December 5, 2023

Active Interest Media Acquires The Taunton Press

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Now let’s dig in…

AIM scales through M&A

Big news out of Iowa yesterday with the announcement that Active Interest Media (AIM) had acquired The Taunton Press. Both businesses serve passion-driven hobbyists in a number of different niches.

In an interview with A Media Operator, newly promoted Chief Operating Officer, Brian Van Heuverswyn wouldn’t talk any numbers regarding revenue or what the financials were for the deal, but he did say that, “we’re very excited and thrilled to have the Taunton brands as part of the portfolio.”

As Van Heuverswyn explained, the two companies had overlapping coverage areas across different niches. For example, Active Interest Media has Woodshop News, Popular Woodworking, and Woodsmith. In that same category, Taunton owned Fine Woodworking.

According to a press release announcing the deal:

The acquisition of The Taunton Press aligns several core markets and allows AIM to expand its mission of inspiring an ever-growing audience of enthusiasts to enjoy their hobbies and interests. This strategic move effectively doubles AIM’s reach and influence across gardening, woodworking, and homebuilding.

“AIM and Taunton are closely aligned on several important fronts. While the symmetry of many of our core markets is obvious; woodworking, gardening, and homebuilding; there are many other similarities,” notes Andrew Clurman, AIM’s President and CEO. “Strategically, like AIM, Taunton has been aggressively pursuing the creation of new digital products, memberships, and online learning to better serve their audiences. Most importantly, Taunton shares with AIM a commitment to growing and promoting both the communities we serve, and our fantastic teams dedicated to that mission.”

But let’s take a step back. What is Active Interest Media? It’s the first time I’ve written about it, so I was excited to learn more.

AIM was founded in 2003 by Andy Clurman and Efrem Zimbalist III. With the financial backing of Wind Point Partners, the team began acquiring a number of different publications. As Van Heuverswyn said, “it was well over 60 acquisitions to build up AIM when it was private equity owned.” Which is actually how he found himself at the company.

In 2015, AIM acquired August Home Publishing Company, where Van Heuverswyn had originally worked. Further expansion came when it bought a number of brands through the F&W Brands bankruptcy. By 2020, AIM had grown to five divisions. “But as private equity is wont to do, they wanted to divest,” Van Heuverswyn explained. And so, in 2020, AIM sold off three of the divisions. According to the release at the time:

Pocket Outdoor Media (POM), the leading endurance sports media platform, today announced the acquisition of the Healthy Living, Fitness, and Outdoor divisions of Active Interest Media (AIM), one of the world’s largest enthusiast media companies. The acquisition by POM coincides with the closing of their Series A investment from JAZZ Venture Partners, a global investment firm based in San Francisco, with participation from NEXT VENTŪRES, and Zone 5 Ventures.

Included in the AIM acquisition are: Yoga Journal, SKI, Climbing, BACKPACKER, Warren Miller Entertainment , Oxygen , IDEA Health and Fitness Association, Clean Eating, Vegetarian Times, Better Nutrition, NatuRx, Muscle & Performance, Nastar, Fly Fishing Film Tour, National Park Trips, and SNEWS.

Pocket Outdoor Media rebranded to Outside Inc. in 2021. Also in 2021, B&W Communications, a new company launched by AIM’s co-founder & CEO, Andy Clurman, bought 100% of the shares owned by Wind Point Partners.

So, why the big history lesson? Two reasons.

First, there are so many of these kinds of companies around the country that are building legitimate businesses, but few talk about them. And yet, there is a lot that can be learned from their understanding of serving specific audiences.

Second, this is another example of a high intent media business delivering the kind of scale that marketing partners need. If we remember what Dotdash Meredith’s Neil Vogel said at the AMO Summit:

…everybody at this point does not want to talk to you if you can’t take a big chunk of their money. They want to spend a lot of money and they wanna know it works. You know, it’s working. Like scale for us is the key. I would get more of it if I could.

That’s what AIM is achieving here. If there’s an advertiser that wants to target people passionate about woodworking, gardening, home building, marine activities, collecting, etc., there are likely few players that can provide the scale an advertiser would want. As the announcement release explained, “this strategic move effectively doubles AIM’s reach and influence across gardening, woodworking, and homebuilding.”

As for what comes next for Active Interest Media, there are two things. In the immediate sense, it’s business as usual. Van Heuverswyn explained that they are not going to be shutting any of the publications down. “There will be a lot of synergies around platforms and tools. Taunton is already on Omeda, we’re working on that migration. There will be work to merge the accounting, production, and some overhead. But no changes to content,” he said.

Longer term, Van Heuverswyn said that they are opportunistic to acquire further publications.

Pros and cons of revenue shares

There’s a general rule in media: the closer to the transaction you are, the more money you’re going to make on a user. This is why CPMs tend to be lower than CPCs tend to be lower than CPAs. In some cases, though, publishers are looking to become lifetime partners with brands. According to an Adweek story:

But unlike traditional affiliate models—where retailers like Amazon pay publishers like Wirecutter on a cost-per-acquisition basis each time a customer makes a purchase—The Sporting News uses a revenue-share structure, meaning that it receives a percentage of the lifetime value of the new customers it sends to gambling operators.

“When it comes to delivering a customer to a platform with a longer use case, it is short-sighted to take a one-time fee,” The Sporting News CEO Rich Routman said. “If I send someone to a streaming platform, and they spend $10 a month for five years, why would I take a $20 bounty? I’ll take $2 a month for five years.”

The obvious pro, which Rich Routman explains, is that you capture more of the economic upside over time. If a customer’s LTV is $600, being paid a CPA that is effectively 3.3% of that is pretty small compared to receiving money for as long as the individual is paying.

The cons, though, can be plentiful. The obvious ones are explored in the Adweek story: the customer doesn’t spend, so the publisher gets nothing; and the in-depth data tracking necessary to ensure that the retailer continues to pay the publisher over time. Both of those are inherent challenges.

However, I think there are others as well. First and foremost, it extends the payback period quite considerably. Assume Routman’s example of $2 a month versus a $20 bounty. You’re now looking at 10 months to get the same cash as you would if you were paid a flat CPA. If you sign up 1,000 people, for example, you’re looking at receiving $2,000 per month versus $20,000 in one lump sum.

Second, the publisher is now depending on the retailer to retain the customers efficiently. As it stands today, I get paid if I drive someone to the retailer irrespective of their ability to retain the customer. But in a revenue share, I have to hope that the retailer doesn’t change things in such a way that gets the customer to churn. And so, I may never hit the $20 in monthly payments for reasons entirely out of my control.

None of this means that it’s an inherently bad idea, but there are risks. If I were doing this, I’d probably want it to be with very trusted partners who have demonstrated an ability to grow their businesses. Ultimately, you’re depending on their good practices for your long-term growth. While all advertising works that way, the closer you get to the transaction, the higher the likelihood that things won’t work in your favor. Where there is more reward, there is often more risk.

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