ADO Digital Group – Owners of Hustle, Invert, Input, Mike and other titles – may eventually join the ranks of startups made publicly through a Special Purpose Acquisition Company (SPAC).
During an interview in late 2020 about BDG’s position and the digital media industry, founder and CEO Brian Goldberg set ambitious goals for the next few years.
“Where do I want to see the company in three years? I want to see three things: I want to go public, I want to see us making a lot of profit and I want it to be huge, because we have consolidated many other publications.
He said those goals add up, because publicly, BDG can raise “hundreds of millions of dollars”, which Goldberg intends to use “to buy a lot of media companies”.
It may seem that a year later many digital media companiesIncluding BDG) Had to undergo severe cuts. But Goldberg said the company would be profitable in 2020, with revenue “slightly less than $ 100 million”. And it will not be the first digital media company to take a similar route – Group Nine created a SPAC that went public last week.
“I want to prove that we can be highly profitable,” he said. “Many startups do not have that goal. A lot of VCs tell their startups: Don’t worry about profits, don’t worry about losing money. I do not believe him. “
In addition to his plans to go public, Goldberg also discussed how the acquisition has helped Bustle’s business, Their joint venture to buy W magazine And the “overcapitalization” problem of digital media. You can read our entire conversation, edited below, for length and clarity.
TechCrunch: The last time I was caught with someone in BDG, he was together [the company’s president Jason Wagenheim] And that’s when you guys were dealing with the early fall [from the pandemic]. Now we are far ahead of what we are doing in this new world, so where is BDG now, versus what is it, where it was in the early days of the epidemic?
Brian Goldberg: This may be the most spectacular six-month program for many of us in our lives. And of course, for those of us in this industry, the difference between April and October, it’s really hard to fathom, it’s all night and day. April was a very frightening time for all across the country, personally and professionally around the world.
From an advertising point of view, it was a really scary time, because we have customers in every industry, and every industry was affected differently. We have clients who were very affected – theme parks, car manufacturers, hotel companies, airlines – and then we had clients who were not so much affected, like a lot of CPG clients, who everyone depended so much on during the epidemic. Was.
There was a huge halt in our business in March, April and May. For a lot of customers, stopping advertising was a kind of knee jerk like COVID’s sudden stroke, and so we saw a huge negative impact in our second quarter. What we started to see in the third quarter, and especially now in the fourth quarter, is that now the shock of COVID is behind us, the macro trends catalyzed by COVID are now at the forefront.
The media story is no longer about the shock of COVID. The media story is now about all the changes in our world, and about the changes in our industry that were brought about as a result of COVID.
There is good news for our company, and good news for other digital media companies, which seems to be accelerating in the future. It seems that people are watching less TV, and so advertisers are digitizing their budgets faster than they were doing for COVID. Even things like live sports [their] TV ratings are below. And many advertisers are saying, “Does cable TV or broadcast television now have efficacy?” And the magazine industry was heavily skewed, simply because magazines are a physical medium, and people didn’t want to go around magazines or read magazines in the dentist’s office, so we probably saw some print budgets in digital form .
What industry analysts are now going to estimate to see digital revenue in 2021, 2022 and beyond. I also think we have seen a world in which a lot of brand advertisers are beginning to think about what happens when they start spending beyond Facebook and Google. In the last three years, there has been a lot of talk about this duplex, the idea that Facebook and Google are going to eat almost every last ad. What we have seen in the last three months is what advertisers say that this is the moment in which they learn how to spend advertising digitally beyond Facebook or Google.
No, that doesn’t mean they are all pulling out of Facebook – Facebook and Google are doing fine. But there are still tens of billions of dollars that need to be deployed outside of Facebook and Google. And you are seeing winners like Snapchat, Pinterest. Both had incredibly strong earnings. They are benefiting from the same thing that Bustle Digital Group and a lot of other digital media players are not Facebook and Google, which you see big ad spenders ultimately deciding that now deploying Spending time finding other ways of advertising.
I think those are two big trends: The dollar is going digital out of TV much faster than we thought, and major advertisers are using it as a time to find other channels beyond Facebook and Google Huh.
So when you look at how this is affecting the stirring business, has it returned to pre-COVID levels?
For us, when we reflect on the year 2020, we see that we had a great first quarter, we see that we are in an incredible fourth quarter, and we have a big, epic pit in the second and third quarter. is. So when we look at the year, we basically have to say to ourselves, if it wasn’t for that pit in the second and third quarter, what would happen this year? We would have received more than $ 100 million in revenue. Now, we are going to earn a little under $ 100 million.
But when we think about how we prepare for 2021 and set goals for 2021, we need to set goals for 2021 because the COVID never happened, to reduce Q2 and Q3 for 2021 Will have to be used as an excuse. . Because the fourth quarter, the quarter we are currently in, has exceeded our wildest expectations.
People laid off and notice the company because you had a very aggressive acquisition strategy. I imagine the strategy will have to change slightly in 2020. To what extent do you feel that ambition is something you can raise again?
So to be clear, not only do we feel great about our strategy, our strategy was instrumental in helping our company survive and eventually thrive in the wake of the virus. You know, we have made two acquisitions [in 2019] – In the science and technology category, we bought Inverse, which is a science and technology publication, and then Josh Topolsky started an input-and-gadget publication for us, called Input Magazine which is growing very quickly.
It is important that we have that strategy, because no advertiser category has done better for us than technology in 2020 – we have tripled our revenue from technology customers this year, because technology is part of COVID Done through Had we not had an acquisition strategy, would we not have diversified into tech media publishing, we certainly would not have achieved the result in 2020. This is the reality.
Categories like Beauty, Fashion, Retail were huge hits. They have traditionally been our bread and butter, and they are going to be great again in 2021. But this spring, beauty companies were not doing so well, because people were not leaving the house. So the strategy worked, in part, because we diversified into the categories in which we created content, allowing us to diversify the advertiser base. And we are going to continue the full momentum ahead in 2021.
Now, you know, we made six acquisitions in 2019. I do not know if we will make six acquisitions in 2021. But I want to do more than one acquisition in 2021.