Companies often engage in media buying by acquiring different types of media house, which are platforms that produce and distribute content to a large audience. There are various types of media houses, including those focused on news, entertainment, lifestyle, and more. By acquiring these media houses, companies can leverage their extensive user base, data-driven consumer insights, and content creation expertise to introduce new products and services in different categories. In the past year, The Good Glamm Group, an Indian content-to-commerce company, has made a string of acquisitions totaling almost Rs.1885 Crore, including digital media brands like Plixxo, ScoopWhoop, BabyChakra, and MissMalini Entertainment, which are all examples of different types of media houses. MissMalini, in particular, is a well-known celebrity media and influencer talent management network.
Other instances where large companies acquired media housesÂ
HubSpot acquired The Hustle
HubSpot reportedly engaged in media buying with its $27 million acquisition of The Hustle, which was established by Sam Parr in October 2021. The Hustle is a media house that has worked to create a newsletter, Trends, a SaaS platform, and My First Million, a popular podcast presented by Parr and co-host Shaan Puri. The Hustle was rumored to generate $10–$12 million in sales, indicating a 2.25x–2.7x purchase price multiple..
Penn National Gaming acquired Barstool Sports
Penn National engaged in a media buying transaction when it paid $450 million in January 2020 for Barstool Sports, a digital media firm established by Dave Portnoy in 2003 and majority-owned, at the time, by The Chernin Group. Barstool creates sports and pop culture content and had a revenue of $90-$100 million at the time, resulting in a price/revenue multiple of 4.5x-5.0x.
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Robinhood acquired MarketSnacks
Robinhood, a no-fee stock trading firm, made its first acquisition by purchasing MarketSnacks, a millennial-focused media brand. This acquisition may appear unusual for the leading fintech company valued at more than $5 billion, but it seems a sensible decision considering Robinhood’s growing ambition to become a one-stop-shop for the needs of young investors.
JP Morgan purchased The Infatuation and Frank
JPMorgan Chase recently announced the acquisition of two platforms, The Infatuation and Frank. In addition to providing restaurant reviews and dining guides in 50 US cities, The Infatuation also offers opportunities for media buying. Meanwhile, Frank is a college financial planning platform that helps students access student assistance, financial guidance, and affordable online programmes for college credits. With this acquisition, JPMorgan Chase gains access to Frank’s client base of over 5 million students at 6,000 schools and institutions in the United States, as well as The Infatuation’s advertising and media buying capabilities.
How can this strategy help businesses scale?
Acquiring a media house through media buying lets businesses access an extensive audience base and specific communities. This strategy can help companies with customer acquisition at the lowest cost. For instance, The Good Glamm acquired Plixxo and MissMalini, which not only have a large following in the influencer arena but also have expertise in media buying. Thus, The Good Glamm can utilize influencer-led marketing for their new line of products through content to commerce channels, with the added advantage of leveraging the media buying skills of their acquired media houses. Further, these media houses come with their own set of special skills, such as creativity, ability to churn out large volumes of unique content, different forms of digital marketing abilities, technical knowledge on how to disseminate different kinds of content, and media buying expertise. Companies can use these special skills to build a hub for knowledge and specific types of content, while also benefiting from the media buying capabilities of the acquired media houses.
What’s in it for the business that is buying?
The Indian market doesn’t have the depth where one brand or category can make a thousand crores. A brand that deals with skincare, beauty products, or lifestyle products usually generates a maximum revenue of Rs.500-700 crore. If you wish to create a company that generates $1-billion, you could have 8-10 brands, each generating Rs. 500-700 Crore. A business that is buying media houses can accelerate revenue generation by scaling and expanding themselves, as well as the brands they’ve acquired through content to commerce approach.
Buying a digital media house or content-based brand means you will have a library of sharp, targeted content, to leverage your reach and obtain more consumers to buy your products.
Targeting customers through content is the most practical and cost-efficient way of grabbing their attention. They can combine product exposures within content pieces that are contextual to the story that the user is reading. Thus, they can expose prospective customers to the products directly.
What’s in it for the business getting bought over?
The kind of acquisition Good Glamm has done in the last 12 months will certainly help the acquired brands as they will receive hefty investments to grow and expand. Moreover, they now benefit from the expertise of professionals from different or similar industries.
Brands acquired by a billion-dollar business can also have access to broad offline distribution networks spanning thousands of points of sales terminals, including those of top media houses in India. And, the best part is that all the acquired digital media platforms can continue to work as independent brands and media houses.
These brands require phenomenal brand building to create a memorable picture in people’s minds, and under the banner of a unicorn or house of brands, they can utilise their expertise in branding, marketing, and advertising to establish themselves as a brand that stands out from the rest. Additionally, the top media houses in India that partner with these brands can offer them unique advertising opportunities to reach diverse audiences across the country.
Most importantly, these brands will now have to worry less about the technical aspects of keeping a business afloat, and can now focus on what they do best i.e. create great content. With the support of a billion-dollar business and the top media houses in India, the acquired brands can now focus on growth and innovation, while leaving the technical and operational aspects to the experts.
Is this a feasible strategy, and, if so, for what kind of businesses? Â
The internet is here to stay, and in-home consumption will rise. Today’s internet market enables many new companies to emerge and grow. As a result, conventional brands must keep an eye on the future, as more customers are prepared to take chances with new brands, trends, and ideas.
In India, the D2C (direct-to-consumer) revolution is still in its early stages, with the beauty and personal care categories being underserved online. Apparel, technology, and food continue to dominate online purchases. As a result, there is enormous space for expansion, and acquiring brands that will push their products can help a business to become a billion-dollar entity.