Israel and the Chumbox

Google built the internet's biggest ads and Israel built the internet's weirdest ones.

While Israel is no stranger to punching above it's weight, this phenomenon is especially visible in the ad tech ecosystem, in which I now work. While they've produced some more "normal looking" ad infrastructure companies, their most famous (and successful) creation might be the "chumbox" - that grid of nightmare thumbnails at the bottom of news articles.

The name comes from "chumming" — dumping dead fish guts into the water to attract bigger fish. Perhaps the most infamous idea to emerge from this phenomenon was the "one weird trick" headline which dominated chumboxes around the web for years. A designer named John Mahoney coined it in 2015 and published a whole taxonomy:

• A "Sexy Thing" featuring images of women or headlines alluding to sex scandals, usually in conjunction with the "Localized Rule" (geotargeted headlines)
• Beauty, health, and medicine (or alternative medicine), such as a "Skin Thing", "A Pill", "Weight Loss Thing", or "Miracle Cure Thing"
• Unusual or disturbing imagery, such as a "Deeply Psychological Body Thing", "Weird Tattoo", "Extreme Body Thing", or "Disgusting Invertebrate or Globular Mass Presented as Weird Food"
• Standard tabloid journalism topics, such as a "Celebrity Thing" or "Money Thing"
• "Old Person's Face," used to advertise to older readers and often combined with other themes, such an anti-aging "Skin Thing" or retirement fund "Money Thing"

Despite their unsavoriness, by 2016 chumboxes were on 41 of the top 50 news sites including CNN, Fox, BBC, and The Guardian. They'd come along at a tough moment for the publishing industry. US newspaper ad revenue fell 21% in 2009 alone and never recovered. Print circulation has dropped by an estimated 80 million since 2005 — a 70% loss. Classifieds had migrated to Craigslist, and nobody had figured out how to make digital pay. Many referred these chumboxes as a "necessary evil" - chumboxes generated around $1.6 billion a year to the publishers they served.

Two companies dominate this format: Taboola and Outbrain. Both were founded in Tel Aviv a year apart. Amusingly, when the CEO of Taboola claims he's "never heard the term 'Chumbox.'" Frequently called the 'Ross and Rachel of internet advertising,' the industry constantly speculated on if they'd merge. They eventually made an attempt in 2019 that epicly failed with Taboola cititing Outbrain's "underinvestment" and Outbrain citing Taboola trying to change the deal midway through "similarly to how they changed agreements for publishers earlier this year."

Mobile game ads are a similar story - those fake interactive demos inside ads traces back to ironSource, a Tel Aviv company founded in 2010. ironSource came out of "Download Valley" — a cluster of companies in the late 2000s that made money bundling adware and browser hijackers with free software.

ironSource's first product was called InstallCore — a cross-platform installer and ad delivery system. They eventually pivoted into legitimate mobile ad tech: mediation, in-app bidding, playable ads and got big enough that Unity bought them for $4.4 billion. At that point the majority of the top 100 mobile games used their platform.

Okay.... but why?

Before any of this, Israel already had a huge performance marketing scene. Poker affiliates, forex lead gen, download monetization and a pipeline of engineers coming out of signals intelligence units like Unit 8200.

But there's a concept in Israeli culture called balagan — it roughly means productive messiness, a comfort with chaos and disorder. Paired with chutzpah — the audacity to build something ugly if it works — and you get a culture that's temperamentally suited to building ad formats the rest of the industry was too squeamish to touch. Israeli founders grew up in a culture where directness is the default. When your whole business culture rewards bluntness over politeness, you're going to be more willing to put a grid of nightmare thumbnails at the bottom of the New York Times if it moves $1.77 billion a year.