Taboola and Outbrain further reduce their projections for 2022 in the face of economic uncertainty and falling planning.

The giants of web content recommendation in general and media in particular have readjusted their expectations in the second quarter accounts they have just presented: Taboola has left its turnover target in the range of 1,434-1,478 million dollars, down from the 1,499-1,539 it set in the first quarter, which in itself was already lower than the forecast of 1,666-1,678 it published at the end of 2021. 666-1,678 it issued at the end of 2021; and Outbrain has substantially cut its operating profit projection from $55m on the first quarter accounts, already down from $98m at the end of last year, to “at least $18m”.

These movements respond to a clear deterioration of the business of both companies due to the reduction of advertising investment that they manage, in the context of economic uncertainty generated by factors such as inflation, the reverberations of the invasion of Ukraine or problems with supply chains. They share poor predictions with the big platforms they compete with, but not with the big advertising groups, which are actually improving their revenue forecasts for the year thanks to the resilience of big companies’ brand advertising budgets.

Outbrain, which reported a loss of $10.3 million in the second quarter, worse than expected even though its revenues rose more than analysts expected to $250.9 million, is the worst performer so far. At the end of July it had already laid off 38 people, around 3% of its staff of around 1,100 employees, among other things because its stock market value is not rebounding and has accumulated a drop of more than 70% compared to its starting price a year ago.

Taboola’s accounts are better in that its gross profit and operating profit were better than anticipated in the second half of the year, totalling $116.4 million and $34.2 million, respectively. CEO Adam Singolda noted in the results presentation that both the effects of the war in Ukraine and the slowdown in advertising spending in the US had stabilised, and that in any case its diversified business portfolio had helped to sustain the figures. On the latter, he cited an upturn in its e-commerce turnover and notable growth at Taboola News.

In any case, both companies are already operating on a cost control regime for the second half of the year, especially with the prospect of the third half of the year not being particularly good. Outbrain expects to save up to $12 million over the remainder of the year with these adjustments and Taboola has not specified a figure but wants to make these reductions compatible with investment in areas where it sees growth potential.