‘Breadth and depth’: Observers see more pluses than minuses in Vox Media, Group Nine merger

By Max Willens

When venture capital dollars were flowing freely into digital media startups many years ago, audience scale was the north star.

Today, with venture capital long gone, private equity lurking and an industry-level pivot to privacy underway, scale is back en vogue as publishers continue to look for ways to keep advertisers’ attention and founders hunt for ways to provide exits for their original investors.

Consequently, media insiders see a lot to like in Monday night’s news that Vox Media will merge with Group Nine Media in an all-stock transaction. While the two companies reach different audiences using different strengths, observers say those skill-sets should be transferable, giving credence to Group Nine CEO Ben Lerer and Vox Media CEO Jim Bankoff’s pitch that the former can teach the latter about social distribution and video, and the latter can help the former with formats including podcasting and long-form video licensing.

Though the timing of the deal, which is expected to close early next year, may mean that it could take a while to unlock the full potential of the combined companies, the merger also buys them time to figure out a satisfactory outcome for their backers.

“This is Bankoff and Lerer realizing that, to move the needle for major marketers, you need both breadth and depth,” said Matt Prohaska, the CEO of Prohaska Consulting. “It’s sort of a throwback to folks from the late ’90s…What’s different now is people are monetizing it, instead of just reporting phantom traffic.”

Size

Viewed purely through the lens of the startups’ owned-and-operated properties, the merger means an improvement, but not a transformational one. In October 2021, Vox Media’s properties reached 91 million unique users across their desktop and mobile sites, and Group Nine Media reached 42 million, per Comscore. Even if the respective audiences were completely incremental to one another, that total would rank 24th in Comscore’s digital multi-platform property rankings, behind publishers including Red Ventures, Hearst and Penske Media Corporation.

Include distributed video, and the picture changes. Group Nine has long been one of the leading producers of platform video content. Group Nine alone generates 7 billion video views per month, per Nielsen.

Over time, the skills that built those respective audiences could be brought to bear on their counterparts. “Most of the capabilities that Vox, GroupNine, HuffPost, VICE et cetera compete on are extensible to any audience target,” said Rob Gabel, the founder of Tubular Labs.

But if the media mergers or acquisitions that preceded this one involved similar kinds of audiences — BuzzFeed-Complex brought together a ton of millennials; Dotdash and Meredith created an intent media monster — Vox Media and Group Nine Media have lots of distinct audiences. Though there’s overlap in news (Vox, Recode, NowThis) and food and drink (Thrillist, Grub Street, Eater), Group Nine’s The Dodo and Popsugar bring lifestyle ingredients that Vox Media’s portfolio didn’t yet have.

Group Nine’s audience skews more female, while Vox’s skews more male. Vox Media’s audience is significantly more affluent — a majority of its unique …read more

Source:: Digiday