NEW YORK - Taboola (NASDAQ:TBLA), known for its content recommendation platform, has launched Abby, a generative AI technology aimed at simplifying advertising campaign management. The announcement made today introduces Abby as a tool that enables advertisers to build and launch advertising campaigns with ease, even for those with no expert background in the field.
Abby is designed to streamline the advertising process by offering a conversational interface that guides users through setting up various aspects of their campaigns, including budgeting, targeting, creative work, and optimization. The technology is built on Taboola's decade-long experience in the advertising industry and is available on a network that reaches over 600 million daily active users.
The introduction of Abby comes at a time when the adoption of generative AI in advertising is on the rise, with 91% of advertisers reportedly using or considering such technology to enhance efficiency and sales. According to Taboola, campaigns set up with Abby can go live 75% faster than those managed manually. This efficiency is due to Abby's ability to ask simple questions and automatically create media plans tailored to various marketing objectives, such as driving purchases or increasing brand awareness.
Abby's generative AI capabilities extend to creative features as well, allowing advertisers to edit images and create captions without the need for specialized software or expertise. Adam Singolda, CEO of Taboola, emphasized that Abby democratizes access to advertising, making it as easy as having a conversation with an ad industry expert.
Taboola, which serves around 18,000 advertisers and reaches nearly 600 million daily active users, has established itself as a significant player in the online advertising space. The company has formed long-term partnerships with prominent digital properties like Yahoo and CNBC, and it is also a leader in e-commerce recommendations, facilitating over 1 million transactions monthly.
The announcement of Abby underscores Taboola's commitment to leveraging artificial intelligence to enhance advertiser success. However, as with all forward-looking statements, this announcement contains inherent risks and uncertainties, and there is no guarantee that the plans and objectives behind Abby will be fully realized as anticipated. This news is based on a press release statement from Taboola.
In other recent news, Taboola has seen considerable growth in its financial metrics despite a net loss of $4.3 million in the second quarter. The company reported a 21% increase in ex-TAC gross profit, reaching $149.5 million, and a 138% surge in adjusted EBITDA to $37.2 million. Furthermore, Taboola's free cash flow showed a year-over-year increase of 237%, totaling over $26 million. The company's Q2 revenue increased by 29% year-over-year to $428.2 million.
In addition, Taboola has expanded the availability of its Maximize Conversions bidding technology to all advertisers, which has led to a significant increase in campaign conversions. Benchmark, an analyst firm, has adjusted its outlook on Taboola, reducing the price target to $5 from $6, while maintaining a Buy rating. The firm expects Taboola's core business to return to a normalized annual growth of 10-15% due to increased platform spending and improved margins.
These are the recent developments for Taboola, which has reiterated its 2024 guidance, projecting accelerated growth, with ex-TAC expected to reach $667 million, and adjusted EBITDA and free cash flow expected to double the 2023 figures.
InvestingPro Insights
Taboola's launch of Abby, its new AI-powered advertising tool, comes at a crucial time for the company as it seeks to bolster its market position and financial performance. According to InvestingPro data, Taboola's revenue growth has been robust, with a 28.96% increase in the most recent quarter. This growth aligns well with the company's innovative push in AI-driven advertising solutions.
Despite the promising revenue growth, Taboola faces some financial challenges. The company's operating income margin stands at -2.21%, indicating that it is not yet profitable on an operational basis. However, an InvestingPro Tip suggests that analysts predict the company will be profitable this year, which could be partly due to the potential success of new offerings like Abby.
Another InvestingPro Tip reveals that management has been aggressively buying back shares, which may signal confidence in the company's future prospects and its AI-driven strategy. This corporate action, combined with the high shareholder yield, could be attractive to investors looking for companies that prioritize shareholder value.
For those interested in a deeper analysis, InvestingPro offers 6 additional tips for Taboola, providing a more comprehensive view of the company's financial health and market position.
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