Stacker to Exceed $10 Million; May Seek Partner for Scale
By: Christiana Sciaudone
Content distribution startup Stacker has been profitable from day one and has operated independently since the four founders started in 2017.
Now that it’s looking to double sales growth next year, co-founder Noah Greenberg says it might be time to find a partner.
“I’m thinking a lot about how are we going to 10x the number of customers?” Greenberg told A Media Operator. “We have built the infrastructure and have proven out demand and interest and product market fit for both sides. So now it’s, how do we scale this?”
But what exactly is Stacker, how does it make money and why should anyone trust it? After all, that’s what any potential outside investor wants to know.
A Little Background
Think of Stacker as a kind of 21st century interpretation of the Associated Press, using technology and brand-supported journalism versus ponies to distribute the news. There are key differences.
Stacker is an intermediary between the brands that create content—held to strict journalistic standards—and publishers like Lee Enterprises, which owns local papers such as the St. Louis Post-Dispatch. Publishers get free access to any of the stories that are written. Brands that have hired former journalists to write articles pay a flat fee every month to submit work deliverable to publishers. That fee comprises half of Stacker’s revenue, expected to exceed $5 million this year. The other half comes from syndication and content created by Stacker with brand data.
All stories go through a rigorous evaluation and edit to ensure they aren’t ads or marketing in disguise. The 15 journalists in the Stacker newsroom, who also do some original stories, ensure accuracy, transparency, and fairness.
“The hole that we identified over the past seven years that we are filling is on one hand, realizing news outlets are looking for more content that they can run on their site, and increasingly, organizations that you would not think of as publishers are investing a lot of money into content,” Greenberg said.
Companies like Lyft and Experian have hired professional journalists to take their data and build stories around them. What works about the model is that it’s not about needing ad dollars as compensation for creators and it’s not necessarily about marketing performance, at least not in the short term.
“Ten years ago, the content coming out of brands was marketing,” Greenberg said. Brands are now using content to drive authority. “It’s content to be proud of today, whereas a decade ago, that might not have been the case.”
The Business Now
Stacker, which has 50 employees, syndicates to 3,000 publishers in the U.S. and has about 100 brands contributing content. Their RSS feeds connect directly to a publisher’s content management system with no need to copy and paste. Stacker also ensures that the rights to use images are secured beforehand.
The content helps fill space and allows editors to send in-house reporters out to do real reporting rather than regurgitate whatever they can gather online from social media, Greenberg said.
For those who don’t have sports reporters, for example, but want coverage on the opening week of the NFL season, Stacker can help provide that via FanDuel or DraftKings.
“So long as it’s not an ad for how great FanDuel or DraftKings is, sure, that’s a great story to run,” Greenberg said.
Total revenue for the company is set to exceed $10 million this year, with half of that coming from the newswire—that’s the sales segment Greenberg wants to see double in 2025. The rest comes from the newsroom, which helps brands create content, and syndication relicensing revenue for news aggregators like NewsBreak and MSN.
Stacker is ready to bring more brands into the platform, but that’s harder to do without backing from venture capital, something the founders eschewed at first. They didn’t want the pressure of taking on millions and being forced to grow too quickly, pointing to Buzzfeed and Vice that were good businesses but didn’t warrant being unicorns, Greenberg said. (Buzzfeed News shut down last year and Vice went bankrupt, though it appears to be planning a comeback)
But now, Stacker is planning to get more aggressive, Greenberg said. The company recently hired a marketing director for the first time, noting that it had underinvested in marketing and sales. It recently refreshed its website to better explain what Stacker offers—previously, it highlighted the content, making readers think Stacker itself was the producer and publisher.
It’s Not That Easy
So, what could go wrong? With $1 million, the technology at Stacker could easily be replaced, Greenberg admitted. However, Greenberg believes, “our moat is our distribution network.”
It has taken years of building credibility and heavy lifting to sign licensing agreements with the major publishers—McClatchy and Tribune as an example—and integrate the newswire into their CMS.
Publishers may also give up on using the tool because with so much content, it can be hard to find what they want. That’s something on Stacker’s improvement to-do list.
Another challenge is that brands may lack a budget for a new concept and have a dearth of patience. They may not have the money to experiment, and if they do, it’s for a test run of six months that won’t show the quick results often expected. To Greenberg, this is a lifetime investment, one that builds legitimacy, authenticity, and authority of brands, and shouldn’t be expected to result in an immediate return.
He cited a maker of erectile dysfunction medication who pointed out that no one is going to just convert by seeing an advertisement from a company they’ve never heard of. But if they’re reading interesting journalism about healthcare trends, that can help establish the brand, much like Zillow did over a decade ago.
“Love it or hate it, these brands are going to be pouring money into producing content, and their goal for that content is to find an audience and over time, drive authority or trustworthiness for their brand. And there are going to be publishers that want free content,” Greenberg said.
