The COVID-19 pandemic has spurred many business challenges, with every industry being impacted one way or another. Digital publishing is no different.
Whether companies have experienced negative impacts or accelerated growth, mergers and acquisitions (M&A) are top of mind for all executives. Outside of the broadly defined tech category, media and publishing has been one of the hottest industries experiencing M&A over the course of 2021 as the landscape continues to shift.
Axel Springer has been a clear leader for publishing M&A. After acquiring Morning Brew in 2020, Europe’s largest publishing house carried on by acquiring both Politico and Protocol earlier this year. In nontraditional fashion, tech company HubSpot acquired The Hustle in February, showing that firms outside of publishing see the value in a media company with a strong identity.
Even legacy publishers like Verizon Media Group were acquired by Apollo for $5B. The acquisition, under the new name Yahoo, includes all Yahoo properties (Mail, Sports, Finance, etc), TechCrunch, AOL, Engadget, and interactive media brand RYOT.
Why is Media and Publishing Prime for M&A?
With every business decision, there are key motivators. For a publisher, it could be the usual suspects: meeting ad revenue or subscription goals, expanding content offerings to video or audio, expanding areas of coverage to new verticals, or declining readership.
But, aside from all these more obvious reasons, there is an overall shift in the focus of the media economy. Publishers need to prioritize meaning and identity, positioning themselves as media brands and standing for values. These values can come by way of leaning into your community and listening to your readers.
It’s not just about the content. Publishers have access to incredible amounts of first party data that stems from readers engaging with content while on-site. This level of first party data increases the value of publishers, making them ripe for opportunities to merge or be acquired. If strong brand identity is established, publishers can continue to thrive and not seek the assistance of a merger to address a business issue.
M&As Impact on Digital Publishing
When two companies merge, there are always adjustment periods and growing pains. As we’ve seen with Vice and Refinery29, there can be layoffs, as editorial priorities change under new leadership. However, these shifts in dynamics typically have long-term benefits.
But, to be a media brand, digital publishers need to do more than just report.
Yes, content is at the center of a media company, but just reporting on the news is no longer enough to get ahead in the attention economy. The benefits of M&A for a publisher range from creating greater access to resources (like audience development teams) to synthesizing insights from first party data. By leveraging these new capabilities, digital publishers can embody DTC businesses, and develop content that matters to their audiences – all while generating loyalty from readers.
This isn’t something all publishers are capable of doing on their own, so doubling down on technology, or being acquired by a publisher that already has these systems in place, is the only seamless way of leveling up their business.
It’s not just publishing that is seeing the impacts of M&A, but M&A is undoubtedly evolving the media landscape. With acquisitions, we’re seeing larger publishers get more powerful because they are community and insight-driven, prioritizing content offerings based upon what they are learning from subscribers and other audiences.
In the new media economy, if you are just creating content, that’s not enough. Publishers must evolve into media brands, forming deeper connections with their audiences rather than solely reporting on the news.
At OpenWeb, we help publishers unlock the ability to drive audience growth and foster lasting communities. Learn more about our suite of publisher products to understand how we help premium publishers become data-driven, connect deeper with their audiences, and keep users coming back.
*Disclaimer: Yahoo and Refinery29 are both publishing partners of OpenWeb.