Taboola, a video recommendation app platform that publishers can put on their sites in an attempt to boost traffic and views, has raised a $10 million third round that reflects the continuing rise of online video ad dollars and the intense competition for them.
In an interview, Adam Singolda, the founder and CEO of Israeli/New York-based Taboola, outlined plans to hire more engineers at the 45-person company and to place its video distribution network on Microsoft's Xbox Live and Google TV, two platforms that are increasingly attracting interest from media buyers as an extension of web-based video ads.
The funding round, from Marker LLC, will go to support Taboola's primary business, the Taboola EngageRank, which claims to create 500 million recommendations daily served to over 130 million users per month.
The list of EngageRank's publishers include pretty much ever major traditional publisher that is trying to build out their respective video businesses to one degree or another, including the online editions of The Wall Street Journal, The New York Times, CNN, Bloomberg, Fox Television, Hearst, Gannet, USA Today, The Hollywood Reporter (which Singolda says tripled its video views year-over-year since using Taboola's system) and others.
While video distribution has largely been focused on attempting to distribute publishers' content in as many places as possible, making sure to track where the videos land to reap the ad benefits and view counts, recommendation and discovery -- and in a sense, targeting -- have become much more crucial lately, given the fact that the world is awash in videos. For instance, YouTube claims that users upload a collective 72 hours of video every minute; the need to get videos in front of the right audience, along the ads that generally support those works, is increasingly crucial to both publishers and marketers.
In the US, eMarketer projects advertisers will increase video ad spending by 54.7 percent and up investments in standard banners by nearly 20 percent. Despite the fact that video is a key driver in display, eMarketer predicts much lower growth for rich media ads, at just over 4 percent, as brands turn to true online video instead.
That's an opening for a company like Taboola, which promises better targeting of publishers' videos.
"Going to a site is like casually walking into supermarket, there's no specific intent other than to buy some food," said Singolda, who was a former Israeli army intelligence officer in charge of encryption. "Discovery is a necessary tool for publishers who want to not only increase the amount of video traffic, but increase the value of that traffic as well."
In connecting viewers to the "right video," Taboola creates and builds profiles of a site's returning viewers. If a viewer goes to the WSJ homepage for the first time, the recommendation engine will suggest some random videos and see what the individual clicks on. After that, the profile is created and works on getting other videos that are ultimately recommended based on subject matter as well as the way the user has watched in the past.
"We use anonymous cookie data that tells us things like, "This person will never watch a 2 minute video on a Saturday," so we know what not to serve the user as well as what sort of content they might respond to," Singolda said. "Knowing what someone doesn't like is almost as important as knowing what they do, especially with video, which can reward or punish in the form of higher or lower engagement and repeat viewing."
By David Kaplan