B2B technology becomes more important part of the overall business of the media company

In its tenth year of existence and following a series of publisher purchases – including The Players’ Tribune and FanSided – Minute Media made its first tech-centric acquisition in 2021 with the takeover of the tech platform of Wazimo publication in November. The acquisition reflects how technology is becoming a larger component of Minute Media’s overall business and how its B2B technology revenues are intertwined with its advertising revenues.

“The B2B side of our business will end [in 2021 having accounted for] 60-ish percent of our income. It’s a big part of this business. We’re as much a tech company as we are a publishing company, ”said Rich Routman, president of Minute Media, in the latest episode of the Digiday podcast.

The lines between Minute Media’s tech and publishing companies are even blurrier than that. This percentage of overall revenue represented by B2B actually includes advertising revenue. While Minute Media does some deals in which it licenses its technology to companies for a fee, it also structures the deals to include an ad revenue sharing component, which may also cause Minute Media to sell ads for its technology clients. .

“As we become more flexible in our business model, B2B revenue has increased significantly through B2B agreements based on revenue share supported by advertising or B2B revenue based on license rights. But the B2B business as a whole is more important than the [owned-and-operated] brands, ”Routman said.

Here are some conversation highlights, which have been edited for length and clarity.

Build vs buy

As far as technology is concerned, we have been in construction mode. We felt that with the team that we have and the expertise that we had in-house, there wasn’t really something we were focusing on that we couldn’t build on. And as we’ve started to work more closely with Wazimo – and it’s obviously very important for every publisher to get familiar with first-party data – this could be a great addition to Voltex. The development pipeline around something like that is not two months, because otherwise we would have built it ourselves. It was going to take us a long time to catch up.

Margin vs profitability

At this stage of the activity, we are more interested in the margin than in profitability because we have not finished making acquisitions. Whenever you acquire a business, it’s not just about acquiring the business and its profitability; this is how much you are going to invest in that business, once you acquire them, to get them from point A to point D. If you buy a business purely on the basis of its profitability today, it probably won’t so profitable tomorrow. We are not a private equity firm.

Profitable level

The breakeven point is really the goal we’re focusing on right now. The days of investing millions of dollars to grow the business every year and shred that capital are sort of behind us at this point. It’s more about how we choose to deploy capital. We deploy it through mergers and acquisitions. We are deploying it in technology. And we are deploying it by strengthening our teams.

An operating margin mindset

I’m really interested in understanding the operating margin for each of our individual assets. What does FanSided look like based on operating margin? Because he has a lot of shared resources. He has finance and HR that come from the center. So yes, we can look at the overall profitability, but because we’re in a number of different areas, you want to see if this tactic or this asset or this technology is performing well on an operating margin basis? Are the people in charge of it doing the smart things for the business to make it profitable today or in the future?

Cathy W. Howerton