Scouting Report: Buy-side pros evaluate TheMaven as it aims to make $160m this year
Welcome to Scouting Report, in which Digiday asks ad buyers and industry executives to assess a particular publisher, agency or platform. First up: TheMaven, a network of vertical publications, including TheStreet and recently Sports Illustrated.
Few media companies have entered 2020 telling a growth story, yet that is exactly what TheMaven is doing.
Earlier this month, the Seattle-based company issued a press release claiming that it had generated $45 million in revenue during the fourth quarter of 2019 and that it is on track this year to generate more than $20 million on earnings before interest, taxes, depreciation and amortization (or EBITDA) on overall revenue of $160 million. Despite the fact that it is a public company, TheMaven has not filed earnings reports with the Securities and Exchange Commission since mid-2018, when it posted a $3.9 million loss for the three months that ended in June 2018.
Founded in 2017, TheMaven has made money mostly by selling programmatic advertising for its titles on a wide range of exchanges. But it has plans to do much more direct selling for its sites this year and lodge itself on the consideration set of top agencies and brands.
Digiday asked three buy-side media executives to serve as “scouts” and share their thoughts about TheMaven’s prospects for hitting those targets, as well as its strengths and weaknesses.
TheMaven’s top two executives, James Heckman and Ross Levinsohn, are established media veterans coming off rocky departures from their last two jobs: Heckman was forced out of his job as CEO of Scout, and Levinsohn stepped down as CEO and publisher of Los Angeles Times amid allegations of sexual harassment; an internal investigation later cleared Levinsohn. But TheMaven’s leadership team, which recently expanded so as to tackle building a direct sales force, also includes veterans from AppNexus (Andrew Kraft) and New York Media (Avi Zimak).
“They’ve got a bunch of serious firepower on their executive team,” one scout said. “You have a lot of grown-ups who have come out of the buy and the sell side.”
The second scout noted that the relatively high number of top executives could result in clashes under the wrong circumstances. “There’s a lot of chiefs in this company,” this second scout said.
A ‘clarified’ position
TheMaven earned most of its headlines last year from buying Sports Illustrated and vowing to change its business model; the purchase also coincided with the layoff of 40% of SI’s editorial staff.
Yet TheMaven acquired plenty of other properties last year and integrated several dozen of them into its network, according to Comscore. Those acquisitions and additions were responsible for most of the audience growth recorded by Comscore for all of TheMaven’s titles combined, from 18 million unique users in November 2018 to more than 50 million unique users in November 2019.
For a stretch of 2019, ad buyers might have found it difficult to tell which titles were part of TheMaven’s network. For example, publishers who consulted TheMaven’s ads.txt pages did not always find evidence that certain sites were part of its network or that TheMaven was authorized to sell their ad inventory.
That issue has been mostly resolved, the scouts say.
“They have done quite a bit of work to actually clean up some of the issues they had last year,” a third scout said. “They clarified their position in market.”
TheMaven network includes a mix of hyperlocal and national sites. That combination could make it easier for advertisers that are buying ads on the local sites to extend their campaigns to include national properties, or vice versa.
But TheMaven will not be the only media players able to make that kind of offer, the third scout pointed out. “They have good traction in hyperlocal markets. But what we need to stop and think about is the fact that in these next 24 months, we have a big convergence of new ad units that are going to come in with OTT.”
This scout added, “My hesitation around this is how is this competition going to shake out? Selling hyperlocal to local retailers digitally is one thing. But trying to sell local with major advertisers is going to be tough.”
Lots of impressions, available through lots of sellers
A glance at the ads.txt pages of any Maven property today reveals that the inventory for the entire TheMavens network can purchased on a wide variety of exchanges and marketplaces.
“They’re still distributing across all exchanges,” the third scout said.“They’re selling things with AdX, 33 Across, Pubmatic, Amazon, Kargo. … It is all over the place. Anywhere they can sell, they’re selling.”
This scout added, “In my world, that means there’s ease of access, which is great,” noting, “But it also means the competition for the inventory is insane.”
Success not guaranteed
All three of the scouts concluded that the playbook TheMaven is using is not new: Roll up a bunch of sites and parlay the scale into making direct deals with advertisers. But it is also a strategy with a mixed track record.
“The industry is littered with attempts to do this, with this being a rollup of publishers,” the second scout said. “Publishers don’t do well at managing ad networks. The degree of difficulty is very high.”
Many of TheMaven’s competitors, the scouts pointed out, offer either an advertising environment made up of a cohesive set of like titles or diverse sets of titles offered with insights about the different audience segments. “Consolidating low-value assets does not create a high-value asset unless you are doing something with them,” the first scout said.“Is Maven turning content into something that nobody else can? I don’t see how.”
The second scout allowed that TheMaven is still assembling the titles it wants for its network. And the challenges that publishers face in this advertising market should create an opportunity to gather up many more of them.
“Maybe their bet is, every publisher that has 15 to 20 million uniques and 30 million to 100 million impressions a month is just stuck,” the second scout said. “And maybe Maven’s approach is, We’re just going to consume these brands.”
But vacuuming up more sites indiscriminately could cloud the value proposition for advertisers. “What you end up doing is you create a Frankenstein with no through line,” the second scout said.
New app launches through Apple hoping to win with ‘zero-party data’ when others haven’t
Caden's new app lets users connect data from their Uber, Amazon, Netflix and other accounts in exchange for money. Will it take off?
‘The next level for us’: The New York Times eyes longer play sessions for games in subscription drive
The games division is focusing on finding new ways to mine the inherent competitive nature of games like encouraging people to play multiple games in a single session or through new achievements and rewards for progression.
In graphic detail: Publishers’ full year 2022 earnings
Looking back at 2022, the hits to publishers' revenue were partially staunched, but by the end of the year nearly all areas of the business felt the impact of the economic downturn.
SponsoredBrands are optimizing video production to drive user acquisition
Sponsored by QuickFrame by MNTN With brands increasingly investing in video ads on social media, marketers are enhancing their video production capabilities to unlock growth on Facebook and Instagram. Especially urgent in an uncertain economic climate, brands must minimize production costs while creating a high enough volume of social media videos to identify the creative […]
‘It has to be built in’: How agencies strive to advance their diversity goals
There often is no blueprint for diversity in the corporate world, and many initiatives at media agencies have been works in progress over the last few years.
Publishers tout generative AI opportunities to save and make money amid rough media market
Generative AI technology will be an area of focus for some media companies this year as they work to cut costs and find new revenue opportunities amid a tough media market.