• by John Motavalli , Columnist, March 23, 2016

As programmatic advertising grows, a parallel development caught our attention this week: So-called “content discovery platforms,” and the manner in which they are increasingly dominating media sites — especially newspapers but also digitally spawned content like MSN. Media companies are not making enough from programmatic advertising, and just keeping going requires arrangements like “content discovery,” in which sponsored links and saucy content combine.

As a long-time chronicler of how the Internet has been upending traditional media, I can’t help but observe that the widespread acceptance of sponsored content now challenges the very idea of what media and publishing is.

With the announcement earlier this month of native ad server Taboola Native, and a partnership between Reuters and Revcontent, the sponsored-content company that powers ad-supported slideshows like “Celebrities You Didn’t Know Had A Twin,” such merging is becoming ubiquitous. Revcontent also recently announced partnerships with Google and Forbes.

Revcontent and rival Taboola are everywhere. Taboola advertises 300 billion “recommendations” a month. Taboola sponsored content includes a picture package titled “This Hyena Was Cornered By A Pack Of Wild Dogs,” and “27 Tank Tops That Aren’t Covering Anything.” Taboola recently announced a huge deal with Microsoft and MSN, and works with the New York Times, USA Today, The Atlantic, NBC Sports, TMZ and many others, and it is also working with Google on mobile-device applications, which are designed to rival Facebook’s Instant Articles effort.

‘In-Feed Native Placement’
I talked to Adam Singolda, founder and CEO of Taboola, who said that he and a group of Israeli military vets started their company eight years ago because they wanted to “connect people to content they didn’t know existed.” He talks of a $70 billion “transition” to “in-feed native placement,” adding that native networks offer “a good opportunity for storytelling,” especially on mobile, where the small screen makes banners less effective. And, as so many users become less verbal and more picture-oriented, these often slightly salacious content slideshows have become popular.

Singolda argues that Facebook’s Instant Articles content can be hard to distinguish from the videos that friends or family upload, and may not do a lot for brand awareness. Instant Articles has been highly praised by clients like National Geographic, who use it to showcase nature videos. Instant Articles gives media publishers “an awareness vehicle,” Singolda observes, but it also can obscure their brand identity.

“I think it also brings a longer term challenge/question to all of us as an industry about whether users will less recognize the brands they're reading, and will go less to publishers directly over time. Some publishers spent 100 years building their brand, and I think we need to think about audience strategies to make sure we can enjoy the reach Facebook is providing to publishers, as well as other social platforms, but also find alternatives to make sure people still communicate directly with publishers, giving publishers the flexibility to create a unique reading experience.”

Taboola and Revcontent recommendation links sit on a publisher’s own pages, while Instant Articles reside on Facebook’s. The content they offer is compelling in a weird way; it’s hard not to click on a link about the 25 movie stars who have lost their looks. It’s all clearly marked as sponsored content, but this too could obscure the brand identity of media properties.

If media companies can’t generate as interesting content as Taboola and Revcontent, then we have to see this as a continuum from the early ’90s, when AOL partnered with media companies. While at the beginning, publishers made out well, two things went wrong.

• Media companies didn’t learn much of anything about the online world while AOL learned a lot about content.
• The content deals did way more for AOL than they did for the media partners.

Eventually AOL started charging their partners for content rather than paying them for it, as they did at the beginning. When that happened, media companies flailed around for years, as they didn’t have the staff or know-how to go online on their own. This could be happening again.