‘It’ll be about the synergies’: Buyers size up the Vice Media-Refinery29 marriage
In a media market where scale is newly important, a combined Refinery29-Vice Media would be big. But not that big.
On Oct. 2, the two venture-backed media companies announced that Vice was acquiring Refinery29 in a largely stock-based deal that reportedly values the combined companies at more than $4 billion (CNBC reported that the tie-up valued Refinery29 below its last valuation of $500 million).
The tie-up, which had been rumored for much of 2019, will merge two of the largest youth-focused media companies in the United States, which have taken slightly different approaches in their attempts to diversify their revenues. Following layoffs and a reorganization, Vice has concentrated on its agency business, Virtue, its studios business, which makes original documentaries and feature films, while consolidating its vertical properties under the umbrella of one Vice. Refinery29, more recently, has focused on returning to its commerce and experiential marketing.
But that new company will not automatically gain 800-pound gorilla status. The wave of consolidation that’s swept through media in 2019 has created a new crop of giant publishers, while recent sales alliances designed to make the participants more competitive against platforms including Google, Facebook and Amazon, have created scale opportunities that top what any individual publisher can offer.
To figure out whether the unified company will actually become more competitive, Digiday spoke to five media agency sources about the announcement and whether it changes how Vice, Refinery29 or both stack up.
In an announcement distributed to press Wednesday afternoon, Vice Media claimed that the combined titles will reach 350 million monthly unique users around the world. Yet in the U.S., arguably the most important market, Vice and Refinery29 would not have a dominant position. In August 2019, the sites’ unduplicated audiences totaled nearly 53 million unique users, according to Comscore. For comparison, G/O Media attracted an audience of more than 74 million unique users over that same period, per Comscore.
Drilling down further, into the 18-34-year-old demographic both titles theoretically dominate, their combined reach – some 27 million monthly unique users, per Comscore – would still lag behind BuzzFeed’s, which reached 34 million monthly unique users, per Comscore.
Both Vice and Refinery29 have taken a quality over quantity approach to video throughout their respective histories, often focusing on long-form content such as documentaries rather than quick-hit social video. Max Germain, svp and digital director at Assembly, said that the ability to deliver more high-quality video with greater scale would make the titles more attractive.
“As video becomes a bigger part of our buys, these one-to-one relationships matter,” Germain said. “I definitely think it helps.”
Yet for marketers seeking scale, the distance between Vice Media Group and the competition would be pronounced. Through the first nine months of 2019, Vice and Refinery29 drove a combined 4.4 billion video views across platforms, according to Tubular Labs data. By comparison, BuzzFeed and Group Nine, which recently announced a video sales partnership with Insider, each gather over 1.5 billion views per month, per Tubular.
While branded content and creative services have grown into competitive areas for publishers, Vice’s agency, Virtue, is still considered a leader in the space. Being able to add the experiential credibility of Refinery29’s 29Rooms, along with a burgeoning commerce capability that Refinery began investing more resources in last year, should give Vice Media Group more opportunities to position itself as a partner that can solve for brands’ business problems.
“Anytime a publisher has an audience blind spot, they’re somewhat hampered as to how they can help a marketer,” said Barry Lowenthal, the CEO of The Media Kitchen. “This merger will allow them to offer more solutions for sure, since Refinery29 will help to close that blind spot.”
But those combined numbers may not even make sense to combine, some buyers say. While Vice Media CEO Nancy Dubuc dismissed the prospect of cultural clashes between the two companies — “We know some will think of the old Vice stereotype and ask, how can the ‘bros’ ever mesh with the feminists of Refinery,” Dubuc wrote in a memo sent to staff — buyers say they are different enough that the two may have trouble mixing.
“They serve up such different spectrums of editorial voice,” said David Tucker, the head of strategy at the media agency Swellshark. “I think of Refinery as the ultimate voice in the conversation against toxic masculinity. And Vice, maybe, as not that.”
Then there is the issue of selling the two audiences together. While Vice has said that it will not make decisions about staffing until the deal closes, whatever sales force is left standing will have to figure out whether to sell Refinery29 and Vice separately, or together.
John Wagner, executive director of digital direct at PHD, said he expects those decisions will take a while to work out, and are likely to be hampered by technical and integrations challenges. “If you’ve got to ad-serve to two different properties, that’s a huge pain on the buy side,” Wagner said. “That’s going to take some time. Going through all their data and seeing what they sit on is super important. Ultimately, it’ll be about the synergies.”
As those issues are ironed out, though, the tie-up may not help Vice Media Group address for the problems that media companies typically solve for agencies and marketers.
“Generally speaking, I’m still challenged by what role do you need a direct publisher to play on a plan these days,” Tucker said. “If I want to buy reach, there’s still Facebook and Instagram and programmatic.”
Kayleigh Barber contributed reporting.
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