In the rapidly evolving landscape of digital marketing, advertisers are navigating a challenging environment where traditional channels like social media are underperforming and new technologies, particularly artificial intelligence (AI), are reshaping the way advertising is done. The latest discussions from the Taboola Investor Day highlight a significant pivot among advertisers towards performance-based key performance indicators (KPIs) as they seek to maximize their marketing budgets.
Published on April 10, 2025, the article sheds light on how nearly 75% of advertisers have reported diminishing returns on social media, according to a recent study by Taboola and Qualtrics. This revelation has left many brands scrambling to diversify their advertising strategies beyond the familiar realms of search and social platforms.
Julie Hansen, the Chief Revenue Officer and US CEO of Babbel, articulated the urgency of the situation, stating, "We’ve always allocated a lot of spend to search and social because they worked, but now they’re not working so well anymore. The target audience has gotten smaller, less effective, and more expensive. That’s a huge challenge." This sentiment was echoed by Jeff Ratner, President of Media, Analytics & Data at Quigley-Simpson, who noted that rising costs per click (CPC) and cost per thousand impressions (CPM) are affecting return on ad spend (ROAS) and customer acquisition cost (CAC).
As advertisers grapple with these changes, many are looking for new channels that can generate measurable and scalable performance results. Tim Stevens, COO of QuinStreet, emphasized the importance of focusing on performance-based ad solutions, saying, "Our clients measure us on the basis of their CAC. As long as we’re hitting that, our budget is unlimited. We’ll spend as much as they can take and as long as it performs." This shift in mindset reflects a broader trend where performance metrics are becoming the primary focus of advertising strategies.
Justin Chase, EVP of Media at Eversana, highlighted the potential of AI in this new advertising paradigm. He remarked, "Thinking strategically about how you’re going to move towards performance is a phenomenal strategy. The timing is perfect to take advantage of this shift." This is particularly relevant as AI continues to transform search experiences and advertising processes, prompting brands to rethink their strategies.
At the heart of this transformation is Taboola's new platform, Realize, which aims to provide performance opportunities across the open web. Chase described Realize as a game-changer, stating, "If we can map through the intent-based targeting that Taboola now offers without spending as much as we have on patient propensity models, this changes everything for us." Babbel has already seen the benefits of this new platform, achieving a 35% increase in ROAS after just six months of testing.
Similarly, Quigley-Simpson reported a 35% increase in ROAS after implementing Realize with a client since the beginning of 2025. Ratner emphasized the importance of having access to brand-safe, transparent, and accountable inventory, which Taboola and Realize provide. He stated, "We evaluate partners on their access to brand-safe, transparent, accountable inventory." This focus on transparency and accountability is becoming increasingly vital as advertisers seek to optimize their ad budgets.
As the advertising landscape continues to evolve, the integration of AI tools with performance metrics is opening up new avenues for advertisers. The combination of premium supply, unique data, and AI capabilities allows for more efficient spending and better targeting of potential customers. The panelists at Taboola's Investor Day underscored the need for advertisers to adapt to these changes, with a clear emphasis on performance-driven strategies.
In conclusion, the shift towards performance-based advertising is reshaping the industry as advertisers seek to navigate a landscape marked by dwindling returns from traditional channels. With AI playing a pivotal role in this transformation, brands are now more focused than ever on measurable outcomes and efficient spending. As highlighted by the insights from the Taboola Investor Day panel, the future of advertising lies in the ability to adapt to these changes and leverage new technologies for better performance.
