What Apple’s partnership with Taboola means for brands and its ads business

Apple’s expanded partnership with the web ad tech company Taboola will seek to bring new advertisers to Apple News and Apple Stocks. But the deal’s success will depend as much on Taboola’s ability to pitch brands and publishers on its own trustworthiness as on the advertising potential of Apple’s apps. The need for trust stems from Taboola’s reputation as a progenitor of chumboxes—those made-for-advertising (MFA) placements at the bottom of web pages whose content is often comically low-quality. Initial reactions to the partnership, which was first reported by Axios, show the skepticism that many feel toward Taboola on account of its MFA business. Check out the latest Ad Age events and award programs “Apple’s decision to strike a deal with Taboola is shocking and off-brand—so much so that I have started to question the company’s long-term commitment to good customer experience, including its commitment to privacy,” wrote Om Malik, partner emeritus at venture capital firm True Ventures, on Linkedin. The partnership comes as Apple looks to expand ad revenue throughout its ecosystem. Earlier this year, it began testing an AI-powered performance manager for placing ads in the App Store, where much of its current ad revenue is sourced. News and Stocks, however, have yet to see the same success, which explains why Apple is drilling down on these platforms, experts told Ad Age. Apple did not respond to a request for comment. Taboola declined to comment beyond the press release announcing the deal. While many are lamenting Apple’s deal with Taboola, the news builds on a pre-existing partnership in which Taboola sells ad placements on Apple News and Stocks in Australia and Canada. The expansion now includes a bigger piece of the pie in U.S. and U.K. audiences, which previously belonged to NBCUniversal. The media giant remains a reseller for the platforms, it confirmed with Ad Age. Emphasizing the growth it has made to the premium side of its business will be key to Taboola driving more brands to News and Stocks, said Michael Gifis, chief revenue officer for the Black-Owned Media Equity and Sustainability Institute, independent advisor for publishers and ad tech providers and a former executive at Taboola. The company’s premium work has helped it increase annual revenue to $1.4 billion, in large part thanks to a 30-year partnership it struck with Yahoo last year. Gifis expects Taboola to be able to sell native advertising placements, which could appear in-article, below-article and in-feed. Such material tends to contain higher-quality material than chumboxes; it is also the primary placement for Taboola’s partnership with Yahoo. Taboola also recently introduced a program for advertisers to buy these native ad placements on other editorial publishers, including the Associated Press and Business Insider. The value proposition for brands on News includes top-of-funnel KPIs, such as brand recognition and awareness, on account of its being a general-interest destination, said Karsten Weide, principal and chief analyst at W Media Research. On Stocks, where mostly financial services brands will operate, the value will be lower-funnel, as a result of the platform catering to direct-response ads, Weide said. For publishers, the opportunity is more nebulous because Apple has not divulged much information on how it splits up ad inventory on News and Stocks. Paid subscription service News+ has provided an audience lift for quite a few publishers, according to Semafor. But revenue derived from ads placed on the platform is a different story, said Ari Paparo, CEO of B2B media company Marketecture. Apple does not disclose specifics about its apps. Also read: Why the ‘made for advertising’ crackdown isn’t working Apple’s evolving ads business Paparo sees two possible paths for Apple as it seeks to grow its advertising business. The first, which has yet to see much momentum, is by spinning out an ad unit that can be offered in any of the nearly 2 million third-party apps on the App Store. But this option could attract unwanted attention, such as from antitrust regulators, given the power that Apple wields over the App Store. It makes sense, then, that Apple seems to be trying its hand at the other path, which is to expand monetization in its own apps, such as News and Stocks, said Paparo. These platforms run the gamut in terms of their advertising opportunity, from smaller gains offered by Stocks to a potentially massive yet still-dormant ecosystem in Apple TV+. Other products, including its Vision Pro headset, could also eventually be leveraged as advertising hubs. But for now, Apple will focus on Taboola, which, just as for brands and publishers, will need to prove to the tech giant its value as a premium provider. Apple is not only interested in growing ad revenue, but in featuring high-quality advertising from high-quality advertisers, said Weide. Apple likely has strict terms with Taboola about the content within its ad inventory, making it more premium, said Brian O’Kelley, CEO of Scope3, the sustainable ad tech platform. “Taboola, from a future of the business perspective, they recognize that they can’t do MFA anymore,” O’Kelley said, “and so they have to go legit and [deliver] quality, which is good for them in the long term. That’s what they’re doing with Apple. This is the beginning of their move to an upmarket, brand focus.” While details of the partnership were not disclosed, Weide expects it to be organized as a proof of concept, in which Taboola shows that it can satisfy both of Apple’s demands, and in return gets a bigger opportunity in the Apple ecosystem. And for that to happen, it will need to show the tech giant that its notorious chumboxes come nowhere near News and Stocks. “Apple is not going to tolerate an ad for the latest toenail fungus treatment,” Weide said. Contributing: Garett Sloane

What Apple’s partnership with Taboola means for brands and its ads business

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