2020</a> (Insider)</li></ul><p><em>Thanks for reading and see you tomorrow. You can reach me in the meantime at <a href="mailto:lmoses@insider.com">lmoses@insider.com</a> and subscribe to this daily email <a href="http://newsletter.businessinsider.com/join/4np/insider-advertising&amp;hash=7b80d46ae169287dfc6c392039d198579857">here</a>.</em> </p>

Google toughens its stance on ad tracking

<ul class="summary-list"><li><strong>Online ads are appearing from brands with names like Safe Mask, Viral Tech Mask, and Flu Mask Store that have popped up overnight and</strong> claim to protect against coronavirus.</li><li><strong>Business Insider made numerous attempts to contact six companies advertising face masks but got no response</strong><strong>. One company listed a phone number for a customer service firm that claimed to not work with the vendor.</strong></li><li><strong>Google, Facebook, and digital firms like Revcontent are trying to curb face such mask ads, in the latest example of how digital publishers and adtech firms struggle to police questionable advertisers.</strong></li><li><strong><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</strong></li></ul><p>As concerns grow about the spread of the novel coronavirus, Google, Facebook, and other digital ad sellers are scrambling to crack down on ads for products that claim to protect people from the scare even as <a href="https://www.businessinsider.com/wuhan-coronavirus-face-masks-not-entirely-effective-2020-1">experts say masks won't do much to protect you.</a></p><p>Ads for face masks that claim to protect people from the virus have popped up on Google, Facebook and publisher sites over the past couple of weeks. Behind the ads are sellers that have seemingly popped up overnight and have opaque contact information and customer service channels.</p><p>Business Insider found ads from five different companies running mobile and search ads with Google that promote face masks with urgent pitches like "buy now." The advertisers - Best Dang Stuff, Ziqi Goods, Sea-North, Flu Mask Store, and Viral Tech Mask - link to websites that sell face mask products with limited information about the companies. A sixth company, called Safe Mask, ran an ad campaign through Revcontent, which distributes sponsored content ads on publishers' sites, that appeared on USAToday.com.</p><p>Business Insider made numerous attempts to reach each company through emails and phone calls but got no response.</p><p>In the case of Safe Mask, it listed a company called Strong Current Enterprise for customer service inquiries. A representative for Strong Current Enterprise told Business Insider that the company does not work with Safe Mask. Eighty-two complaints about Strong Current Enterprise <a href="https://www.bbb.org/us/ny/buffalo/profile/tv-and-radio-repair/strong-current-enterprises-ltd-0041-235989124/complaints">are filed with the Better Business Bureau,</a> and the company did not reply to a follow-up email from Business Insider seeking more information.</p><p>Another company, Flu Mask Store, created its website earlier this year and uses Shopify to run its e-commerce features. A Shopify spokesperson did not respond to a question about the firm's policies for businesses that sell coronavirus-related items.</p><p>New York City is <a href="https://www.businessinsider.com/businesses-selling-masks-ridiculous-prices-nyc-says-no-more-2020-3">cracking down on businesses</a> that price gouge face masks, fining businesses up to $500. EBay and Amazon are also monitoring the prices and marketing for face masks.</p><h2>Marketers continue to struggle with rogue advertisers</h2><p>Face mask advertising is the latest example of the digital ad industry's ongoing struggles to police and stamp out fake and questionable material.</p><p>On Monday, Google said it was <a href="https://www.businessinsider.com/google-bans-ads-for-medical-masks-that-capitalize-on-coronavirus-2020-3">revising its policy about coronavirus</a> to include face mask ads after Business Insider flagged several ads to the company that featured products like medical face masks.</p><p>"We're committed to protecting users and surfacing helpful, authoritative information as the coronavirus situation continues to evolve," said a Google spokesperson.</p><p>Facebook has also <a href="https://www.businessinsider.com/facebook-corona-virus-cracks-down-ads-2020-2">said it would ban</a> ads that promise to cure or prevent the virus, or attempt to "create a sense of urgency" about it.</p><p>Revcontent pulled the Safe Mask ad after an inquiry from Business Insider. Revcontent also said that it was manually removing content about the coronavirus from its network of content, citing a policy against "unsubstantiated health claims and ads attempting to incite panic or disseminate harmful, misleading content about the virus."</p><p>While publishers have gotten better at policing ads that pass through digital middlemen, ads from questionable advertisers as well as fraud and bots persist. Adtech firm Integral Ad Science <a href="https://integralads.com/news/bot-scheme-404bot-adstxt-threat-lab/">recently identified</a> a bot scheme called the 404bot that digs into unaudited ads.txt files to boost clicks and create fake URLs, costing publishers $15 million in lost ad revenue.</p><p>In the case of face mask ads, Augustine Fou, an independent ad fraud researcher and consultant, said the ads likely pass through automatic ad systems because the ads are often vetted for the text they contain but not the image.</p><p>"Despite some new technologies that try to scan the code of every single ad, some still get through," he said.</p><p class="tagline">Get the latest Google stock price<a href="http://markets.businessinsider.com/stock/GOOG-Quote"> here.</a></p>

Face mask ads claiming to protect against coronavirus are popping up all over Google and Facebook, and the platforms are scrambling to stamp them out

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Taboola</span></p><p class="caption">Taboola wants to crack down on "racy" ads, like these on MetalSucks.net.</p></div><p></p></div></div></p><ul><li><strong>Ad-tech companies such as Taboola, Outbrain, and RevContent, which deliver so-called content recommendations, are working out how to deal with sexually suggestive ads.</strong></li><li><strong>RevContent recently moved to ban certain images, while Taboola says it's about to kick off an effort to clean up its network, with help from its users.</strong></li><li><strong>Some publishers don't always know what content is being recommended on their sites, while others take efforts to do some filtering.</strong></li><li><strong>Still, it's hard for web publisher to turn down revenue given the challenges facing the <keyword id="6354777" type="COMPANY" weightage="60" keywordseo="Media">media</keyword> industry.</strong></li></ul><p>It has long been accepted in <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">advertising</keyword> that sex sells. But at a time when workplace mores and casual attitudes toward sexism are being reexamined, some publishers and advertisers are asking whether the internet needs to clean up its act.</p><p>Specifically, the use of sexually suggestive images delivered through content-recommendation companies such as Taboola and Outbrain have been flagged by some ad-industry insiders.</p><p><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><p class="source"><span>Mens Fitness</span></p><p class="caption">Racy ads that appeared on Men's Fitness.</p></div><p></p></div></div></p><p>These ad modules are ubiquitous online, even if Taboola and Outbrain aren't household names. Almost every web user has probably encountered the collections of web links and accompanying photos near the bottom of articles - promising shocking photos of shark attacks, D-list celebrities, or dramatic weight loss.</p><p>They're not always racy, but publishers don't always have much if any control over what stories or ads get touted in these boxes. You can find content-recommendation modules on sites including CNN.com and Wired.com. Business Insider also runs them. Often they are labeled at "suggested stories" or "sponsored posts" or "stories you may be interested in."</p><p>They're there because the content-recommendation companies pay publications to carry these modules. Smaller sites can make a few hundred bucks from these deals, while large publishers can earn millions or more each year.</p><p>And at a time when Google and Facebook are slurping up the majority of digital ad spending, most web publishers are happy to pull in any extra revenue.</p><p>Often these modules push the envelope in terms of imagery and what sort of content may be available once you click. Now, the companies behind these recommendations are vowing to make changes, with RevContent saying it's banning certain images and Taboola about to kick off an effort to clean up its network with help from its users.</p><p>"Obviously the world is moving to consider more things to be racy and sexist," Yaron Galai, cofounder and CEO of Outbrain, said. "I'm not sure whether this is just good PR or what, but in the past many publishers were happy to get a check. Now, whether it's fake news, MeToo, all of them are coming together. It's not about a check; it's about a trustworthy on-brand experience."</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>New York Daily News</span></p><p class="caption">Taboola ads appearing on New York Daily News.</p></div><p></p></div></div></p><h2>Digital advertising may need to change in the #MeToo era</h2><p>Galai at Outbrain said his company has always pushed for strict content guidelines. Here are Outbrain's rules on "adult" content.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Outbrain</span></p><p class="caption">Outbrain prohibits certain ad types.</p></div><p></p></div></div></p><p>"We've been at the forefront on this," he told Business Insider. "Our currency is user trust. Finally, the market is coming around on this. It's something we've been really focused on."</p><p>Galai said that Outbrain has over 5 million links in its system in a given month. And that's after 50% get rejected upfront for violating the company's standards.</p><p>But it's very tough to police what ads run where. "We're not 100% perfect, but squash it as soon as we identify [a link that breaks our rules.]"</p><h2>Facebook isn't immune</h2><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Facebook</span></p><p class="caption">Facebook ads that have been banned.</p></div><p></p></div></div></p><p>Such sexually suggestive ads aren't just on the open web. They pop up on Facebook too.</p><p>After being alerted by Business Insider about several racy links, Facebook took the ads in question down. "These ads violate our ads policies under our policy for adult content and have been removed," a Facebook spokeswoman said.</p><p>Some see an industry that is pushing questionable content that is out of step with the #MeToo era. Other see these companies looking to exploit that movement.</p><p>Recently, the Taboola-competitor RevContent issued a news release stating a new policy that will "eliminate use of all sexually objectifying and explicit content."</p><p>The company said it was basing its standards on <a href="https://globenewswire.com/news-release/2018/03/08/1418730/0/en/Revcontent-Receives-Endorsement-from-National-Center-on-Sexual-Exploitation-by-Banning-all-Sexually-Explicit-Content.html">guidelines provided by the National Center on Sexual Exploitation</a>.</p><p>Meanwhile, Taboola's founder and CEO, Adam Singolda, told Business Insider that since early 2017 the company has reviewed all its paid content manually and automatically and that a million different URLs are screened each month.</p><p>Initially, that 30-person group has focused on cracking down on deceptive ads and <a href="https://www.mediapost.com/publications/article/289905/taboola-takes-on-fake-news-furor.html%23reply&amp;source=gmail&amp;ust=1480539329173000&amp;usg=AFQjCNFVlE59EQpaq4h4e9VLRSuEaPEevQ">fake news</a>. More recently it's banned cryptocurrency ads. And starting in the second quarter of this year, Taboola is planning to block out what it deems "racy" ads. It's adding more than a dozen new members to its review team.</p><p>Of course that's complicated, because one person's definition of too sexy for your computer can be very different from another's. Standards on sexually charged content vary widely, particularly across the globe, Singolda said.</p><p>Outbrain's Galai concurred. He has teams in Israel, India, and the US scanning paid links, and they don't always agree. "It's more of a nuanced thing," he said.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Daily News</span></p><p class="caption">From the New York Daily News.</p></div><p></p></div></div></p><p>That's true in the US too. "On Sports Illustrated, for example, bikinis may be OK. But on Time.com maybe not."</p><p>For its cleanup efforts, Taboola is asking for the community's help. People can click on a tab on Taboola ads and rate them for being "deceptive" and racy using a module called <a href="http://www.businessinsider.com/taboola-increases-content-transparency-for-millions-of-users-2013-10">Taboola Choice</a>. It has already removed 100,000 sites from its customer base, which makes a small percentage of its overall advertiser base, Singolda said.</p><p>Some mainstream publishers that use celebrity images will be categorized by Taboola as "gossip," while other, less legitimate news publications will be blocked for images that cross the line.</p><p>"It's going to cost us millions of dollars," Singolda said. But it's worth it, he says. <a href="http://www.businessinsider.com/despite-frequent-criticism-the-israeli-ad-tech-company-taboolas-revenue-is-skyrocketing-2018-3">Taboola is bringing in $1 billion a year,</a> and the loss of a few million dollars won't bury the company.</p><p>"We need the open web to thrive, so that all publishers can make money," he said.</p><p>Of course money is the main reason that most publishers feature content-recommendation tools. Yet publishers only know so much about what content-recommendation ads run on their site at a given moment.</p><ul><li>Sometimes Taboola or Outbrain recommends users check out more of that publication's own content.</li><li>Sometimes people see content from other publications or from mainstream advertisers.</li><li>And then sometimes people see sensational headlines and images from no-name publications looking for clicks.</li></ul><p>According to a New York Magazine spokeswoman, Taboola does offer the company "a measure of control in terms of the content that's surfaced on our site." That includes the option to block specific ads or pieces of content if the publication receives complaints. The New York Daily News did not respond to requests for comment.</p><p>But other publishers say they have less awareness.</p><p>"Since the ads a user sees are tailored to their individual browsing habits, we simply can't see everything that runs on our site," said Ben Umanov, of Blast Beat Network which represents publications like the music-centric<a href="http://www.metalsucks.net/"> MetalSucks.net</a>. "If a user brings a complaint to us about a particular ad, we review it and ask the network to remove it from our queue if we find it to be objectionable."</p><p>A Men's Fitness spokesperson added: "American Media Inc. has great value and appreciation for our readers and visitors. While we do not directly manage the ad placements with many of our programmatic advertising partners, we will continue to work closely with them to ensure the best environment possible for all of our audiences."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/transgender-activist-former-white-house-intern-sarah-mcbride-isnt-discouraged-by-trump-2018-3">This transgender activist and former Obama White House intern isn't backing down against Trump</a></h3>        <div>                    </div>    </div>

The companies behind those sexually suggestive ads you see all over the internet say they're working on toning things down

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://www.waze.com/livemap">Waze Screenshot</a></span></p></div><p></p></div></div>Waze does not just want to be known as a useful navigation tool for drivers on the road - but also an effective marketing tool for brands and businesses off it.</p><p>Since launching its own ads platform in 2012, the Google-owned community navigation app has run ad campaigns for a list of big-name advertisers including <a href="http://www.adweek.com/digital/waze-now-offering-native-style-ads-put-users-drivers-seat-173675/"><span>Dunkin' Donuts</span></a> and Adidas. Now, it is opening itself up to local advertisers.</p><p>Specifically, Waze is rolling out a series of ad products dedicated to small and local businesses looking to reach customers while they're on the road, called Waze Local. Ads on Waze will appear directly on the digital maps people use to get around.</p><p>To read more about Waze's latest ad offerings, <a href="http://www.businessinsider.com/google-is-planning-to-crank-up-advertising-on-its-navigation-app-waze-2018-3"><strong>click here</strong></a>.</p><p><strong>In other news:</strong></p><p><a href="https://techcrunch.com/2018/03/27/google-acquires-gif-platform-tenor/"><strong>Speaking of Google, the company is buying a GIF keyboard called Tenor, which powers keyboards on phones and Facebook Messenger</strong></a><span><strong>.</strong> Tenor will operate as a separate brand within Google.</span></p><p><a href="http://www.businessinsider.com/sexually-suggestive-ads-taboola-outbrain-revcontent-under-scrutiny-2018-3"><strong>The companies behind those sexually suggestive ads you see all over the internet say they're working on toning things down.</strong></a> RevContent recently moved to ban certain images, while Taboola says it's about to kick off an effort to clean up its network, with help from its users.</p><p><a href="http://www.businessinsider.com/buzzfeed-wants-to-build-a-roster-of-new-brands-just-like-tasty-2018-3"><strong>BuzzFeed wants to build a roster of new brands just like Tasty.</strong></a> The company has hired Melinda Lee as the company's first chief content officer for Buzzfeed Media Brands to focus on its growing portfolio of spinoff publications, including Tasty, Nifty and Playfull.</p><p><a href="http://www.businessinsider.com/heineken-pulls-racist-lighter-is-better-campaign-2018-3"><strong>Heineken is killing its 'Lighter Is Better' campaign after being slammed for 'racist' beer ad.</strong></a> "We missed the mark, are taking the feedback to heart, and will use this to influence future campaigns," Heineken said in a statement.</p><p><a href="http://www.businessinsider.com/the-21-ad-execs-that-wield-the-most-power-over-facebook-2018-3"><strong>Meet the 21 ad execs who wield the most power and influence over Facebook.</strong></a> These execs are marketing heavyweights from both brands and ad agencies who work closely with Facebook executives as a part of its client council. </p><p><a href="http://www.businessinsider.com/facebook-overhauls-privacy-settings-after-cambridge-analytica-scandal-2018-3"><strong>Facebook is overhauling its privacy settings in response to the Cambridge Analytica scandal.</strong></a> The company said it would reshape its privacy menus, rewrite its terms of service, and introduce a new way for users to access copies of their data.</p><p><span><a href="http://uk.businessinsider.com/mark-zuckerberg-is-preparing-to-testify-before-congress-report-2018-3"><strong>Mark Zuckerberg is reportedly preparing to give evidence before Congress about Facebook's role in US election interference</strong></a></span><strong>.</strong> Zuckerberg avoided the spotlight for five days after the Cambridge Analytical data scandal broke, then went on a media apology tour with carefully chosen outlets.</p><p><strong><a href="http://tk.wsjemail.com/track?type=click&amp;enid=ZWFzPTImbXNpZD0xJmF1aWQ9ODY2MzExNCZtYWlsaW5naWQ9Njc1NzY2NyZtZXNzYWdlaWQ9MTA1NDAwMSZkYXRhYmFzZWlkPTY4MzUwMiZzZXJpYWw9MzM5ODkzNjEmZW1haWxpZD10ZHVhQGJ1c2luZXNzaW5zaWRlci5jb20mdXNlcmlkPXRkdWFAYnVzaW5lc3NpbnNpZGVyLmNvbSZ0YXJnZXRpZD0mbW49MzU3MzMmZmw9Jm12aWQ9JmV4dHJhPSYmJg==&amp;&amp;&amp;61422&amp;&amp;&amp;https://www.emarketer.com/content/us-tv-ad-spending-to-fall-in-2018">2017 was the first year that US TV ad spending had declined since 2009, and that decline is set to continue in 2018 according to eMarketer.</a> </strong>The company estimates that TV ad spending will drop 0.5% this year to $69.87 billion, dropping TV's total share of US ad expenditure to 31.6% from 33.9% in 2017.</p><p><em>Sign up for the </em> <a href="http://businessinsider.us16.list-manage1.com/subscribe?u=994d348b4b605178944174605&amp;id=4c2b416844&amp;utm_campaign=Exec+Summary+Subs&amp;utm_medium=bitly&amp;utm_source=adv"><span><em>Executive Summary</em></span></a><em>, a new biweekly newsletter that brings the latest marketing news, trends, and company updates straight to your inbox. </em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/remove-apps-facebook-privacy-issue-data-tip-fix-2017-11">How to stop your Facebook friends from giving away your data</a></h3>        <div>                    </div>    </div>

What you need to know in advertising today

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Noam Galai</span></p><p class="caption">From left: Taboola CEO Adam Singolda, Outbrain co-CEO David Kostman, Taboola president and COO Eldad Maniv, and Outbrain CEO Yaron Galai.</p></div><p></p></div></div></p><ul class="summary-list"><li>Taboola recently acquired Outbrain in a deal to combine the biggest content-recommendation companies.</li><li>While pitched as a merger of two companies backed by a common mission, the Israeli-born pair who founded the two companies had fiercely battled each other since their inception more than a decade ago, in adtech's version of the Coke-Pepsi's soda wars.</li><li>Outbrain had a head start but lost its lead to Taboola, which was known for more aggressive sales tactics.</li><li>The two competed by paying lucrative guarantees to publishers that delivered revenue but ultimately stifled innovation among the publishers they purported to serve, according to industry execs. </li><li>As the companies fought each other on price, the rivalry also took energy from competing with much bigger foes, Google and Facebook, that came to dominate digital <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">advertising</keyword>, insiders said.</li><li>Now the question is whether the combined company can come up with a new identity and product features to effectively compete with the tech giants.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories.</a></li></ul><p>In October, the two dominant content recommendation companies Outbrain and Taboola announced plans to <a href="https://www.businessinsider.com/taboola-and-outbrain-merging-to-take-on-facebook-and-google-2019-10">merge to create a $2 billion company</a>. In a well-choreographed announcement, they talked of mutual admiration and a shared mission to support quality journalism.</p><p>But the reality behind the deal couldn't have been more different. </p><p>Outbrain and Taboola aren't household names, but their products - the "recommended for you"-type article boxes you find at the bottom of news articles - are ubiquitous across the web. They provide meaningful revenue to publishers from Fox News to CNN by renting space to advertisers at the bottom of the publishers' article pages.</p><p>Behind the scenes, the two companies warred for years to dominate content recommendations. From interviews with 10 current and former employees and publisher clients of both companies, the picture emerges of a battle that eventually wore down and ultimately undermined both companies.</p><p>The price war ultimately hurt the publishers they purported to serve by restricting their ability to innovate, and took energy from competing with much bigger foes, Google and Facebook, that came to dominate digital advertising, insiders said. </p><p>Shareholders of Outbrain - which once sought a $1 billion valuation - will receive $250 million in cash and 30% of Taboola stock, but the name will go away and Taboola's CEO will run the combined company.</p><p>Now the question is whether the combined company can come up with a new identity and product features to effectively compete with the tech giants.</p><p>The companies declined to comment for this article, saying the deal hasn't closed.</p><h2>Outbrain's CEO mentored his future rival</h2><p>Outbrain was co-founded in 2006 by Yaron Galai and Ori Lahav. Galai, who became CEO, was a serial Israeli entrepreneur who'd just <a href="https://venturebeat.com/2008/02/25/outbrain-a-news-recommendation-widget-raises-5m/">sold his search engine marketing company Quigo to AOL for a reported $350 million</a>. With Outbrain, Galai talked of helping online publishers by giving readers better article recommendations.  </p><p>A year later, fellow Israeli Adam Singolda started Taboola, which would become Outbrain's closest competitor. Galai said he even helped the younger Singolda in the beginning.</p><p>That relationship quickly evolved into a rivalry. On the surface, the companies shared similar origins, size, and basic product offerings, despite their having made a number of acquisitions over the years. But those similarities only served to fuel their competition. </p><p>Both companies fought to have their content-recommendation boxes be carried by marquee publishers so they could in turn sell that inventory to advertisers. Outbrain and Taboola would give the publishers a cut of the revenue generated by selling the real estate on their sites.</p><p>In addition, Outbrain and Taboola offered publishers lucrative revenue guarantees that became meaningful and easy income for publishers - as much as 30% of their revenue, in some cases, Outbrain has said.</p><h2>Outbrain obsessed about reader experience</h2><p>Employees described Galai as a hard-core product guy who sometimes wore sandals and shorts to meetings, and lived in a rented apartment. They said he was frustrated seeing the content-recommendation boxes show click-baity content that was lucrative but cheapened the host website.</p><p><a href="https://adage.com/article/digital/outbrain-cuts-spammy-marketers-expects-revenue-hit/238200">In 2012, Outbrain banned deceitful or spammy marketers</a> from advertising to improve the quality of content in the widget, a move it took knowing it could cost 25% in revenue.</p><p>Rather than obsess about getting the highest yield possible from content recommendations, Galai often said "the consumer's the customer," said Nic Paul, who co-founded a company, <a href="https://www.businessinsider.com/outbrain-acquires-revee-in-order-to-tell-publishers-how-much-revenue-each-individual-article-is-pulling-in-2016-3">Revee, that sold to Outbrain in 2013.</a></p><h2>Taboola was aggressive with deal-making</h2><p>Singolda, meanwhile, was a consummate salesman. <a href="https://www.haaretz.com/israel-news/business/.premium-taboola-recommendation-engine-ceo-is-confident-it-ll-be-bigger-than-twitter-1.7182856">The story he tells</a> is that he got his first funding for Taboola by pitching an investor at his daughter's bat mitzvah, which Singolda hadn't even been invited to. He's known for constantly traveling (just read his Twitter feed), whether to negotiate multi-year deals with publishers or take them to lunch in the interim to butter them up.</p><p>In negotiations, he was described as pragmatic about how publishers could make more money by permitting more down-market content in their content recommendation boxes, even if it risked them reputational damage. </p><p>"Adam would fly to multiple cities in a day to pitch a client; Yaron was a more laid-back guy," a former Outbrain exec said. "You never heard from Yaron," said a publishing exec who's worked with Taboola at two companies.</p><p>Both companies took similar amounts of outside funding - more than $150 million each. Outbrain raised money from investors including GlenRock Israel, Lightspeed Venture Partners, Gemini Israel Venture. Taboola's investors include Evergreen Venture Partners, Crescent Point Energy, and Daily Mail.</p><p>At a point, it seemed like Outbrain might be the one to prevail. Back in 2014, <a href="https://www.wsj.com/articles/outbrain-files-for-possible-nasdaq-listing-1417104839">Outbrain filed papers for a potential public offering</a>. It had raised $100 million at that point, to Taboola's $40 million. (Taboola would go on to raise another $120 million.) </p><p>But with both companies selling similar products, Singolda's highly visible, personal approach gave Taboola an advantage.</p><h2>Taboola got the lead on Outbrain</h2><p>Under Singolda, Taboola went aggressively after Outbrain clients, especially the more prestigious ones. "It was incredibly competitive. You were waiting for exclusive timelines to expire," a former Taboola exec recalled. When Outbrain was negotiating a new deal with CNN, the story goes, Taboola execs camped out in the lobby to wait for CNN execs to come down and counter with a richer offer. </p><p>That didn't pan out, but Taboola did recently land ESPN and ABC News from Outbrain. <a href="https://www.similartech.com/compare/outbrain-vs-taboola">According to online measurement company SimilarTech</a>, although Outbrain had an advantage in the US, Taboola eventually edged out Outbrain overall in terms of sheer number of sites and number of biggest sites by traffic.</p><p>"Outbrain began as a premium publisher network with the promise of helping readers discover interesting content," said another former Outbrain exec, Josh Guttman, a past member of Outbrain's management team who went on to found a startup, Small Door Veterinary.</p><p>"As the industry evolved and grew and Taboola came on the scene, there was pressure to take any advertiser who was willing to pay. Knowing the roots of Outbrain and its original vision, a premium content network, that was something Yaron probably wrestled with."</p><p>Observers point out that Taboola also had an advantage in video, which is more profitable than article links, having had its roots in video recommendations and <a href="https://techcrunch.com/2016/07/26/taboola-steps-up-in-video-referrals-buys-convertmedia-for-shy-of-100m/">acquiring video recommendation service ConvertMedia for $100 million in 2016.</a></p><h2>The competition took its toll</h2><p>Taboola and Outbrain say they're profitable, but the use of guarantees drove down their profit margins, according to multiple people familiar with the businesses. The guarantees also locked publishers into giving the content recommendation boxes prominence on their sites, which limited their own ability to innovate. </p><p>(The companies have since started to move away from those guarantee structures, as have publishers.)</p><p>Other factors limited the category's growth and hopes for an eventual exit in the form of a sale or IPO. </p><p>The margins varied widely, resulting in a lack of predictability in the businesses, which would make it hard to take the companies public, said one former exec. Letting more unsavory links in the content recommendation boxes got more clicks and therefore more revenue, but hurt Taboola and Outbrain's reputation. </p><p>Publishers were willing enablers. Some began negotiations by insisting they didn't want smarmy links sullying their pages, but would change their tune as they saw how much money they could make by tolerating clickbait.</p><p>Taboola and Outbrain also were heavily dependent on publishers, whose own business model was increasingly under threat from Google and Facebook.</p><p>Other, smaller competitors like Yahoo, Revcontent, and ZergNet sprang up, and while none became a serious threat, they were a distraction, Nic Paul said. "It created a lot of noise and maybe took focus off the main game," he said.</p><p>With challenges to other exits, Taboola and Outbrain have widely been understood to have discussed merging. In 2017, <a href="https://www.calcalist.co.il/internet/articles/0,7340,L-3712122,00.html">Israeli publication Calcalist reported</a> the two were in advanced talks after two previous attempts that fell apart because of the inability to reconcile the two CEOs, Galai and Singolda. The large number of shareholders between the two companies was cited as another obstacle. </p><p>Singolda himself once called the two companies "nice competitors" but <a href="https://www.haaretz.com/israel-news/business/.premium-taboola-recommendation-engine-ceo-is-confident-it-ll-be-bigger-than-twitter-1.7182856">acknowledged</a> that a merger would be hard for "two Israelis." </p><p>Now, he'll have the chance to make it work as CEO of the combined company. Galai is set to stay on to help during a transition period.</p><h2>What does Taboola do next?</h2><p>Some former execs of both companies alike say Singolda, as the more outward-facing, sales-oriented leader of the two, is the better choice to run the combined company. Some also expressed relief at the thought of the years-long competition finally ending. The question is, what does the company do now to grow?</p><p>Singolda's pitch is that a bigger company will be better positioned to help publishers compete with Google and Facebook for digital ad dollars.</p><p>"There's so much focus on Google and Facebook being too big that it's almost like a rallying cry from the industry to create more choice," <a href="https://www.businessinsider.com/taboola-and-outbrain-merging-to-take-on-facebook-and-google-2019-10">he said when the deal was announced</a>. "We hope that this is a huge win for the industry, giving small and big advertisers more choice in terms of where they can run their ads online and, in turn, help to grow revenue for publishers."</p><p>People interviewed for this story said they expected publishers to get worse terms once Outbrain and Taboola aren't locked in a market share war anymore, though.</p><p>And in the age of programmatic ad buying, advertisers can easily advertise against CNN's or lookalike-audiences through machines.</p><p>Finally, Google, Amazon, and Facebook have an edge in that they can let advertisers target ads to people based on things like their shopping behavior or their self-reported information - data that can predict whether people will actually buy. </p><p>That's why even people rooting for the company wonder if it has a shot to compete with Facebook and Google and offer more innovative products to publishers. As one former exec said, "It's hard to tell the difference between the two now."</p><p class="tagline">Get the latest Google stock price<a href="http://markets.businessinsider.com/stock/GOOG-Quote"> here.</a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/this-mom-is-winning-halloween-with-movie-inspired-crocheted-costumes-2018-10">This mom is winning Halloween with her movie-inspired crocheted costumes</a></h3>        <div>                    </div>    </div>

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