Ranjan here, and today I'm talking Taboola and Outbrain.

Most of my work in media has been on subscriptions and branded content, so I've never played in the depths of ad-tech darkness. But, I spent seven years trading currency derivatives and am well versed in the art of arbitrage. This is what makes a "Related Content" module so intriguing for me.

A Few Definitions

First: Let's define arbitrage as leveraging an inefficient set of systems to make a riskless profit, usually by buying and selling the same asset. The mythical free lunch that economics tells us does not exist.

Second: Let's define Related Content Module, I'm talking about those horrifying grids of images and text that lurk below articles, working to disgust, terrify or titillate you into a click. When I brought this post up to my co-host Can, he referred to me this masterful 2015 piece from the Awl, "A complete taxonomy of internet chum".

Third: How the Awl defined chum (and make sure to take a look at the image above again before reading):

Chum is decomposing fish matter that elicits a purely neurological brain stem response in its target consumer: larger fish, like sharks. It signals that they should let go, deploy their nictitating membranes, and chomp down blindly on a morsel of fragrant, life-giving sustenance. Perhaps in a frenzied manner.

All Aboard

I want to take a journey with you beyond the titillating images. I want to walk together through the ad-tech underbelly of this entire weird commercial infrastructure. Who are the people and companies that subject us to this? Who makes money and how?

So let's start with the Washington Post. Yes, the venerable journalistic institution that will prevent democracy dying in darkness serves up grids of chum. For this journey, I started on an article about William Barr's Senate testimony and this is what I got at the end:

Top Left Image - Search Arbitrage

Let’s start with "It's Here! Research 5G Networks" from Yahoo! Search.

This blew my mind. If you click it, you actually get a page of Yahoo search ad results for the term "5 G net":

So why the hell is Yahoo posting a chum ad that leads to a search results page (and why is there a space between "5" and "G"?) Credit to The Margins reader Mat Yurow for helping me understand the arbitrage mechanics here.

The Math

In plain English, and note, the following dollar amounts are completely hypothetical:

If I click this chum ad, Yahoo might pay Outbrain 10 cents for the click. Outbrain, as the middleman, would then pay WaPo 3 cents out of that.

Let's say 100 people click the Outbrain Yahoo! Search ad, they end up on the above page that is all search ads. If 2 of those people click on ads for these 5G services, which Google's Keyword Planner tells me are conservatively at $10.00 per click, you can start to get a sense of how this works.

Again, I have no idea the exact numbers here, but in this hypothetical example, for every 100 clicks, Yahoo would make $20, and pay Outbrain $10 of that, who would then pay WaPo $3. It's nearly risk-free and it's genius. And depressing.

Top Center Image - Affiliate Marketing

Okay, box #2 - NY drivers with no tickets are surprised - from customertoday.org

The Awl pointed out how a lot of these ads incorporate your location in some cheap way, and this was a good example (“Hot singles in your area!”). This chum ad was fairly straightforward. Clicking it takes me to a site called customertoday.org, which then takes me to another site provide-insurance.com, which appears to be an insurance quote aggregator of some sort. This all felt fairly innocuous.

The only suspect thing is I couldn't obtain any corporate information for any of these sites (via looking at the privacy policies, whois searches, etc). There are no people to be found in this specific chum chain. Just some fly-by-night affiliate marketers.

Top Right Image - Slideshow Arbitrage + Real People!

The Wealthiest Actors in Game of Thrones - from Bob's Hideout

This is where it gets really good. This click led to the classic, ad-plastered, slideshow (Henry Blodget was a visionary!) about the net worth of various Game of Thrones characters.

For the unfamiliar, the arbitrage tactic here is straightforward. I count 9 ad units on the page. There are 32 "slides" and each one refreshes the entire page. So with each click through the slideshow, the page serves 9 ads on each click. 32 pages like this means a potential of 288 ads served.

The arbitrage here is Bob's Hideout just needs to keep the per-click rate it pays Outbrain (probably a few cents) to less than the revenue they will receive for displaying those 9 ads when the reader lands.

Finally, some real people

Here's where things get really fun. The Bob's Hideout About Us page tells us this is a property of the Wazimo Media Group.

So let's go to Wazimo.com, where the brand promise is “Content that Captivates, Powered by Unparalleled Technology”.

Wazimo has a 12 sites like Bob's Hideout. One, called ParentzTalk, is a "virtual village of knowledgable writers” to make parenting easier. Graduatez is a site that makes helps college students from "application to graduation". There's Penguin MD (animals), Simbaly (beauty) and a few more.

They advertise 1.7 billion monthly ad impressions and 45 million monthly users. There are sections about machine learning and brand safety. They have an impressive list of partners that include most big ad-tech companies. This is all legit. Then we get to a large number of employee profiles. There are real people! A big team based in Tel Aviv.

That's the thing that always blows my mind with internet chum: there are real people making real decisions (and a lot of real money) all throughout the chum supply chain.

The author of that Washington Post article is not mentally processing the chum grid that follows his story. Every player in the chum chain manages themselves from the end product. No one owns the worms and bikinis and secret pills. But it's all right there, in front of our eyes. It’s all one product.

Bottom Left Image - Hidden Content

Next stop: His life after the NBA - Coolimba

This site is another Wazimo production. It's a 40 slide presentation on life after an NBA career (things like "LaRue Martin Works for the UPS as a Community Services Manager" and "Bryant Reeves: Raises Cattle in Oklahoma").

This follows the Bob's Hideout slideshow pretty well, but there is one odd element. Coolimba is a site to “inspire” home design ideas.

All the posts are things like "A Black and White Bathroom Is A Classic" or "This Singapore Socialite's Closet Will Give You Major Closet Envy".

But we ended up on this random NBA-related, chum-churning slideshow that is hidden deep in the folder structures. Hiding extra chum content in hard-to-find places on your website appears to be a standard tactic (we'll see it again in our final example).

Bottom Center Image - A Real Ad!

The device that has revolutionized the hearing aid - EarGo

This one almost felt weird...because it's just an actual ad for a product. Clicking the chum image leads to a page that sells a product. True to the "headline", it's a new type of hearing aid (that's even been covered by the NYT). How odd.

Bottom Right Image - Hidden Content

The final stop: Stars of the 1970s/80s Who Are Still Millionaires Today - Investing.com

This last click brought us something new. First, the URL could fell empires as it clocked in at 1552 characters:

Next, clicking through leads to a slideshow article with 7 ad units per page, on 91 slide article.

Where it gets interesting - Investing.com certainly seems like a domain with authority. It turns out the domain name does have some serious value, as it was purchased by a business called Forexpros back in 2012 for $2.45 million!

The Investing.com site itself feels like a legitimate financial news and data portal. A clickaround led to some well-written financial analyses and standard terminal-like data displays. This is a good site!

But then they have the subdomain of news.education.investing.com that provides us with gems like:

So why would a perfectly reasonable financial media site risk their reputation by heading down the path of chum arbitrage? Well, living on a subdomain helps keep the content separate. But also, Bloomberg.com has Taboola modules, and we started this journey at a Washington Post article. Throughout the entire media industry, the money is just too easy. I still remember back in 2014 a friend at Time Inc told me "you would not believe the money involved" in a big deal they signed with Outbrain (which end up being reported at $100 million).

Soapbox

If you've made it this far, thank you for taking this journey with me. If you would please allow me to conclude this on a soapbox:

Every publisher that allows for one of these modules should be thought of as responsible for the content. Those globular masses and secret brain pills are not an ad-tech byproduct. They are the creative output of the publishers who present them. These are your websites.

There is widespread organizational buy-in behind the cognitive dissonance that is an Outbrain module residing below some fourth-estate journalism. Everyone is responsible. Journalists should not say "it's a business thing" and we should not collectively say "well, I guess it supports journalism".

I get that it seems like the perfect supplementary income for any media organization. An extra injection of revenue you try to not think about. It's a win-win-win. As we just saw, for every click, Investing.com makes some money, so does Oubtrain and so does the Washington Post. Everyone is a winner.

Except the reader, who just wasted their time and attention. And the end advertiser whose ads are being unknowingly served on a trashy subdomain. And society. And liberal democracy. And truth. And......

A Song

This post got very long so I’ll skip the What I’m Reading section and jump straight to a song (a lot of you clicked the last one!). I’m excited about The National’s new album that’s coming out on May 17th. The first song of theirs that I really got into was Mistaken For Strangers.

“Showered and blue-blazered, fill yourself with quarters”

I would listen to it while still working in finance. It’s about selling out to a corporate existence and your old friends no longer recognizing you. I would walk around New York, listening to it on my new 1st-gen iPhone, thinking “this is totally me”. So I left finance…..

….and got my MBA. And went to the Financial Times. And now work on content strategy for corporate clients. But hey, I’m writing a Substack newsletter 😀.