The traditional purposes for one company to acquire another – merge and acquisition – boil down to four driving reasons:
1) To buy customers or access to customers for cross-selling purposes.
2) To buy a technology that’s hard to replicate or would take a lot of time or effort to build.
3) To accelerate growth – one company takes on some debt and buys a similarly-sized and suddenly, it’s doubled its revenue.
4) To kill the competition – buy it, skin it and shut it down or to prevent a competitor from buying it.
In this era of marketing, we should add a fifth reason:
5) To buy an audience.
Businesses rent audiences all the time with advertising. At its core, advertising is selling access to an audience another business built and owns.
In the last 10 years or so, content marketing has emerged as a way for businesses to build an audience of their own. When done properly, it becomes its own channel and powerful addition to the marketing mix.
Still, it takes time to build an audience. There’s a lot of noise in the market and publishing useful and relent content of uniformly high quality is hard work. So, what if you could buy an audience?
Content Marketing M&A
Buying an audience isn’t a new idea but isn’t widely appreciated among companies outside the media vertical yet. It’s a bold move for a CMO to knock on the CEO’s door with designs to acquire a publication.
Yet it is happening, and there’s another example: FiscalNote is a five-year-old startup, that’s raised $50 million in funding to date according to its press kit, and just announced its intent to acquire CQ Roll Call from The Economist Group.
Terms haven’t been announced yet, but to get a sense, Politico found The Economist Group acquired Roll Call in 2009 for $100 million.
What FiscalNote Does
To understand why this, make sense, you must understand these two businesses. FiscalNote is building out a government relations (GR) software that combines data, analytics and workflow. Here’s an example from the FiscalNote blog on Medium:
“In FiscalNote’s new paper, Party Matters: An Embedding Model of Roll Call Votes, we combine traditional analysis of bill text with information about the party of the bill sponsors to predict U.S. Congress vote counts. Our technique allows us to more accurately predict individual votes than existing methods…”
If you’re a lobbyist or GR professional, this seems like pretty useful information. The FiscalNote website indicates they can do this at the state-level too for all 50 states, and in 30 other countries around the world.
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The Audience it’s Buying
CQ Roll Call is best understood as two separate businesses operating under one name. The Congressional Quarterly (CQ) part of CQ Roll Call has software that provides some GR support. No doubt there’s probably some software product overlap and complements between the two, which gives plenty of reasons to check the traditional boxes next to M&A reasons 1-4 listed above.
It’s the Roll Call part of the deal that makes this an audience buy, and the company was straightforward about it in its communications. From the FiscalNote press release announcing the deal:
“This strategic acquisition would leverage the rich history of the CQ and Roll Call brands, trusted for their non-partisan and unbiased coverage of the federal government for decades and strength in federal content, to complement FiscalNote’s expertise in technology and real-time policy data and analytics to provide a broader suite of products and services in a dynamic market. In addition to bringing the combined company’s enhanced offerings to market, FiscalNote would uphold CQ Roll Call’s editorial independence while identifying opportunities to adapt and grow in a transforming digital news landscape.”
As Politico put it,
“‘As we were growing this business and listening to the market, we increasingly heard louder and louder requests from customers who asked for a different type of information — more editorial, more context,’ Hwang said. The editorial component of CQ Roll Call, Hwang said, will complement FiscalNote’s technology.” [Hwang is Tim Hwang, the founder and CEO of FiscalNote].
Roll Call earned 1.4 million visitors last month according to SimilarWeb. If you sell software to GR professionals and lobbyists on a subscription basis, this is a solid audience to own with lots of potential software customers.
Worth noting, it’s an intent to buy and the deal isn’t done until it’s done.
What Audience Could You Buy?
You don’t have to spend that kind of money to buy an audience. Your PR professional could probably give you a list of 5 blogs in your vertical you could buy for under $10,000. A good way to think about pricing it is to consider how much your marketing shop spends acquiring a prospective customer’s email address and how many valid ones you obtain in the buy.
If there’s a caveat to buying an audience, it’s that the acquiring company really needs to understand the nuance of content marketing. Otherwise, the risk is you spend a lot of money buying a publication, break it, and then have nothing to show for it.
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