I'm happy to welcome to the stage, Adam Singolda, the founder and CEO of Taboola. Adam founded Taboola in 2007. Danny, can you close the door? Thanks. Adam founded Taboola in 2007 from his parents' house in Israel. His vision was to build a recommendation engine that would help people discover things they may like and never knew existed. Today, Taboola is the leading recommendation company for the open web. Prior to founding Taboola, Adam served in the Israeli Defense Forces as a research and development engineer and manager, having graduated from IDF Officers Academy with honors. He studied computer science at the Open University of Israel. So, as you know, we keep track of productivity, and you guys have had really nice productivity improvements, which is revenue per full-time equivalent employee.
Yep.
And so now you're managing around 1,700 people. My question is, when you think about culture... I've been dying to ask you this question. When you think about culture, what is the culture you're trying to sort of create and build at Taboola? And what are the metrics you use to figure out whether it's actually penetrating the rank and file?
Yeah, I mean, first of all, I spend a lot of time personally thinking about that question because I think, you know, as you're doing something for a long time, and we've been doing Taboola for quite some time, and hopefully forever, culture becomes, you know, the only thing that is, everything changes around you, but your culture, you know? It's, you can copy someone's pitch, you can copy someone's presentation, but you can't copy the way a group of people are doing something together. So I think it's, it's almost a true innovation of a company. I think for us, what I'm, I'm always thinking about is how, how do you, how do you scale a startup? And in many ways, Taboola is a startup of startups, right? We have e-commerce.
You always say the same thing, "You have so many things going on.
Yeah.
You know, we have e-commerce, we have Taboola News, which is our OEM business, we have Yahoo!, that's now part of our core, we have the bidder. So how do you manage it such that it feels to each one of that part of the business, like a founder CEO of a startup?
Mm-hmm.
So I think one is one thing that we think about is, how do we grow it so it feels like a startup of startups? Two, I think we're trying to be as much data-driven as we can, which means that it's less about seniority, it's less about what you think you know. It's more about bringing to the conversation things you think that can help you make the case, and then trying to make a decision. So I always say that no one is immune at Taboola from a very hard question, and we're trying to really break break all the walls that we can. Now, almost 2,000 people, you know, we have those informal conversation, and a lot of it is around being as flat as we can and as data-driven as we can. And three, I think, is around transparency.
You'd be amazed how transparent Taboola is. I mean, amazed, mind-boggling amazed. I mean, we-
By the way, I've had five CEOs put transparency in culture.
I don't know what-
It's common.
I wonder whether it is too. So for us, just to give you an example, we have a university. If you join Taboola, you join at any level. You can be a VP, you can be whatever, wherever you are in the company, you join the university, and it's already flat, and you're never, we're all the same at the very beginning. We're learning the same things, you meet the same people, and you ask different people questions. And the questions people ask me in that intimate forum are just anything from my children, to my life, to my-
To your Legos.
To my Legos.
Your Lego creation.
To my, you know, all my issues. And then we do that every two weeks with almost 2,000 people.
Okay.
We have all hands. It's fully anonymized, and people can ask us anything, you know, about M&A, about compensation, about, you know, personal to professional questions, and we answer 100% of questions.
Okay.
We may say-
Anonymous?
And we may say, "This is truly-- what an annoying question," and-
Yeah
... I'll answer it.
Yeah.
I'll say I'm annoyed, like, "It's a really annoying question. I don't know why it's important to you." But so I'll tell the truth, and I think it gives people the impression that we're just kind of like we're in a bar, having a beer, having a conversation, but-
On Zoom.
On Zoom with 2,000 people. I think one way to measure that, 'cause to your question, how do you know you're doing something right? I think one good proxy for that is the type of people that join Taboola and what do they get to do at Taboola. We have different examples, you know, over the years. As an example, our head of revenue, who runs, you know, last year, $1.5 billion business-
Yeah
... before Taboola was a chef, right? Like he was- he used to cook for a living. Before that, he wrote a book, and I'll, I'll never forget the first conversation that someone called me about him, and he said, "I have this great candidate for you." And I said: "Well, what did you do before?" And so, "Well, he's really, he's a really talented chef." And,
You're like, an ad sales business.
And I was asking my CEO, "What are you smoking? I mean, is this like a charade? Like, what's going on?" He said, "No, no, he's a, he's a pilot. He's like a super impressive guy. You have to meet this guy. This guy doesn't stop." So I met him, and I said, "Let's go on a call together with a publisher.
Okay.
He said, you know, "The guy doesn't know what CPM is," like, he doesn't know anything.
He doesn't know what CPM is.
So he doesn't know what CPM, CPC is, and we're taking a call with Hindustan Times.
Okay.
This was 10 years ago, and it was a really good call. And I told him, "You know, you're going to start Asia Pacific for us, and let's see what happens." And now it runs, it runs the world. And we have, I have just so many examples like that. Steve, our CFO, first time CFO, I would argue, the best CFO in the U.S.
Steve is fantastic.
He’s fantastic. I really like him, not because he’s here.
Not because you said it here?
I would say this about you behind your back.
I'm gonna check out performance review.
Yeah.
Yeah.
You know, it's... But the reason is that I think it's not about what you used to be. I think it's who you can become, and I think it's a good way to measure. If people can get to those positions and succeed, I think it means your culture allows it.
Okay. I mean, one of the things I would say about you, which I'm surprised you didn't give me this year, was, you know, when we talked about last year, the question was: What thing that happened in your youth that informs your leadership today? You were talking about working in the military and being assigned a group of people with very high stakes for intelligence, and you couldn't fire the guys. You just ...
Right
... if you got the intelligence wrong, somebody died on the front line. So, and that you've always created these teams, and that sort of goes to, you don't sort of where-
Startup of startups.
Yeah. And I think so I'm surprised you didn't talk about team in this culture.
I think, I think when I say startup of startups, it means you have, you know, founder's mentality, and founders live and die by what they need to do and how they do it.
Okay.
Like, there's a reason why startups succeed, but big companies have more money, more resources-
Okay
... more infrastructures. Like, why do small companies get to innovate, where big companies have so much more than they do?
Okay.
I think it's because that founder mentality and, you know, you compare it to the Israeli army.
Yeah.
It's, it's similar in the way that it's very flat.
Yeah.
No one can get fired. There's nobody's a VP.
Yeah.
There's no promotion. At least not over time, you get promotion, but not because you did something great yesterday. And I think, you know, in many ways, there is a good analogy to a founder mentality, and I think when you scale your company to be billions of dollars in revenue, can you imitate that?
Okay.
Like Taboola News grew last year, you know, we said it was approaching $100 million in revenue.
Yeah.
So again, you know, it's a startup within Taboola, right? There's someone who owns it. This is the, they wake up, they go to sleep, it's, they don't count sheep, they count OEMs and devices.
Yeah.
They count, you know, swipes.
Yeah.
That's the only thing. They don't care about brand advertisers.
No.
They don't care about. They only care about OEMs.
Right
... and most of their business is in Asia Pacific, and I think this is, if you're able to nurture this founder mentality, I think you have a, a more authentic vibe at the company that allows it to diversify and grow.
Okay. Yep, totally interesting. So let's go to future work. I think your current work from office policy is three days per week. Is that still?
Minimum, yeah.
Minimum. Okay, and what % of people are ignoring that and not coming in on your required days?
I think everyone is. I mean, to my knowledge, people are coming 3+ days a week. I think many of us try to come more. I come more to the office when I don't travel. I think, you know, it's funny, some regions by far, people come a lot more. In Israel, people come more.
Yeah.
Um-
'Cause they're all there. They're all close.
There's it's like super social culture, and so I think in some regions, even before we had to decide it's a 3 days minimum, people used to do it. But, but, you know, it's mandatory. It's not like, you know, you... It's like your kid can decide you don't go to school. They have to bring a-- the doctor has to tell the kid they it's okay not to go to school, so you can't just not come to the office.
You guys measure it? You measure if people are in three days, and there's a consequence if they don't show up for three days?
I don't think we measure that.
Then it's not mandatory.
No, I mean, I don't know. I mean, I have no idea if we measure it or not. But I think if people didn't come, we would know.
Okay, fair enough. I guess I'm trying to think about culture versus future of work. That's what I'm, where I'm going with this, right? I think it's hard to have culture if you have a lot of employees that are on Zoom all the time.
Yeah, I think that's completely not sustainable.
Okay
... the whole idea of working from home, at least, you know, I think it's okay. We basically say, come to the office or meet a client or meet someone, but just don't be in, don't be in your house more than two days. And I think ideally, people will see the value in that, or just choose to come more in any case. But, you know, I don't think it's sustainable.
To have people work from home
... Especially not at that size. You know, your collaboration is such a big deal, and you want to make mistakes. To me, I always say, like, if I can't FaceTime you on a Saturday, then you're not really my friend or my colleague, and I will never do it if I never met you in person enough. You know, so if I think about someone who joined Taboola, and if they didn't come to the office enough, and they haven't met enough people in person, they would be quite lonely because they couldn't call anyone and say: "I have a problem, what do I do? I made a mistake, what do I do?" So if, you know, we talk about startup of startups, part of it is making mistakes and, you know, call it the economy of good enough.
You know, you do something. You make mistakes, you make it better, you make it work, you make it better. The only way it works is if people feel comfortable talking about mistakes.
Mm-hmm.
But you'll never be able to, you know, again, FaceTime on a Saturday-
Yeah
... unless you're my friend, and I trust you, and I know you, and you can't do that. You can't build a culture on two dimension.
Okay. All right. Okay, goals. So let's talk about Taboola, Taboola specific issues. When we're sitting here a year from now-
We have no issues, Laura. We have only opportunities.
Issues, questions.
Yeah.
So Taboola specific questions. When we're sitting here a year from now, give me some metrics you want to have achieved, and I'm going to write them down, and I'm going to hold up this book a year from now and say, "Okay, Adam, here's what you said you're going to achieve.
Okay.
What do you want to achieve between now and a year from now?
Well, the biggest things-
Mm-hmm
... this year, are Yahoo ramp-up, so I want to, you know-
Okay
... think a year from now, looking back-
Okay
... hopefully, that's been very successful and, you know, a transformation really for us, not only financially, but also as a company.
Okay.
And the second thing is that we're putting, you know... Probably that's a bigger thing than Yahoo even, is just the whole idea of advertiser success. So I think, you know, making advertisers successful, specifically performance advertisers.
Yep.
As I think about who, what companies grew to become $2 billion, $3 billion, $4 billion, $5 billion in revenue, there was something that's common to all of them, and that's their ability to make performance advertisers successful, whether that's self-service or with Salesforce. I think that's—there's no way to add billions of dollars in revenue unless you're very good at that. And when I compare the ad tech industry, which you cover-
Yeah
... to the walled garden, which you cover, there's just a fundamental difference, which is they do it really well, and the rest of the open web is not.
They do it well. Who's they?
Google, Facebook, Amazon.
The walled gardens.
Snap. Yeah.
Okay.
You know, Google, Facebook, Amazon, really good, and then less, and less, and less. So, you know, one way to measure that is, Facebook makes about $200 a year per user in the U.S.
Yep.
Snap makes about $33.
Okay.
But in Google, you know, Facebook and Google, they-
They're both walled gardens, so.
I agree.
Okay.
And then, you know, and then you have Taboola, which is open web. We do about 4.5. So can we get it to-
$4.5?
dollars, yeah, a year.
Mm.
Can we get it to 5, 6, 7, 8, 9, 10, 11, 30, 40? I think that just goes to show how much Taboola can grow by improving yield. That's the second thing I hope to make a big impact. We measure that-
Mm-hmm
... by advertiser success, by adoption of technologies such as Max Conversion, which we can talk about.
Okay.
We measure that by churn rates and NDRs, productivity of account managers. So those two things are the biggest ticket items for 2024. There are others, but those are the biggest two.
So I just moderated a panel called The Future of Advertising, and one of the guys... There were five CEOs. One of the guys said, "Open Web is dead. Cookies deprecation is gonna rip out a lot of the SSPs. Generative AI is gonna really increase sort of garbage contents that you're have to kinda clutter through, and then so there's gonna be sort of a flight of ad dollars, at least in 2024, during this transition, into walled gardens, and then because of the signal loss." Please comment.
Very, very negative person, whoever that was.
Yeah.
But it doesn't matter. We're not gonna name names, you know? That's not what we do here.
I thought it was an interesting point of view.
Yeah, I'm joking. So I think it's partially right and a lot wrong, and I'll say-
Okay
... what's right. I think, first, I don't think money can—the walled garden, Google, Facebook, Amazon, as they control, I don't know, 70% or 66% of the ad dollars, there's not much more they can take. If they could take more, they would take it. There aren't advertisers who say, "Well, I wish I could spend more with Google. I just choose not to do it." That doesn't happen.
Right.
So they don't spend more because they can't. They capped out on how much they can spend-
Okay
... and then they go and spend on other channels.
Gotcha.
So, so I don't think that's what's gonna happen. I do think that some companies, many, maybe many, will suffer because third-party cookies will go away, or there's gonna be deprecation of third-party cookies.
Yeah.
We've seen this in the past.
Yep.
2017, as happened with Apple.
Yeah.
We do know that if you have a big retargeting business-
Yeah
... if you're in a sandbox, which all SSPs and DSPs are-
Okay
... then you're somewhat exposed. Now, I think there are many good companies who probably have good people thinking about that problem, but it's definitely a big event for them.
Mm-hmm.
I think for companies who have code on page, that are not in a waterfall, that are not in a sandbox-
No, I get that you're protected 'cause you control the end-to-end.
But I don't know if we're, we're protected. I think, you know, companies like Taboola, Outbrain, RevContent, Google... other other smaller companies that have code on page have, have better hold on to the user reach. But, but I think if you're an SSP or DSP, you're probably more concerned. So I think what's gonna happen is, at least for us, Safari back in 2017-
Yeah
... the yield went faster up, so it accelerated faster.
But it went down, like, 20%, right? Or maybe that was GDPR, where you had, like, the pricing, the signal loss under GDPR. I think you had a slide in your IPO deck. It went down, like, 20% within four weeks-
No
... and it was back?
No. The only time that Taboola went down in yield was 2022, and there was one year that we've added a lot of supply at once. I think it was 2019. So, in the history, since I started Taboola, only twice did the yield go down in a significant way, 2022 and 2019. 2019, we've added bazillion of publishers in a day.
Mm-hmm.
But that's about it. Beyond that, we... If you look at our presentation, we actually show that the yield is accelerating faster on Safari. Now, I'm not gonna tell you that in 2024. I assume the same, but I feel good about it's not gonna go down-
Okay
... for companies like us. So but I think SSPs and DSPs, they're probably gonna go through some shake, and I don't think Google and Facebook will see more from that because I don't think they can absorb more, otherwise they would.
Okay.
But one more interesting thing about supply-
Yeah
... is that I think with the rise of, in 2023, if you look at companies like Uber now in advertising-
Yeah
... Amazon launching ads on Prime-
Yeah
... you know, Disney, Netflix, you're seeing more and more companies, you know, Pinterest doing the Amazon deal, you're seeing more companies getting into advertising.
Mm.
So I think we're gonna see a lot more supply that may be great supply for advertisers to spend on beyond what we know today as traditional SSPs, DSPs. So-
Well, these are all walled gardens, though. Uber's a walled garden. Amazon's a walled garden. These are all new walled gardens.
We'll see if they're walled garden... Pinterest, you know, just signed a third-party-
Walled garden.
Well, they signed a deal with Amazon, and I'm not sure they're done.
Walled garden.
Yahoo! signed a deal with Taboola. I'm not sure that's the last one. I'm not sure they're all... We'll see, I think, more... I think we'll see more the dynamics of advertising in a box-type relationship, where companies don't think they can do it themselves.
Okay. All right, cool. Let's talk about Yahoo! Of course, that's what we should do. That's, like, that's the big story for 2024 for you guys. Let's give an update on demand migration so far, and how is that going? 'Cause I know that's a new thing for you, moving demand.
Yeah. Uh-
You moved supply, I think, successfully already, 'cause that you've done 100 times for 100 other companies, but it's demand that's sort of the new-
Yeah. There are three parts to that relationship: the supply, which is fully accessible now-
Okay
... and that's, you know, your finance, news, sports, email, all of those things.
Okay.
There's the data integration, which is yet to happen, so we're bringing... connecting what they know and what we know-
Okay
... from a contextual perspective. The third one is migrating advertisers. There are two types of advertisers. The first one is native direct.
Uh.
Think of it as kind of like similar advertisers to what Taboola has now.
Uh.
These are advertisers used to buy from Gemini. Gemini was the internal solution for Yahoo!
Okay.
Most of it has migrated to Taboola, and it's moving, and it's going great. We did say that Q4, we expected $20 million in revenue.
Mm-hmm.
We also published, I wanna say three weeks ago, a case study of a big financial advertiser that said, since they migrated, their volume of spend went up three times, and their cost went down 24%.
Mm-hmm.
This is just one of many that we're seeing in general, where the de-risking element-
Uh-huh
... of that deal to investors is that the Yahoo! sees better yield on their own supply.
Okay.
Advertisers see more spend and less cost using our technology.
Okay.
This is beautiful.
Okay.
It's exactly what you wanted to see, right? So what's ahead of us is primarily migrating the DSP, which is a big chunk of revenue.
Yep.
That's Yahoo!'s version of The Trade Desk.
Mm-hmm.
These are amazing brand advertisers, right?
Mm-hmm
... that we-
New advertisers to you, many of them.
New advertisers to us. Also, you know, new type of advertisers, very large enterprise, kind of enterprise advertisers, and those will be migrated between now and what we think will be at maturity by mid-2024. That's kind of what we said.
Mm-hmm.
Taboola is already embedded in the DSP.
Okay.
For those who are migrating, the experience they get is that on the DSP, they have CTV, display, video, native, and the native is Intel Inside. It's like Taboola-
Okay.
in the dashboard.
Okay.
And then what's ahead is account managers and salespeople bring it into market. There's a human element, and testing it, showing them it works, and moving them to Taboola.
Okay. Okay. So we think, well, that will be done—the demand integration will be done by June of 2024?
Yeah, that's, that's what, that's what we think.
Okay.
By the end of the year.
Okay. So to me, there must be a supply versus demand imbalance today, 'cause we've integrated the supply, and the demand won't be integrated till midyear.
We're balancing it, so we're not capturing all the supply, otherwise we'd have all the revenue now.
Okay.
So we're taking as much as we can chew, it's like slowly, and we're ramping that up. So we're trying to balance supply and demand, so there's no supply shock.
Okay. Great, okay. And you, do we think that will be in balance by the second half of 2024?
Within the second half of 2024. Well, it's more heavy, the Yahoo! relationship will be more heavy towards the second 2024-
Okay.
-which is where it's more ramped up.
Okay, great.
All advertising-
And into 2025?
2025 will be a full year.
Okay.
And again, if we remember when we announced the deal, this is just the beginning, right? We also think there are synergies on the Taboola network, because those advertisers can spend on Taboola, the data can make all the yield go up-
Yeah.
-which can make both sides higher. And then you have e-commerce, header bidding. Yahoo! is a big display business, which we think we can-- If you think about Taboola and Microsoft-
Mm-hmm.
That's a nine-digit relationship.
Yeah.
Right? Could that be replicated on the Yahoo! front?
Mm-hmm.
So, you know, I think Yahoo! can be bigger than what it is now. So that means, you know, potentially outsized growth coming to 2024, 2025.
Okay, fair enough. One of the points you made is they have a different type of advertiser, these really big brands, and you just brought over the Yahoo! sales force in the fourth quarter of 2023. How quickly can they port the relationships to Taboola, do you think?
We brought some. So, still, most of the sellers and account managers are on the DSP side. They remained on the outside.
Okay.
So, that we haven't brought in so many people, but the people we brought are kind of like overlay people that can help. They know the clients, they know Yahoo!, they get to know Taboola. So think of it more as an overlay kind of connecting tissue between the Yahoo! side to Taboola. But most of the sellers and account managers on the DSP work for Yahoo!.
Okay. Okay. Huh, interesting. Are there more Yahoo!-type business partnerships out there, or is Yahoo! really unique?
I think it's the beginning.
Okay. You think you-
Yeah, because I think, I think, what's gonna happen, is that's what. Here's my prediction. You ready?
Yeah, I'm ready.
Okay.
Not the death of the open internet.
No. That person really needs a cookie. But like a really sweet one. So I think that it's gonna be... When you think about the job of a Fortune 500 CEO-
Yeah
-in America-
Yeah.
It's gonna be strategy, finance, execution, and advertising.
Okay.
I think when boards are gonna be looking for CEOs for companies, they're gonna say: "What can you do for advertising?" Because it's gonna be irresponsible when you see all these great companies capturing so much. If you look at even Amazon, which is a great company, their top two line items are cloud and advertising, being how profitable that is to them.
Sure.
So it's gonna be, we're gonna see a lot more, a lot more Uber-type, app-type, IoT-type, you know, companies getting... We see OEMs. Everyone is gonna get into advertising. Most of them will not be able to do it on their own. Most of them will not want to give it to Google.
I agree with that.
Most of them-
Hundred percent
... would not want to give it to Facebook.
Agreed.
So what's gonna happen, they're gonna need a friend-
Okay
... as James Taylor says.
Okay, and you're their friend.
I think we're-
Taboola is their friend.
We are a terrific win-win open web friend.
Okay.
This is, I think, where, you know, I think we're gonna see many of those.
Mm-hmm.
Hopefully, we'll, you know, once we've proven Yahoo!-
Yeah.
Right, 2024 is a great year for us to showcase this can be done, right?
Okay.
'Cause Yahoo! and Apollo, these are very smart folks.
Yeah.
Right?
They are.
So we showed that these smart people made their bet on Taboola, and it worked, and it's a billion-dollar decision. Can we make the next $1 billion-$2 billion decision for other companies across different verticals? And so I think many companies will get into advertising, and I think most of them would not want Google or Facebook, and they would say, "Well, who can do it?
And they don't want to hire their own ad sales force.
And, and-
It takes too long.
And also, if you're very big, and here's another where size matters.
Yeah.
Let's say you're very big, and you think your advertising potential is $1 billion a year, or 1.5, or $2 billion a year.
Yeah.
Who are you gonna give it to? Who makes $1.5 billion-$2 billion a year in revenue in the open web?
No, not that many people.
Taboola.
Yeah.
So, I think you're not gonna give it to someone that's smaller than you. You need someone that is at least as big as you.
Okay.
I think size matters, too.
Okay.
That's why, you know, we may see more consolidation, deprecation, but size is gonna become even more important, I think, you know, over time.
Okay.
Advertising in a box, that's my prediction. Advertising in a box.
Yeah, I'm not sure-
As a service.
... anybody knows what that means.
Everyone will outsource advertising to someone.
Okay, if they don't have an ad sales force already.
Or technology, or they don't have the tech, they don't have the sales force.
I mean, I'm thinking about Apple, right? 'Cause I think we're writing that Apple should add advertising 'cause it's an 80%... I mean, they have 35% gross margins on their hardware, 65% on their services. If they added advertising, it'd be an 80% margin business. I, I don't think they would outsource it. I bet they would build an ad sales team, and it would take them 5 years. I, I... So I don't think all companies—I agree with you, all companies need to have ad revenue as a revenue stream.
So, I wanna add, so I do wanna, and, you know, this is like we have people as a witness. I wanna add to our-
People as witness?
Yeah, uh-
Oh, back to goals?
You know, back to-
We're going back to goals?
Back to 20-
Getting Apple? Well, that would be a thing.
No, thank you.
Okay.
Getting someone, like, who is the next—seeing more of this advertising as a service type of relationship.
Okay.
I wonder if 2024 we'll see more of that. We'll see more companies, big companies, outsourcing advertising-
Okay.
to third party. I wonder if we'll see more of that.
Well, they have to first announce they're going to drive advertising, and then it takes like a year-
Whoever that is-
to figure out.
Whoever that company is.
Okay.
I'm just saying, let's see if we'll see. And by the way, we're seeing it today with OEMs. Taboola is a $100 million business. I can tell you now, as a scoop, that we did cross the $100 million last year.
Okay.
We said we were going to approach it. We generated more than $100 million.
This is from what? Other than-
OEMs. This is Xiaomi, Samsung, OPPO.
For news?
This is Taboola News. Yeah.
Taboola.
But these are also big companies. This is another example of big companies that have huge distribution of devices-
Mm-hmm.
that are outsourcing advertising to third-party companies, technology companies.
Mm-hmm.
I think we'll see more of that.
Okay. Okay, cool. So let's talk about, you've been laser-focused in your core business on growing your yields, which is effectively pricing. What's improving, other than easier comps starting late next year, the comps get easier, and what metrics can you give us that signal progress in the core business?
Yeah. The biggest thing that, first, it's our number one investment as a company.
Yep.
I think the biggest area we're focusing on is AI and bidding strategies and Gen AI-
Okay
-for smaller advertisers.
Okay.
We announced that Max Conversion, which is basically... And again, another riddle in this industry is that if you think about advertisers who buy from Google, Facebook, and Amazon versus buying from anyone in the open web who was today at this event, when they buy from Google, Facebook, and Amazon, all they have to tell them is what their business objective is, and they do the rest. Like, if I-
Sorry, you're using a lot of nays. Do that slower.
I'm a flower shop.
Yeah.
I go to Google.
Yeah.
I want to get clients to my flower shop.
Yeah.
Google just asks me how much is a client worth to me, or they may even say that.
They give you a budget, maybe.
They say, "You don't even have to tell me. Tell me what's your budget, and I'll send you clients. I'll show you I can send you clients.
Okay.
When the same flower shop calls anyone in ad tech-
Mm-hmm
Today, the flower shop has to come up with either a CPC or a CPM, which means nothing. My wife runs a flower business. If I ask my wife: What's your CPC or CPM? She would think, again, I lost my mind.
Right.
So she would say, like, "I'm selling flowers.
Mm-hmm.
I want more clients.
Mm-hmm.
But in Google, it's much easier. But in ad tech, it's: Give me your CPC, give me your CPM. Very complicated.
Mm-hmm.
The biggest transition we're making is basically mimicking the walled garden kind of bidding strategies.
I see
and bidding this.
Okay.
So, Max Conversion is one big step towards that, which is helping advertisers just come to us, give us a budget-
Okay
and we show them automatically. We can get them clients.
I see.
Very similar to what the experience they have at Google, Facebook, and Amazon. I think it's not that, you know, we're going to invest more in that. So one metric is adoption-
Okay
of AI bidding strategies. We announced we crossed to 30% of adoption of that last year.
What's that mean?
More than 30% of our revenue is using this Max Conversion technology-
Okay
which means they don't have to tell us CPC or CPM at all.
Okay.
It works.
Got you.
We did say that 2024, it's going to be most of our business. So I think-
It's going to go from 30 to 60 or 70 or something?
I hope most vast majority. So but my point is that CPC will be, you know, a tailwind at Taboola, and that's going to help us to get more advertisers to work with us because it's going to be much easier to-
Wait, wait, wait. Sorry. The 30% going to 70%?
Most of our business by the end of the year will be from advertisers who work with us using these advanced AI technologies.
Yes
not using CPCs or CPM.
That'd be a big shift-
I know
in your business model.
Now, we will bid on their behalf, but they don't have to tell us anything.
Got you. Okay.
That means, you know, we look like a walled garden, we feel like a walled garden, we're just not evil.
That's really funny. Okay, let's talk about your strategy to move up the page, which has higher ad unit valuations. Can you talk about that progress and what is it driving revenue growth? Is it just a more full-funnel kind of offering for your new clients? Tell us about the value being created as you move up the page.
Yeah. So our biggest kind of investment in terms of higher impact placement-
Yes
has been through mainly the homepage.
Okay.
We have, we have a product called Homepage For You, which essentially is an editorial product-
Okay
that editorial teams on the publisher side buy.
Yes.
They don't pay for that, but they buy into it.
Yes.
They each get a seat at this platform. They're able to A/B test creative. They get to-
Mm-hmm
Get insights into articles they write, which one of them convert to subscription. People read this, read that, so it makes them smarter. They love it.
Okay.
We have north of 3,000 writers using it.
Okay.
So, again, it's another startup at Taboola, and it also personalizes now almost the entire homepage.
Okay.
We have incredible publishers that now 80% of the homepage is completely powered by Taboola.
Okay.
Which is amazing, because-
On the content side?
On the content side.
Okay.
As part of that, they give us high-impact ad placements.
Yes.
And so that's kind of our biggest step forward toward getting-
Is this different than Taboola News? This feels like Taboola News to me.
Well, news is on Samsung and Xiaomi. This is on publisher sites. So this is actually-
On publisher sites.
Yes.
On desktop?
Yeah.
Okay.
Or mobile.
Okay.
If you go to McClatchy-
Yeah
-and you go to, Miami Herald-
Yes
... dot com, the homepage is fully powered by AI.
Okay.
We're able to see that you might be into e-commerce, we'll send you into an e-commerce page, but Steve is really into video, we'll send him to a video page.
You're into Legos, so yours is a big Legos.
I will always get Legos, yeah.
Yeah.
Because why not?
Yeah.
So this is fully now-
Okay
... they're able to ramp it to the entire network of McClatchy.
Okay.
Now the entire homepage is better. You think about how good is, you know, Instagram and TikTok in keeping you engaged?
Yeah.
Why shouldn't the homepage be as good?
Right.
But just with editorial content.
Yeah.
So that's our biggest step forward toward empowering the editorial team, and in exchange, getting high-impact placements.
Getting high-impact placements?
Yeah.
Okay, great. So is high-impact placement, if it's tied to this product, does that mean it takes a little longer to get done?
Yeah.
'Cause this is a big sell.
Yeah. And, I mean, it's a slower burn, but in terms of revenue impact, in any case, I think the vast majority of revenue-
Mm
... comes from performance advertising-
Yeah
which is not necessarily the homepage placements.
Yeah.
Right. So I think it's a slower burn. Because, you know, you're selling to the editorial teams.
Mm.
Once they buy into it, they never want to churn, really, so I think it's a great moat for the publisher business.
Yeah.
It also makes us unique. We're very special in the sense that when publishers work with Taboola, everyone joined the meeting. You know, it's like editorial team, product team, audience team, subscription team. Everyone wants to buy something from Taboola-
Okay
... versus a lot of times, when other companies come in, it's mainly a CPM buy, right? So we compete-
Okay
... for everybody's attention.
Okay.
So for me, it's less about necessarily the immediate revenue we can generate from homepage.
Yeah.
It's more about being special to them, so they want to work with us forever.
Right.
You know, NBC just renewed for five years, and obviously, Yahoo! is 30 years.
Mm.
We have many publishers that, you know, they've been with us for north of ten years now.
Mm-hmm.
It gives us... Investors, I think, like that a lot. We now reach 600 million people, active users every day, through those publishers combined.
Mm-hmm.
It's exclusive and long term, so it's really our users.
Right.
You know,
They're captive. Questions from the audience? Questions? Okay. Great! Let's talk about Connexity. I think Connexity was about 20% of your revenue in 2023. What are your goals for Connexity and your e-commerce business by year-end 2024?
Well, we haven't published 2024 numbers, but over time, I do want Connexity in e-commerce at this point to become, you know, 30%, hopefully more-
Okay
... of the business. It's an incredible business, for a few reasons. One, publishers want it, right? Publishers want to get into e-commerce.
Okay.
If you go to time.com, if you go to NYT, The New York Times, Condé, Meredith, Hearst, you see that they are all in on e-commerce, sustainable revenue that builds direct-to-consumer relationship.
Okay.
They want people to interact with them directly-
Yep
... buy from them directly. So I think there's going to be a, you know, increasing trend of that with publishers. It's a great financial business, you know. When you grow that, it has great contribution to the bottom line, so I love it. I mean, I think, you know, I hope it will become as big as possible, and it's also very premium.
Mm.
An e-commerce ad is a great ad.
Okay.
Right? So... and also, you look at the trends. TikTok is all in on e-commerce. This year, $17.5 billion.
Yeah.
Shein is coming in strong. So you're seeing all these trends with e-commerce. I think it's just the beginning. So the market wants it. We have it. It took Connexity, you know, almost 20 years to build relationship and trust with those retailers.
Yeah.
Those retailers, basically, unless they know you, trust you, worked with you before, they'll just send you to an affiliate marketer. So just work with these guys.
Okay.
We're not going to work with you directly.
Yes.
I think it's, you know, it's very special, and I hope it's going to continue to grow.
Is it a retention tool for existing clients? Does e-commerce give you new client access, or is it just an upsell for existing clients?
It's both because... Well, first of all, we upsell that to existing publishers, which means that the, the share of wallet goes up.
Yes.
We pay them more, which means that if they want to consider someone else, that someone else has to pay for the whole thing.
Yeah.
So it's much harder. It's another-
To take away an advantage.
... It's another moat.
Yeah.
When we're speaking about all the things publishers get, you know, you have the Homepage For You. Their content is on Taboola News. They get traffic. E-commerce generates commerce revenue, the core feed, the native revenue, the high-impact placements, all those things are coming together.
Okay.
It builds it a more sustainable business, but so we upsell that to build a better moat.
Yeah.
But also, when we fight for new deals, we offer that ahead of time, and we say, "This is what we think can happen.
Mm.
You'll see more exciting deals coming up-
Okay
... that are mainly driven by commerce.
Okay. Okay. That don't have your core business attached, they're just-
Yeah, yeah
... driven by commerce?
Yeah.
Okay. Okay, great. Interesting. Questions before we go to News? Okay, Taboola News. You reached $50 million of revenue in 2022. I think you just said you'd hit a hundred million. We were using 80, so you just gave us the number of $100 million for Taboola News in 2023. But you've said in the past that News could be a $700 million revenue business. Can you give us an update on News and whether you still think it can be a $700 million business?
I think what I said is that between e-commerce, Taboola News, and the bidder, each one of them can create $hundreds of millions in incremental revenue over the next few years.
Okay.
So and Taboola News being one of them, I think the pace in which it, it's growing, and there are two ways it's growing. One is more reach.
Yeah.
More devices, primarily, from existing relationship and new ones.
Mm-hmm.
There's about 1 billion Android devices sold a year.
Yeah.
We're live on almost 100 million.
Okay.
So there, there's a lot there. Then the second thing is the ARPU of that device.
Yeah. Okay.
If you think about how OEMs start working with Taboola, a lot of times it's one touch point. It could be a minus one or a lock screen or a wake screen or a notification or an app or a browser. There are so many ways they experiment, and that means over time, we can add more touch points and increase the revenue per device.
Okay.
So I think between those two, we expect this to continue to grow fast. It's-
Okay
... it's so much fun, you know, as we started with culture, it's so much fun to see kind of this, like, startup within Taboola-
Uh-huh
... that we brew from within, taking advantage of all the resources and everything Taboola has to build that business, and it's super synergetic to the core business.
Mm.
The more it grows-
Yeah
... the more traffic we send. And if you think about GenAI and Bard and the risk for journalism-
Yeah
... you know, is that, what's the next wave of traffic?
Yeah.
Who sends the next billion people to publisher sites?
Mm-hmm.
If it's not SEO, because that's capped, and maybe that's going down because of Bard.
Yeah.
If it's not social, who is it? And I think, you know, we'll see a lot more OEM device-type traffic going to publisher site. So I think it's, you know, it creates synergy and moat again for the publishers because we want to send a lot more traffic to them.
Okay. So what is the difference between Homepage For You and this? Homepage For You uses generative AI, whereas the Taboola News was using machine learning. Like, are they different?
So Homepage For You is editorial tool for publishers on their own site.
Okay.
Taboola News is like Apple News, but for Android devices. So it's if you buy a Xiaomi device in England-
Mm-hmm
... it comes with Taboola pre-installed in the device.
It's all the same. It doesn't-
It shows you-
-personalize.
It shows you news you may like on the device. I think you may be thinking about Newsroom, which is that it, that sounds maybe similar.
Okay. But this is when you do Taboola News, it's the same news that goes to every phone. So it's run a schedule.
No, it's still relevant and personalized for the consumer. Just, we sell it to news, Homepage For You, we sell it to publisher sites.
Yeah.
Taboola News, we sell it to OEM device manufacturers like Samsung.
Right.
In this case, the Samsung is the client. Homepage For You, we sell to McClatchy.
Yeah, but I'm asking about the product. Is the product itself identical? It's just who you're selling it to-
It's different because in McClatchy, we only show McClatchy's content.
That's fair. Whereas news-
On Samsung, it could be any one of our publishers-
Yeah
... which is the synergy.
That's true.
This is where if you work with Taboola, one of the benefits is-
Mm-hmm
... you get embedded into Taboola News.
Okay.
If you don't work with us-
It's a good point.
... you don't get embedded.
Yeah. Oh, okay. Yeah, that's actually, that's actually a competitive advantage. Okay.
I know.
Okay. Do you get to take pricing up? I know you get to acquire a premium compared to your only competitor. Can you take pricing up over some of this stuff?
I don't believe there's a notion of pricing up or pricing down because we're very advertiser success focused.
Yeah.
We're only at the end of the day, the machine and our efforts are about is the client happy? The client happy, they will take the price up because they would like more of it.
Mm-hmm.
If they're unhappy, they'll take the price down. So-
Well, you have a rev share round numbers of 35%. Is there any... Can you-- I get that you're drawing revenue dollars by doing all these other-
Yeah.
That grows your revenue. Can you take the rev share number up?
Oh, the rev on the pub?
Yeah. Also-
I think, you know, we say we think that our business can be 40%+, you know, over time.
Okay.
The way margin gets up, there are few ways. One, I think yield-
Okay
... makes it go up because some of our deals have guarantee.
That's true.
So that the margin is lower, then the yield going up will capture more rev share.
That's fair. Mm-hmm.
The second way is if you get to more long-tail and mid-tail publishers, I think there may be opportunities there.
Okay.
And then in some of our other markets, like e-commerce and this diversification of business-
Yeah
... there might be other margin opportunity. But overall, I think, you know, we're comfortable saying 40+ is probably a good number for us.
Okay. Okay. Any questions? Okay. Political. So GroupM, new estimate this last week, up again, $17 billion. Do you guys, just in the US, just, I know you guys are half offshore, but does that, do you benefit from political? Or-
You know, what we-
Either-
... what we tell investors is that, you know, historically, we did see a bump in revenue-
Okay
... mainly video. We don't really - we don't bet on that. Like, it's not, it's not a big swing for us. We don't have Washington kind of -
It's 1% or 2% of revenue?
I don't even know. It's just, it's like, it's like there's gonna be a, a certain bump in traffic and video demand.
I was gonna say traffic, you think would even just go up.
Yeah, there's gonna be some traffic, sure, but also Taboola is fairly big now. It's, it's not-
It's true.
It's not that easy to really swing that thing in any one way.
Okay.
And also, remember, like, if there's a storm, there's traffic. Like, almost every day or other day, there's something in the world.
There's some driver for the traffic.
Yeah. It's gonna be a sports game, a storm-
Mm-hmm
... sometime sad news. All of those things create kind of spike-
And traffic
... mini spikes in traffic.
Too.
So there's not really any big swing in that perspective, and then we do expect some bump in revenue-
Okay
... video primarily, but nothing material-
Okay
... to us.
Okay, great. Generative AI, how are you using it, and where do you put it on your roadmap? 'Cause I know you guys are doing some interesting stuff with gen AI.
I'm surprised we waited, like, 30 minutes to say Gen AI for the first time.
I know. I, I love Gen AI. I love this topic, but... Oh, no, I said it about content, how content-
Right, you did.
... makes you more cluttered. So I did, but-
Right, you did.
Bad rep for Taboola. How are you using it, and where do you see it on the product road?
Right now, our main focus is on the advertiser side.
Okay.
Primarily, we're helping smaller advertisers who come through self-service-
Okay
... to generate titles and thumbnails automatically.
Okay.
The stats we have out is that 1 in 4 creatives is being powered by Gen AI.
Okay.
About 2.5 of the revenue overall-
2.5%?
Percent.
Okay.
Of revenue overall is using Gen AI.
Mm-hmm.
And so one, I think those numbers will go up. And then over time, I think what's gonna happen is, if you think about self-service clients, you're gonna be able to create the landing page altogether for Gen AI.
Personalized landing page.
Yeah.
That's sort of what you're doing for McClatchy a little bit.
And I mean, even more, I think. And then there's also the video part.
Okay
... which is, could you create even videos-
Okay
... using Gen AI, which today is not really high quality.
Right.
But over time, I think video and Gen AI might be building an opportunity-
Oh, this. Okay
... to create video ads for small advertisers, 'cause today they don't have the money to create those.
Yeah. Yeah.
Once that happen,