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Media & Technology Conference

Media & Technology Conference

Location:  The Pierre: 2 East 61st Street at Fifth Avenue, New York, NY 10065

The 20th Anniversary Event
Two Decades of Exceptional Evolution

Our 20th annual Media & Technology Conference is a preeminent, can’t-miss event for nearly 600 senior executives across the media, marketing, information and technology sectors.

The theme of the conference this year is Two Decades of Exceptional Evolution. Attendees will hear intimate discussions from an array of world class leaders and executives who will share their experiences managing through today’s fast-paced and rapidly evolving landscape as well as their strategies for success in the year ahead.

This is an invitation-only event. If you would like to learn more about our conference please contact Kelsey Kovachik at kkovachik@jegiclarity-us.com.

2024 Conference Speakers

Sejal Amin, Chief Technology Officer | Shutterstock

Keia Clarke, Chief Executive Officer | New York Liberty

Laura Correnti, Founder & CEO | Deep Blue Sports + Entertainment

Elizabeth Deeming, Chief Executive Officer | MVF

Bob Dethlefs, Founder & Former CEO | Evanta; Chairman | CyberRisk Alliance

Robert Dickey, Partner | Morgan Lewis

Patrick Donoghue, National Managing Principal, Corporate Finance & Transaction Advisory Services; Private Equity Industry Leader | BDO

Kerry Gumas, Founder & CEO | Metacomet Advisors

Heather Holst-Knudsen, Founder & CEO | H2K Labs

Nikesh Kalra, Chief Operating Officer | DeepMedia

Doug Manoni, Founder & CEO | CyberRisk Alliance

Philipp Mueller, Chief Analyst & Product Officer | Outsell

Ilya Meyzin, Head of Data Science | Dun & Bradstreet

Duncan Painter, Chief Executive Officer | Flywheel

Scott Peters, Co-Founder & Managing Partner | Growth Catalyst Partners

Gemma Postlethwaite, Chief Executive Officer | GLG

John Rose, Managing Director & Senior Partner | Boston Consulting Group

Breanna Stewart, Power Forward for the NY Liberty, 2x WNBA Champion, 2x Olympic Gold Medalist, 2x WNBA MVP, 5x WNBA All-Star, 4x NCAA Champion

Anthea Stratigos, Co-Founder & CEO | Outsell

Sean Sullivan, Managing Director & Head of Direct Lending Origination | Morgan Stanley

Andrew Tisdale, Senior Managing Director & Co-Head of Europe | Providence Equity

Mark Williams, Chief Revenue Officer, Americas | Datasite

Bill Wise, Co-Founder & CEO | Mediaocean

We would like to thank our valued, blue-chip sponsors for supporting the event

Jon Thackeray Promoted to Managing Director

Jon Thackeray Promoted to Managing Director

New York, NY, February 6, 2024 – JEGI CLARITY, a preeminent M&A advisory firm for the global media, marketing, information and technology industries, headquartered in New York, NY and London, UK, is pleased to announce that Jon Thackeray has been promoted to Managing Director.  Jon joined the firm four years ago and is based in the New York office. He advises clients on mergers, acquisitions, divestitures and capital raises across the media, entertainment, legal, GRC, marketing and technology-enabled services sectors and is instrumental in the firm’s coverage of financial sponsors. Jon has advised on a wide range of transactions across M&A, debt and equity capital markets and strategic advisory assignments, with a total deal value in excess of $20bn.

Prior to joining JEGI CLARITY, Jon was a Director with Citi’s Global Media and Communications investment banking team, where he worked for eight years. He began his career in public accounting at Deloitte, working for a variety of public and private clients.

Commenting on his promotion, Jon said, “I am very excited to continue working alongside our incredibly dedicated and talented senior leadership team. I am grateful to all of the wonderful JEGI CLARITY clients whom I have had the privilege of advising, and I look forward to continuing to build on that success, driving successful outcomes for all stakeholders through our sound advice and subject matter expertise within our core sectors.”

Wilma Jordan, Founder & CEO, North America of JEGI CLARITY, noted, “Jon is deep in his sectors and is tailor-made for this next step in his career…he knows the Financial Sponsor field well, and we believe will be very successful in making inroads across the board.”

Jon holds an MBA from the Leonard N. Stern School of Business at New York University, and both an MS in Accounting and a BS in Accounting and Finance from the Carroll School of Management at Boston College. He is a registered FINRA representative and a Certified Public Accountant.

A Glimpse Into 2024

A Glimpse Into 2024

As we embark on 2024, our global team offers their personal insights into the outlook for M&A and Private Equity across our sectors.

From a North America market perspective, I am optimistic that M&A activity will increase in 2024. Three factors contribute to this outlook.

Firstly, the accumulated dry powder among private equity firms in the US has surged from $2.39tn to a record $2.59tn over the past 12 months and many private equity clients are actively speaking to us about how they can deploy this both in traditional processes, and more creatively. Expect to see funds focusing more than ever on carve-out opportunities and asset combinations where they can create opportunities to invest outside of banker-led processes.

Secondly, given the challenging M&A market over the last 12 months, many U.S. private equity firms have portfolio companies that have exceeded their optimal holding period. In other terms, companies lingering in private equity portfolios for more than 5 years will need to be sold, as the time value of money diminishes with each passing year and pressure grows from LPs to return funds.

Lastly, assuming that the Fed is on track to start lowering interest rates in 2024, the cost of capital will decline with these reduced rates and the markets are currently pricing in a reduction of 50 – 100bps. We expect this to motivate buyers to adopt a more assertive approach in acquisitions as well as give sellers the confidence they need to take their companies to market at attractive values.

The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally. We predict that European based private equity owned companies will increasingly look to the US for buyers and investors, both as tuck-ins to existing platforms or as potential platforms in their own right.

All these dynamics will make for a more stable M&A environment that will engender confidence for buyers and sellers.

The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally.

From a UK market perspective, I feel far more upbeat going into 2024 than I did going into 2023. While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.

Several of the key economic indicators look better than they have at any point in the last 12 months, with headline inflation down from over 10% to under 4% today and forecast to return to more “normal” levels by the end of the year. The markets are pricing in a reduction in interest rates of over 100bps and importantly consumer sentiment appears to have turned a corner as real income levels begin to improve.

This macro-sentiment reflects what we are hearing from companies across our sectors – 2023 was hard work for the majority and really a question of managing through, 2024 is about a return to growth.

From an M&A perspective we are seeing a growing pipeline of opportunities which should come to market during the year, across both private equity and founder owned businesses. Pitch activity was higher in Q4 than at any other point last year albeit in terms of timing, it feels like most businesses will be waiting to see how 2023 closed out, and what visibility looks like on 2024 before they push the button on going to market. Everyone is aware that 2024 won’t be 2021, the bar is higher and hence every transaction will get an increased level of scrutiny from buyers and investors alike, so vendors and their advisors will be keen to ensure that all boxes are ticked – financial, commercial, and strategic – in advance of engaging in a process.

Despite the challenges of the last 12 to 18 months, the UK digital economy and ecosystem is as strong and vital as ever – continuing to grow, innovate and evolve at an exciting pace and constantly creating new ideas and opportunities, which in turn should make for a return of a vibrant M&A market in due course.

While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.

2023 was clearly a challenging year for private equity across EMEA: a difficult economic environment combining high inflation, high interest rates and recessionary worries; broader macro concerns around geo-political instability and the impact of Gen AI; a dearth of top quartile assets choosing to come to market; and mis-matched buyer and seller price expectations. Given all this, it was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.

Looking into 2024, we’d certainly hope that private equity related M&A will pick up.

On the sell-side, buy-out groups globally have a record $2.8tn in unsold investments, and GPs are under increasing pressure to start returning a flow of capital to LPs, not least in the context of a tough fundraising environment. Funds need to find a way to start exiting old investments over 2024 and they will likely become more creative about how they do this where needed. We are increasingly hearing more about private equity funds being open to structured transactions including deferred components and reinvestments to get deals closed in a way that they would not have contemplated in 2021.

On the buy-side, while everyone has talked about dry-powder for years now, it remains incredibly relevant. European private equity firms are sitting on a record €350bn of cash reserves, and although some of this can and has been deployed into existing companies or through continuation funds, ultimately both LPs and GPs need to see this being invested into new platforms. The broader economic and M&A environment should help achieve this in 2024 – inflation has dropped sharply across the region, interest rates are expected to fall through 2024, recessionary concerns are easing at an IC level and buyer-seller pricing expectations are beginning to align.

Of course, timing on this is hard to call but we would hope that these factors will drive markedly higher private equity related M&A by the end of Q2.

It was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.

Many in the start-up and venture capital community will be glad to see the back of 2023.

While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year with founders and entrepreneurs needing to focus much more on scalability, unit economics, GTM efficiency and cash break-even vs. topline growth, with the difficult cost-restructuring decisions that often came along with this.

Similarly, many investors were left looking hard at their in-prices and capital structures vs current asset valuations.

Looking forward, it feels like 2024 is going to be a year of re-alignment.

From an operational perspective, a lot of the really hard work has been delivered so companies are better aligned for the current environment. That may not mean a return to the 2021 and 2022 growth rates, but it does mean much more achievable, capital efficient and sustainable growth through 2024 albeit at a slightly slower pace.

From an M&A perspective, we definitely expect an uptick in M&A across the VC market over 2024 for several reasons. Firstly, we are already seeing much closer alignment around pricing between buyers and sellers, and we expect that alignment to get closer over the coming months. Secondly, strategics are back at the table, particularly in North America, as public market tech valuations have continued to strengthen in recent months. And lastly, many founder and VC backed companies are now looking at being part of a larger strategic in a more positive way than they would have done a couple of years ago – there are potentially huge synergy opportunities for independent businesses with the right larger partner, and an increasing number of independents are keen to explore these.

While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year.

If you have any queries or would like to have an in depth discussion on this article or the broader market please Contact us.

AI-volution | Legal & Compliance Technology

AI-volution | The unfolding story Legal & Compliance Technology

Authors:  Scott Mozarsky (Managing Director, US) & San Datta (Partner, EMEA)

Generative AI represents the next, and potentially most meaningful, key stage of Artificial Intelligence impacting the legal market. Generative AI ushers in a new era of efficiency involving automating routine tasks, enhancing legal research, and reshaping how lawyers construct arguments. Its potential to unlock unprecedented insights, streamline contract management, and predict legal outcomes heralds a transformative journey that promises to redefine the legal landscape for lawyers and clients alike.

History of AI in the Legal Industry

AI has already had an undeniable impact on the legal industry. There have been several pivotal stages, from eDiscovery Technology Assisted Review (TAR) and Litigation Analytics to Document Automation and Contract Analytics, that are important to understand when considering the impact that we anticipate Generative AI will have on this market.

The legal world saw its first glimpse of AI’s potential back in 2005 with eDiscovery TAR, which introduced a future where artificial intelligence could perform document review by detecting patterns in documents, effectively optimizing the tedious discovery process. TAR has been a critical driver of eDiscovery ranging up to becoming a $20B industry. Despite the subsequent innovations, across the market TAR remains the largest and most successful example of AI’s impact on the legal market.

Fast forward to 2012, and the legal market began to witness the rise of litigation analytics. Litigation analytics involved leveraging AI to detect patterns in data coming out of dockets, and case law to deliver profound insights and analytics on law firms, companies, and judges. These analytics are used for business and practice of law purposes. At first, the market was dominated by companies like Bloomberg Law, Docket Alarm and Lex Machina, but now a diverse range of players, from established companies to nimble startups, offer litigation analytics.

The mid-2010s marked a period of transformation through document automation. Before the era of Generative AI, we witnessed automated form completion based on decision trees and app-driven expert systems. Neota Logic and LegalZoom were early disruptors across both B2B and B2C, while Legalmation led the way in providing automation of pleadings in litigation. Since then, no-code/low-code platforms have become increasingly popular, allowing users to deploy software applications without needing a technical background.

The impact of AI extended to contract analytics, encompassing everything from pre-execution contract analysis to contract lifecycle management. Pattern recognition AI technology, effectively the early TAR on steroids, laid the foundation for contract analytics. Not limited to just legal use cases, contract analytics also ventured into compliance and front of the house use cases. A surge in capital raises during 2019-2021, and early 2022 has led to inevitable market consolidation.

Generative AI: Shaping the Future

The arrival of Generative AI back in 2022 heralds a new era of efficiency and effectiveness for legal professionals. Lawyers can leverage AI to handle repetitive and lower-end tasks, freeing up invaluable time and resources for higher-complexity, value-added work. In-house legal groups are increasingly turning to AI and tech-enabled solutions instead of relying on outside counsel. These advancements are now bearing fruit for early adaptors.

Internet browsers and the World Wide Web popularized the Internet for most people, and that development transformed whole industries, including law. In a similar way, Generative AI is the first exposure that most people have to powerful AI tools. Generative AI is just as disruptive. It is already changing what legal services law firms offer, how they price services, and what tasks corporate legal departments can handle in-house.

Ed Walters, Chief Strategy Officer, vLex

Automated Legal Research and Analysis

Generative AI possesses the unparalleled ability to process vast volumes of data faster and more accurately than humans. It can extract relevant information, answer questions, and build robust legal arguments.

Litigation Moneyball

Legal professionals can use Generative AI to analyze data to identify high-value clients, predict likely outcomes and behaviors, and recommend case strategies and settlement analysis. This revolutionary technology is already transforming areas such as personal injury, class action, and mass torts.

Contract Generation and Management

Generative AI streamlines the process of drafting and negotiating contracts. It provides invaluable insights that have the potential to standardize certain contract types across the market.

Litigation Workflow Enhancement

The benefits of Generative AI extend to AI-generated case law summaries, accelerated document review and summarization, deposition preparation, and regulatory compliance. It even takes on tasks like automated transcription, brief preparation, and formatting.

Conclusion: Embracing the AI-Powered Future 

While we stand at the threshold of Generative AI’s influence in the legal market, its accuracy and adoption are still in the early stages. Yet, the trajectory is clear. Generative AI is poised to transform workflows, enhance efficiency, and empower lawyers to focus on the more strategic aspects of their profession. In the end, the synergy between human expertise and artificial intelligence is the way forward in the legal world.

M&A Role

Given the anticipated pace of transformation and the increasing adoption of Generative AI, we expect M&A to play a pivotal role in the legal market as firms look to gain a competitive edge. The table below includes AI-related transactions in 2023, which highlights this trend.

We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Events and Conferences.

Executive Leadership Dinner

Executive Leadership Dinner

Location: The Pierre, New York City
Partner: BDO  (www.bdo.com)

JEGI CLARITY held its third Executive Leadership Dinner of 2023 on October 19th at the Pierre in New York starting at 6PM with cocktails. These events are structured as roundtable discussions and provide a stimulating evening of great conversation and networking.

This dinner was titled “An Insider’s View of the Rapidly Changing Research & Insights Landscape.” The roundtable discussion was led by Steve Schlesinger, Executive Chairman of Sago, who shared his perspectives on the evolving research and insights industry. The dinner brought together approximately 35 senior executives from a mix of large global corporations and emerging companies. Below is an overview of the discussion from attendee Jillian Gibbs, Founder & CEO of APR.

Steve posed many thought-provoking questions to the group, kicking off with “Given the dynamics in the world right now, geopolitically, socioeconomically and overall client behavior, what should companies be doing today to be successful?” In response, the consensus leaned towards prioritizing customer success and relationship management. The key takeaways included a commitment to excelling in one’s core competencies, fostering close proximity with clients and focusing efforts on overdelivering to solidify existing partnerships. Staying in tune with the evolving needs of clients was highlighted as essential, ensuring that support remains tailored and effective. Leveraging satisfied clients as influential voices to generate new business leads was also encouraged. Finally, the proactive offering of multi-year contracts at a discount emerged as a strategy to cement these crucial relationships, securing a path to long-term success.

The group discussed opportunities, challenges, and trends in the research and insights industry. One significant trend mentioned is the shift of tech companies using consulting as a lead generation strategy to drive their subscription models, which is the opposite of how it was done in prior years. This change underscores the growing importance of consulting services in the tech sector. Additionally, clients are increasingly outsourcing roles such as data and business analysts, a shift that businesses in this space should leverage to expand their services and expertise. Furthermore, it’s crucial to help clients achieve more with less, offering efficiency and cost-effectiveness without compromising the quality of work. This approach will enhance client satisfaction and retention.

Observing the changes from the previous year, there’s a clear trend in clients shifting from annual plans to quarterly plans, reflecting the need for agility in these rapidly changing times. Additionally, AI has become a pivotal tool for data, and it’s essential for businesses to consider how they can incorporate AI into their operations to enhance productivity and services. Lastly, the idea that “flat is the new growth” means that companies that can maintain a stable revenue while improving their EBITDA performance are considered successful in the current environment.

If you would like to discuss further or learn more about our events, please contact us at contact@jegiclarity-us.com.

Executive Leadership Breakfast with Stax

Executive Leadership Breakfast

Location: New York City
Partner: Stax  (www.stax.com)

JEGI CLARITY and Stax held an Executive Leadership Breakfast on October 11th at the Stax offices in New York City. This event was structured as roundtable discussions and provided a stimulating morning of great conversation and networking.

This breakfast was titled “Making the Most of AI, First Party Data and Community.” The roundtable discussion was led by Kathleen Thomas, Managing Director at JEGI CLARITY, and Denzil Rankine, Managing Director at Stax, who shared their perspectives on the role of community and how AI and first party data are impacting the B2B Media and Marketing landscape.

The CEO Perspective

The CEO Perspective

What it Takes to Win in the Changing Market Research Landscape

JEGI CLARITY’s 19th Annual Media & Tech Conference focused on ‘Maintaining a Winning Mindset,’ brought together senior executives and investors from across the global media, marketing, information, and technology sectors.

During the conference, attendees had the pleasure of hearing Tod Johnson and Karyn Schoenbart, both currently Co-Founders & Managing Directors of Duo Partners Consulting and former CEOs of The NPD Group, talk to John Rose, Managing Director and Senior Partner at Boston Consulting Group, about the changing market research landscape.

The Changing State of the Market

Tod and Karyn began by acknowledging that the landscape of market research and information services has dramatically changed over the last few years with the deconstruction of large players, such as Nielsen and Kantar, and the consolidation of companies like The NPD Group / IRI merger (now Circana) and the NielsenIQ / GFK proposed merger. Tod commented that this disruption within the marketplace is not new, with acquisitions taking place in the mid-1980s and the reconstruction of many companies like Dun & Bradstreet in the 1990s. He went on to explain that restructuring works well when the two businesses coming together are harmonious in their approach, like the merger of The NPD Group with IRI that collected similar data but in different industries. For Tod and Karyn, the tipping point for them to sell came down to it being the right time – the growth of the business was good, employee and client satisfaction was high, and they felt there was another chapter ahead of them as leaders as well as for NPD.

The Changing State of Market Research

Conversation turned to the changing state of their industry and the decline of panel effectiveness and proprietary surveys. Karyn commented how real time information and ‘always on’ data will become prevalent, with many disruptive, early-stage data companies able to gather information from consumer reviews, social media mentions/videos, and other more passive platforms that are quicker to obtain relevant information and don’t bring with them the privacy issues and fraudulent challenges of survey-based gathering.

This more observational approach was often being driven by tech-led companies, that have the tech know-how but need to tap into the business application and analysis around the data. One such example highlighted by Karyn was a company led by two young female scientists who have developed an AI tool that uses computer vision to look inside of a video to understand the real sentiment of the video. These types of early-stage, disruptive companies are exciting them, and they are looking to bring their expertise and years of business experience to complement their tech platforms.

Tod expanded on how The NPD Group, being a private company, allowed them to take a longer-term view and invest in new technologies such as Media Metrix, online surveys and receipt captures which other larger, public, limited companies that are less agile possibly couldn’t respond to as fast.

Developing a winning mindset

John Rose asked Tod and Karyn what they thought it took to develop a winning mindset. Karyn Schoenbart described the company’s three-pillar philosophy of:

  • Having the best and most accurate data
  • Turning data into information
  • Being able to deliver the data in a way that it is useful for people

Tod added that having a part-creativity and part-mechanics approach is how you generate real success, commenting that if you can apply your expertise in a different way than your competitors, you are likely to win in business.

For more information about our conference please click here.

How I do it: Neil Vogel, Dotdash Meredith

How I do it: Neil Vogel, Dotdash Meredith

JEGI CLARITY’s 19th Annual Media & Tech Conference, focused on ‘Maintaining a Winning Mindset,’ brought together senior executives and investors from across the global media, marketing, information, and technology sectors.

At the conference, Colin Morrison, Founder, Publisher & Editor of Flashes & Flames and Advisory Board member at JEGI CLARITY, interviewed Neil Vogel, Chief Executive Officer of Dotdash Meredith, America’s largest digital and print publisher. The article below was written by Colin Morrison and originally published in Flashes & Flames. Click here to receive more content from Flash & Flames.

Background

Neil Vogel is the Chief Executive Officer of Dotdash Meredith, the largest digital and print publisher in the US, whose 40+ brands include People, Better Homes& Gardens, Verywell, Food & Wine, The Spruce, Allrecipes, Byrdie, Real Simple, Investopedia, and Southern Living.

The company is a wholly-owned subsidiary of IAC, Barry Diller’s listed holding company whose “financially disciplined opportunism” has been responsible for the success of many digital brands including Vimeo, Expedia, TripAdvisor, Live Nation, Match Group, and Angi.

Prior to the $2.7bn acquisition of Meredith Corp in 2021, Vogel had been CEO of Dotdash and led its transformation from a general information website (About.com) to a portfolio of high-performing lifestyle verticals. In 2020, it had made $66mn EBITDA on revenue of $214mn, growth of 65% and 27% respectively. Its operations were characterized by: “Best content, fastest sites, and fewer, better ads”.

The all-digital publisher’s decision to acquire the troubled 120-year-old, print-centric Meredith surprised many. But Vogel had identified the value of its long-established magazine brands; the market-leading product licensing, generating an estimated $100mn of annual profit, principally from Better Homes & Gardens branded products in Walmart; and the constraints that had been forced on Meredith by its ill-fated 2017 acquisition of Time Inc.

But the CEO has admitted last year was a tough start for the “new” company: “These mergers are hard, and this was really hard and slow. In a good market, nobody sees your mistakes. In a bad market, everyone sees every mistake.”

Dotdash Meredith now claims some 170mn online consumers in the US each month (76% of all adults and 90% of women). That makes it a top 10 internet operator alongside Disney, Warner Media, Paramount and Comcast/NBC – and larger than Hearst and Condé Nast combined. Its largest sectors are: Food (Allrecipes, Food & Wine), Entertainment (People), Home (Better Homes & Gardens, Southern Living) and Health (Verywell). Its pro forma revenue for 2022 was $2.3bn, 60% from ads, 20% from eCommerce and 13% licensing. For Q4, digital accounted for 54% of revenue and 85% of profit, emphasizing the digitalization of the Meredith portfolio.

Before joining IAC / Dotdash in 2013, Vogel was Founder and CEO of Recognition Media, a producer of award shows including the Webby Awards and the Telly Awards. Previously, he had been an executive at digital content and marketing company Alloy, and an investment banker. He had graduated in finance from the Wharton Business School at the University of Pennsylvania.

How did you get into media?

When I realized I was not going to be the starting shooting guard for the Philadelphia 76ers, I had to take a different course. I was an investment banker for a number of years. I actually very much enjoyed it, but I found myself wanting to be a client, not one of my bosses. I joined a very early internet company called Alloy. They ended up going private and selling it off and we had a pretty good run.

Then I left and got into more nuts and bolts media businesses. I started a company, Recognition Media, that rolled-up media and advertising award shows which we eventually sold to private equity. Then I joined a venture capital firm FirstMark Capital as an entrepreneur in residence. But I was a terrible investor. It’s not my temperament or my skillset.

How did you come to join IAC?

I knew the guys at IAC, which now owns Dotdash Meredith. At the time, they had just bought About.com from the New York Times.
That was probably one of the worst scaled internet businesses in history. They called me to see if I knew anyone who could run it, and I said ‘Well, wait, that looks interesting,’ and I persuaded them to let me do it. About.com was a general information website, much like an old fashioned service magazine publisher. But it was one brand, a lot of content, and the vast majority of the content was pretty bad. But it still had 20-30mn users a month and I thought we could do something with it.

The one thing I couldn’t understand was that there were still advertisers – companies like Microsoft and Carnival Cruises – paying us exorbitant amounts of money to advertise on a platform where the ads really didn’t work that well. The content was not presented in a great way. But, because my background was not publishing but more like banking and math, I came to realize that our users were at the very bottom of their decision funnels (whether they were ready to solve a problem or make a purchase) and so that was a very good place for some advertisers. When people are searching “What do I bring on my cruise?” that’s a good place for, say, Carnival Cruises to be.”

With that bit of knowledge, I went to Barry Diller. For those who know him, you’ll know that I did not have the easiest conversation when I said: “This thing that we bought is totally wrong. We’re going to throw out almost two-thirds of the content and we’re going to launch a whole bunch of brands to compete against household brands that you’ve known for a hundred years – on the internet, which seems like a bad place for publishers.” His response was: “Well, this hasn’t been working for so long. It’s about time. You guys have an idea that’s worthwhile doing.”

So we took About.com, broke it up and launched a whole bunch of sites including Verywell Health and The Spruce in Home. We almost instantly had very big success, simply because we had looked at the internet differently. We said we’re going to make fast sites, every bit of content we make is going to be amazing, we’re going to have fewer ads so they perform better and don’t annoy consumers, and it’s going to work. We immediately turned the business round and made some acquisitions. We bought Brides from Condé Nast, Byrdie (a beauty site) from an entrepreneur, and some food sites. Suddenly, we went from 30mn users a month to more than 100mn.

Dotdash went from 60 or $70mn in revenue to almost $300mn. We went from losing money to close to $100m EBITDA. We realized that we had become very, very good at publishing on the internet.

Why did you acquire Meredith?

Dotdash had achieved this rapid growth at a time when everybody thought publishing was broken. Publishing is not broken, bad publishing models are broken. But the thing that we didn’t have was major brands. While The Spruce grew to be the biggest home site on the internet, bigger than Real Simple, Good Housekeeping and Better Homes & Gardens, nobody really knew what it was.

IAC really believes in the power and value of major brands so we persuaded it to acquire Meredith Corp for $2.7bn.

Our whole thesis was that this historic business had structural issues that caused it to be very cash constrained and not that able to invest in growth. We thought that, if we could take what we knew digitally and apply it to these incredible brands – People, Better Homes & Gardens, Travel and Leisure, Real Simple, Food & Wine, Entertainment Weekly – we could do to them what we had done to the brands we had re-invented from About.com.

We thought we could have tremendous success and we still feel that way. We happened to buy at a relatively tough time for the ad market. But, long term, that doesn’t matter. We’re now the biggest digital and print publisher in America, probably in the world. We have a whole bunch of print assets too, that we actually like and they fit as part of the mix. We’re by far the biggest publisher online. We like our brands and our scale. Our content really performs and, though the integration has been hard, we’re getting there.

The opportunity to acquire Meredith arose essentially because of its problems with the purchase of Time Inc six years ago. Had Dotdash / IAC also tried to acquire Time Inc back in 2017?

When Meredith bought Time Inc, we were actually too small to do anything. But we forced ourselves into the room to see what we could learn. Meredith had made a choice to double down on print: one print publisher was buying another print publisher and hoping to wring more money out of print.

Some of our people jokingly called it “print on print violence”, and it didn’t work. I don’t really have an opinion on what happened before we got there, but I think the results speak for themselves. We paid significantly less than what the combination of Meredith+Time Inc would have been worth at the time they did it.

For us, though, it certainly wasn’t about buying either print or digital; it was about buying brands. What we saw in Meredith was a company with some very talented people but which was a dividend-driven, essentially a family-controlled business, not really exposed to the latest thinking. We’d just been through this exercise with the About.com assets plus the seven or eight brands we had bought. We knew exactly what to do with these legendary Meredith brands, to fix them on TikTok, on Instagram and – more importantly – on the web.

We also had a very good idea of what to do with print because you just have to make magazines that people are willing to pay for, that are high quality – and that will work. We probably had a touch of irrational arrogance because of our previous success. If we get this right, I think we can be a category-defining publisher for where media’s going.

How did People – the biggest and most profitable Meredith brand – fit your strategy?

We’ve always said – and I think it’s something unique to us – that we’ve always stuck to our knitting and said we are going to be a service publisher. That means health, finance, home, food, tech, travel. We are never going to do news, we’re never going to do politics, we’re never going to do User Generated Content. I mean, we do it in recipes but that doesn’t count. That’s not what we do. Nothing we produce puts you in a bad mood or gives advertisers concern. You’re never going to have an opinion piece. No one stops me on the street and yells at me because maybe they didn’t like a recipe on Food & Wine!

Would you really have bought People if it had not been part of Meredith?

Maybe. We’d never said we wouldn’t buy entertainment, but it’s a little bit different than everything else we do. We like things that are ‘down funnel’ intent. We had to take a very hard look at People before we bought it because it was such a meaningful part of the portfolio. What we found was that, with the entertainment type businesses, you must have readership scale otherwise the audiences are simply worthless to advertisers. But that’s what we have. People is 4x bigger than the next biggest entertainment sites, the Daily Mail and TMZ.

We basically knew it had the scale and that – if we did a good job – there was an intent-based kernel in there, because some 35% of the traffic comes from search. Our ad sellers were very excited to have People as part of a sales package because it sprinkles stardust on the portfolio. If you’re talking to a soup company, allowing them to do something at the Academy Awards can be very helpful. So, we bought People with our eyes open. It’s actually probably been our fastest-growing audience. Super-interestingly, the People team came up with the definition of their brand: “People means ordinary people doing extraordinary things and extraordinary people doing ordinary things.”

What we have ensured is that the print, social media and web content is distinct because the audiences are. In print, you can put the Queen on the cover and write a million stories about Julia Roberts and they do great. On the internet, it’s Kim Kardashian and what was on TV last night. If you try and put George Clooney on TikTok, no one even knows who he is. But the thread is quality journalism for entertainment, which means nothing salacious, no rumors, no gossip. Just a different kind of person for a different kind of audience. We’ve spent the last year transitioning, which has been fairly brutal, trying to do that in all of our brands and understanding what people want. Food & Wine, the print magazine is about experiences. You want to read it while you’re watching TV or whatever. The internet is recipes and social is, “How do you make a Popsicle explode?”

Once you understand that and realize you can do this all from the same brand voice, it gives you super-freedom.

We have these amazing editors from Meredith who had felt restricted in what they were able to do. They are now just bursting with ideas. It’s been a real education for us, learning from them. We are now at the point where all of the brands with print (six of them) have ‘brand editor-in-chiefs’ responsible for the brand mission. They have no operating control over digital, but the effectiveness of this brand-led approach has been a revelation.

How much of Dotdash Meredith is now print?

It’s a much bigger share of revenue than of profit because of the nature of print. We’ve said publicly that, in Q4 last year, 54% of the revenue and 85% of EBITDA profit was from digital. We’ll print probably half as many magazines next year as we did last year but the profitability is going to look pretty much the same. We’re in a really nice cadence where both the ad business and subscriptions on print are pretty good.

We invested heavily in the print properties we kept, so we raised news stand and subscription prices by about 20%. That seems to have all been accepted. We’re excited about it because there’s still a magic in print brands. I’ve been meeting these CMOs and they still love print and they have a lot of data that says it’s still very effective. It’s just you have to realize it’s not for everybody. It’s not going to be a growth engine, but it’s still a really nice contribution business.

What are your principal digital revenue streams?

Advertising is our biggest piece of business and the ad market’s been fairly rough because there’s so much uncertainty. It’s been a challenging environment.

However, a large – and probably the fastest growing – piece of our business is transactional, which is effectively like a guides ratings reviews business. Readers trust Food & Wine for their recipes so they trust them also to tell them which blender to buy. We have 53 test kitchens in Birmingham, Alabama and 100,000+ square feet of product testing space in Des Moines, Iowa. We do comprehensive consumer report-style user tests across everything from throwing luggage off a loading dock to figuring out what is the best blender for a small kitchen. That’s been a real bright spot.

It’s a great business to be in. The people who do the tests and reviews are deliberately independent of any economic arrangements we make with the brands. If we say we have the best brands in the world and they’re really trusted, we should absolutely be able to recommend luggage on Travel and Leisure and blenders on Food & Wine, and we should also be able to tell our readers how they can buy the dress that Jennifer Aniston wore last night in People.

This is a very big and growing business for us digitally. We also have a large licensing business, but the only reason it works is because people love the content. We spend heavily on content and, again, it’s one of those things we tell our people: “Don’t worry about the money, make amazing things, build great audiences, and the revenue will come.” There’s obviously a lot of us who do worry about the costs and revenue, but not our people making the content.

Product licensing was one of the standout, best-in-class successes of Meredith. For more than 20 years, it had been way ahead of its larger rivals in putting magazine brands on licensed product. Is this long term revenue stream now a game changer for you?

We have a very big, longterm partnership with Walmart which sells everything from candles to sheets under the Better Homes & Gardens brand. These products are bestsellers. We love this licensing because it’s great business but also because it’s brand validation. If your brand can carry off that many consumer product sales and have that much consumer trust at Walmart, it’s pretty incredible.

We are in the process of expanding this licensing with many of our other brands, including Southern Living and Brides, for the long term. It’s a great way to monetize our brands.

The next time you are in Walmart, look at Better Homes & Gardens products. It’s an amazing range of bestsellers. We now give everyone on the editorial team at Better Homes & Gardens a $500 quarterly allowance to buy whatever they want from “their” range at Walmart.

What about subscriptions?

We have 11mn print magazine subscribers, but that’s a different business. We have not done subscriptions in any material way across our other properties. We’ve obviously thought a lot about this. But, in order to be a successful subscription product, you generally have to have daily use and many or most of our properties are not that. You need them when you need them and you don’t when you don’t. Also, our whole business is built on scale and subscriptions would tend to limit the audiences.

If consumers are going to pay for things, it generally has to be part of a bundle or part of something. In our sectors, we have made the decision not to be subscription-driven. Our primary revenue is going to be advertising, sponsorship, and eCommerce. But we’re still learning and some of the Meredith people have made a strong case for is experiments because we do have 12mn subscribers who are willing to pay for content.

How important are podcasts?

We do a few. Southern Living has a very big podcast and so does our Verywell Health brand. We probably have 15-20 podcasts across the company, and two or three are large. We don’t do podcasts just to do them. But take the “Biscuits and Jam” one for Southern Living, Sid Evans, the Editor-in-Chief, takes all kinds of southern musicians and just talks about Southern culture. It’s an amazing podcast and does very well. We also have a very big mental health podcast. It’s early days but podcasts are interesting.

How will AI impact your company?

We could do five hours on this! I think there’s been lots of threats to our business in the 10 years we’ve been here. But this is the first thing that could be truly existential if not done correctly and properly. The thing to keep your eye on, as a publisher, is it’s an incredible tool. It’s the greatest analytics tool ever and it’s helping us. We’ll never use it to write content, but it’s helping us figure out what to make in a way that is mind-blowing.

The part of it that no one really knows what’s going to happen (and Barry Diller, has been fairly outspoken on some of these issues) is that the world has been conditioned to use the search bar to get information. People’s behavior can change or not change, but I think that’s where we are for now. Google dominates search so what it does with the search results is going to be the single thing that affects American consumer businesses more than anything else going. Because that is what’s going to happen. If AI disrupts that process in some way, our business is going to change. No matter who you are, because Google is a material part of the traffic.

What’s your vision for Dotdash Meredith in, say, five years?

I’ll be working for the robots! I think we’re in a really interesting place. We’re the biggest publisher in terms of scale. I’m biased but I believe we also have the very best brands in the world. We’re very good at the new-ish channels and our ads perform incredibly well because very simply… If you put three ads on the page instead of six, they do way better. We have a chance to redefine what we’re doing in terms of share of revenue and share of voice. Because we have platform-level scale, we’re now competing with Meta and we’re competing with CTV and we’re competing with all these other channels. If we can do all of this in a brand-safe environment and guarantee that the ads perform, I believe we have a chance to really redefine what a publisher is.

We’re very good at technology. But we make content that people love and we make it accessible and we aggregate these great audiences and connect them to advertiser-vendors. This is a business that has existed for a hundred years. Better Homes & Gardens is 101 years old now. It’s not brain surgery, it’s “just” execution but it’s difficult. It’s hard. But we put in the work and I like our chances.

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