Taboola Taps $55B Ad Market

Taboola, long recognized for its dominance in native advertising with its ubiquitous "content you may like" widgets, is making a strategic expansion into the broader display advertising market. The adtech company has unveiled its new platform, Realize, positioning itself as a direct competitor to traditional demand-side and supply-side platforms such as The Trade Desk, AppLovin, Magnite, and PubMatic.

This shift opens up a lucrative $55 billion performance ad budget opportunity, setting the stage for Taboola to become a key player in a market historically dominated by Google, Meta, and established ad platforms.

Breaking Out of the "Chum Box" Model

For years, Taboola has been synonymous with the bottom-of-page content recommendation widgets, often dismissed as "chum boxes." These ad units, while widely used, had their limitations in terms of scalability and perception among advertisers. With Realize, Taboola is aiming to move up the funnel—shifting from purely native ad placements to more prominent display ad inventory across publisher websites and apps.

CEO Adam Singolda believes this move differentiates Taboola from its competitors. "Search and social are maxed out," Singolda noted, referring to how platforms like Google and Meta have become increasingly saturated and expensive for advertisers seeking new customers. By leveraging its 9,000+ publisher partnerships, including Yahoo, Microsoft, NBC News, Apple News, and Business Insider, Taboola intends to offer a more cost-effective alternative with high-intent traffic.

Competing with the Giants of AdTech

With its expansion, Taboola now competes more directly with major demand-side platforms (DSPs) like The Trade Desk and AppLovin, which specialize in helping advertisers execute cross-platform ad campaigns. However, while many DSPs focus on branding, video, or connected TV (CTV) ads, Taboola’s edge lies in its publisher-first approach and deep data insights.

According to Singolda, the advantage of running code on publisher websites for years gives Taboola exclusive data on user behavior, content engagement, and purchase patterns, which enhances its ability to target performance-driven advertising.

Performance Advertising: The Real Prize

The $55 billion performance advertising market is a highly competitive space, traditionally dominated by Meta and Google. Unlike brand-focused ads, performance advertising is all about driving immediate actions—be it a purchase, an app download, or an email signup.

Taboola’s move follows a similar playbook to AppLovin, which saw a surge in market value after expanding its ad solutions beyond gaming to e-commerce. Singolda believes Taboola can become the third pillar in the performance ad space, alongside The Trade Desk (which dominates branding) and AppLovin (which leads in apps).

Simplifying Ad Buying with AI

One of Taboola’s standout features in its new offering is Abby, an AI-powered ad assistant. This tool allows advertisers to seamlessly set up campaigns by uploading creative assets and defining their desired outcomes—whether that’s increasing website visits, driving purchases, or boosting engagement.

While many traditional adtech platforms require significant ad spend minimums or complex setup processes, Taboola is pitching Realize as an easy-to-use alternative, particularly for smaller advertisers that have been priced out of premium digital ad inventory.

Challenges Ahead: Brand Safety Concerns

Despite its potential, Taboola’s move into the broader ad market raises brand safety concerns for premium publishers. Ana Milicevic, cofounder of Sparrow Advisors, points out that performance advertising can sometimes lead to questionable ad placements.

For example, if a reputable news website like CNN starts displaying diet fads or crypto investment ads, it could deter higher-end advertisers who rely on premium placements for brand integrity. This challenge underscores the delicate balance between maximizing revenue and maintaining content quality.

A Broader Trend in AdTech

Taboola isn’t alone in its expansion ambitions. Earlier this year, Outbrain, one of its closest rivals, also moved beyond native advertising by acquiring video ad firm Teads. The deal positioned Outbrain (now rebranded as Teads) as a competitor in video advertising, reinforcing the trend of native ad companies pivoting toward broader digital advertising opportunities.

Final Thoughts: A Smart Play for Taboola?

Taboola’s Realize platform signals a bold new direction for the company, tapping into a much larger advertising ecosystem beyond its traditional content recommendation business. With its deep publisher relationships, AI-driven ad tools, and performance-first strategy, the company is betting big on its ability to carve out a meaningful share of the $55 billion opportunity.

However, execution will be key. While Google and Meta face increasing challenges with rising costs and data privacy regulations, they remain formidable forces in performance advertising. Additionally, competition from established DSPs and evolving publisher demands could create roadblocks.

If Taboola successfully balances performance advertising with brand safety, it could emerge as a major alternative for advertisers looking beyond Google and Meta. The next year will be crucial in determining whether Realize can truly reshape Taboola’s position in the adtech world.