May 2, 2023

FT’s M&A Strategy; Workweek Jobs; Traffic Doomed Media

At the beginning of April, the Financial Times announced that it had acquired a majority stake in Endpoints News. It’s a big expansion for the FT Specialist Group, which is made up of the company’s b2b publications. What comes next, though?

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Now let’s jump in…


Axios (subscription required) interviewed Matt Fottrell, Managing Director of the FT Specialist Group.

“Broadly speaking, I like businesses where there’s a prize for winning and a penalty for losing,” he adds. “That makes [people] more likely to subscribe.”

“Energy” was Fottrell’s immediate response when asked about sectors where the FT had gaps in coverage and could make sense for future acquisitions. “It’s complex. It’s changing. It’s global. It’s full of news,” he says.

The FT also is interested in expanding its data products and growing its event businesses. Fottrell says its U.S. event business doubled in size over the past two years.

“A prize for winning and a penalty for losing” is how most business media wins. It’s how Bloomberg built a multi-billion dollar business with its terminal. Winning is being faster than someone else. And for the most part, if you can provide someone in business with an edge, they’ll pay for it. It’s why NYT costs $17 every four weeks, FT costs $40 per month, and some niche business publications cost $100+ per month.

What I am more interested in is where the group will focus next. While Fottrell calls out energy, I can see FT likely going after any number of industries, including more healthcare, IT, and others. He explains the criteria in a straightforward way: Complex. Changing. Global. Full of news. Is it any wonder Endpoints was the first to be acquired?

What’s interesting about FT is that it is in a unique position. It is a journalism-first organization that is looking to expand quickly into the United States. That’s exactly the position Axel Springer finds itself in (disclosure: AS owns Morning Brew, which is where I work). But Axel paid a billion dollars for Politico in late 2021 and integrations of that scale take time (I’m not privy to that information sadly), so I am unsure how acquisitive the German brand is going to be in the immediate future. And Informa just paid $400m+ for Industry Dive in the second half of 2022 plus another nearly $1 billion for Tarsus in March. That’s going to take some time to integrate.

And so, this gives FT an opportunity. The biggest competition is busy with their previous acquisitions. And so, there are fewer strategic acquirers competing for deals. That’s a luxurious position to be in. The question is how quickly FT will move to take advantage of this, whether that’s with news brands or, as Fottrell says, data and events.

Nevertheless, what remains clear is that FT is zeroing in on this Specialist Group as a way to grow here in the United States. Perhaps I’m biased, but I think it’s the right strategy.

Workweek monetizes 1PD with jobs

Two and a half years ago, I wrote about what I had learned launching and failing at job boards. At the core of it, I identified three major difficulties running job boards:

The first reason is the chicken or egg problem. How do you get an audience without job listings? How do you get companies to post jobs without an audience? The local problem compounds this problem even further. Solve that problem and things become easier.

The second reason is the active vs. passive seeker. Running a niche publication and then adding a job board doesn’t mean your audience translates. You need a content strategy centered around careers.

The third reason is that this work requires active selling. Is it worth hiring someone to sell $500 job listings? Probably not.

And so, I’ve always been unbelievably pessimistic when it comes to job boards. But what if you could build something with much higher revenue potential where the fees are considerably higher? Would it then be worth exploring?

That’s what the Workweek team has with its recent announcement, HireFor. In a thread announcing it, Workweek’s CEO, Adam Ryan, had this to say:

What would you launch if you had 1M+ executives and founders in your audience?

For example, the country’s largest healthcare executive search firm does more than $100M+ a year.

How do they have success?

They have a massive database built over decades alongside relationships with executives.

We’re rethinking how companies hire & utilizing the strength of the Workweek ecosystem to create the best recruiting firm.

Let’s look at this idea and then at the three difficulties I outlined.

The crux of the chicken and egg problem is overcoming the resistance to using a new tool. An HR department will only care about a new job board if it has a large number of applicants. And so, most avoid newer job boards. But HireFor removes that challenge because every reader is a prospective applicant.

Okay, but what about active vs. passive seekers? Again, HireFor has an advantage. Recruiting agencies are always trying to poach people who are not actively seeking work. The reality is, companies want what they can’t have and passive job seekers are more desirable.

And third, job boards charge $200-$500 per listing. If you’re paying someone $60k a year, they better sell a lot of job listings. A recruiter, though, makes a cut of the employee’s first year salary. According to Top Echelon:

First, how much do recruiters get paid per placement? As we’ve already established, a recruiter’s placement fee is based upon the candidate’s first-year salary. For example, if the salary for the position is $70,000 and the percentage that the recruiter will be paid is 20% of that, then the recruiter will receive $14,000 from their client.

$14,000 is a heck of a lot more money than $500.

What Workweek has is an interesting way of monetizing its first-party data. It knows a lot about its readers—where they are, what their jobs are, what industries they’re in—and so it can find prospective talent from within its own database.

The Workweek team uses this as a way to push its creator-first narrative, which is perfectly fine. But this is a model that any niche business media company with a highly engaged audience could deploy. Have a database of nurses? I guarantee you can help get them placed and get a fee whether it’s Nursing Media Brand or Nursing Creator leading the charge.

The downside of this type of business is that it’s like any other agency. When business is good, you hire more recruiters to handle the influx of companies wanting help with placements. When business is bad, you have to let go of people.

Nevertheless, this model is compelling to me. If I were launching a jobs-related product today, this is likely the approach I’d encourage media companies to take.

Traffic Doomed Media

Semafor’s Ben Smith was gracious enough to send me a copy of his new book, Traffic, which is in stores today. The underlying narrative is that the early digital media scene—Gawker, Huffington Post, Drudge, Breitbart, BuzzFeed, etc.—were all interconnected. Today’s unbelievable misinformation can harken back to practices that these media companies popularized in the aughts.

For example, Andrew Breitbart was a long-standing maintainer of Drudge. He was also a co-founder of The Huffington Post. Jonah Peretti was a co-founder of Huffington Post and then launched BuzzFeed (while still at Huffington Post) and now owns HuffPo years after leaving. In many respects, it was unbelievably incestuous (much like NY media is today).

All of that is interesting and alone makes the book worth picking up. But I picked up on two trends while reading the book that I think are worth exploring.

First, no one cared about the person behind the unique visitor. All anyone cared about was how many people they were getting, not who they were getting. And in the early days, that was actually fine because all advertising was contextual in nature. But the problem with this approach is that, as advertising got more advanced, the need to understand who was behind the unique visitor became far more important.

Why did Facebook and Google beat these digital media companies? Yes, scale is a big reason, but more than that, it’s the fact that they knew exactly who people were. And so, when there is an overabundance of traffic, how do you differentiate? By providing more data about the who.

Traffic, ultimately, doomed media. It made media companies forget that the who behind the user actually matters.

Second, Jonah Peretti, in particular, always viewed digital media and the platforms as having a symbiotic relationship similar to content companies and cable companies.

For example, before we all cut the cord, Viacom would make content and then work out a deal with all of the cable companies to distribute the content through their pipes. This was a symbiotic relationship.

And so, here comes the internet and Peretti thinks the same thing will happen. Facebook, Google, Twitter, etc. would need big content companies to ensure they had content to put their ads around. And this was the cardinal mistake.

What the internet democratized was the ability to create content. Anyone could do it. I’m doing it right now without needing a major publisher. And so, creating low-quality listicles wasn’t something BuzzFeed had a monopoly on. It became so cheap to do it that anyone could. Couple this with the fact that the platforms didn’t want people leaving their sites versus cable companies not caring what people watched and it became a recipe for contention.

What they all thought was a symbiotic relationship was actually a parasitic one. The platforms were losing their audience to people gaming them for traffic.

I recommend the book if, for no other reason, it acts as a reminder of what not to do. Value the person behind the traffic and remember, the only way to win is to own your audience. But the main story is also quite fascinating.

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