“It was the best of times, it was the worst of times.”
Being an entrepreneur or marketer in finpub feels like living in a Dickenson novel.
The two sides of the coin below will be the focus of the next Financial Marketing Summit June 14-15th in Orlando, register now if you haven’t already.
“It was the best of times…”
Money is flooding the space.
Acquisitions of financial media groups are happening at a faster pace.
Financial Answers, a division of Tifin who raised 100m USD, is buying publishers in the 1-15m range.
They’ve acquired the Adam Mesh Group, Investors Alley, Stock News and are on a tear of acquisitions.
Morgan Busby, probably the biggest supporter of FMS since the beginning, sold a majority stake of Financial Media Corp to Richard Rentrop, CEO of VNR, the great publisher out of Germany (and another long-time FMS attendee).,
The growth capital and operational support VNR brings to FMC could easily create one of the strongest counterpoint ecosystems to the Agora companies the industry has seen yet.
Another long time FMS attendee (and occasional crasher!) Jason Raznick sold a majority stake in Benzinga to Beringer Capital, a PE firm out of Toronto at a massive 300m USD valuation.
For years Benzinga has looked at ways to grow the subscription side of their business.
Jason never bought into the hard sell VSL approach so common to the larger finpubs.
Many times over the years, I heard some version of “he could make so much more money if he only…” followed by some version of “do what Agora does”.
Now, he’s exited at a multiple that one deal maker I know who considered potentially making their own acquisition offer to Benzinga characterized as “a crazy multiple.”
Jason built a company with an understanding of the VC world and an eye to the mainstream.
Something many groups in our space ignored.
Like my grandfather always told me, “A big multiple is the best revenge for any entrepreneur.”
The best of times continues on the media side of the industry.
Times are so good many founders in our space are hoping the next wave of capital will bring even bigger multiples.
Media companies are exploding just like I predicted in our Content & Capital virtual event in late 2020 & again at the last FMS.
I said the financial services industry, who spends 43billion USD per year on advertising, was coming to compete for clicks in our channels.
Now look what’s happened:
Right now we have MORE media companies in the 25m to 75m USD range in our ecosystem than we have pure subscription publishers in that revenue range.
This is the first time in the history of the industry we’ve seen financial media agencies outpace publisher growth. (look for my coming email detailing the sources, impacts, and knock-on effects of this trend because it matters).
Companies selling advertising are inherently limited in growth to a fraction of the size of the companies they service.
So many financial media groups growing past the size of most mid-range publishers means the biggest clients from those groups are increasingly coming from non-subscription publishers.
The big money continues to come – we’re just on the early edges of it.
Click competition is coming at increasing levels.
The best of times is here for selling media.
And for anyone stepping into the intersection of finpub & media and broader financial services sectors.
As Ian Rosen, CEO of FA and the guy actually making the most acquisitions in our industry said in our conversation, financial media, and publishers “are the engine that makes all these fintech companies work.”
The challenge to us as an industry is one of value capture – getting our share of the massive money flows sloshing around fintech and media right now.
That discussion is core to this year’s Financial Marketing Summit – make sure to register now.
In the last few months, I’ve spoken with…
- A former President of ING Banks fund division (ING has a trillion or so under management) – what’s he doing? Working on a startup to connect the finpub industry with the RIA side.
- The founder of an institutional brokerage who regularly outranks Goldman Sachs & Morgan Stanley for top institution BD. He thinks the pub opportunity with BD’s is the best thing he’s seen since his drunk boss blew a deal to buy the company who became TD Ameritrade for a lousy 300k.
- Another group who asked “should we put a billion in escrow to show people we’re serious” in reference to a plan to target active traders through the trader education industry.
At both our Content & Capital virtual event and at the last FMS I warned everyone, “The big money is coming and we, as an industry have 3-to-5 years to act if we want to capture that value.”
The clock is ticking.
That’s why FMS this year is largely dedicated to specific opportunities for you to cash in on what is essentially the biggest trend to ever hit finpub – the mainstreaming of digital publishing and media as THE acquisition channel for all things financial.
“…it was the worst of times…”
It hasn’t been all good news though.
The FTC put the brakes on another year of acquisition in the industry.
They published lists names to put companies on notice about earnings claims. It did exactly what the FTC hoped – scaring the crap out of everyone.
Promos came back down to go back into legal review (a repeat of what happened in the wake of the Raging Bull case the FTC brought).
In both cases, many publishers lost months of promotional time and millions in lost ad spend and revenue.
More than one founder expressed an interest to me in selling and just getting out of the business.
Conversion feels harder.
Copywriters who’d grown up writing in the heady era of the explosion in active trading – invariably writing about income in some form or another….
… copywriters fortunate enough to write during the Cannabis boom then the parabolic move in alt currencies suddenly found many of their tried-and-true tactics were off the table.
In many cases, those copy tactics never really should have been used but a lack of legal review at many companies let everyone “get away” with questionable copy.
In many other cases, the copywriters are dealing with essentially a changing standard of what is deemed acceptable.
Since subscription businesses live or die by their acquisition copy many pubs have withered after two years of start then stop acquisition.
Made worse by the weakening of old promo models and a copy teams seemingly incapable of adjusting to a more transparent regulatory environment.
At the same time, we’re seeing new promo models – like the docuseries approach killing it for our friends over at Decentral Publishing.
Their content heavy launch model is opening affiliate doors normally closed to the hard sell copy approach traditional to financial publishers.
Jami has been working closely with them to push it out and build one of, if not THE biggest, hotlist in recent memory in the industry.
That’s the other side of FMS this year – how to navigate these rougher regulatory waters in a way that isn’t just “compliant enough” but keeps you solidly on the right side of the rules.
While also converting like crazy.
Next week I’ll send you two interviews.
First, with Aaron Dehoog, easily one of the best newsletter publishers in the business. Aaron thinks this will be good for the industry and points out – in precise detail – why the so-called copy issue isn’t really an “issue” at all.
Second, with Bret Holmes, one of smartest business builders in the industry.
I asked both of them to share what they see as the way forward for promoting subscriptions.
We’ll continue to dive into all these opportunities and issues.
The Financial Marketing Summit this year is going to bring you a ton of direct opportunities to do business with the big players coming into the industry.
To create new promotional opportunities.
And to help you capture more the enormous wave of capital threatening to wash over the industry.
The world is changing, and Jami and I are focused on making sure you end up on top in the architecture of the new form the industry will take.
Register now for FMS to make sure you do.
Best,
John
