The crown that slipped: What went wrong with Isentia’s $48m acquisition of King Content?
When King Content was sold to media monitoring company Isentia, the deal changed how the industry thought about the content marketing sector. But under its new ownership King Content soon stalled – and took Isentia’s dream of becoming a billion dollar company with it, as Steve Jones reports
It was grandly proclaimed as the deal that finally brought validation to the content marketing industry in Australia.
Far from being a buzzword for a vague and imprecise way of connecting brands with prospective customers, the transaction, it was suggested, proved that ad-free, brand-commissioned content was a legitimate and valuable approach to marketing.
Fascinating article!
I think Croll’s comments about “strong return and retention rate of freelancers” leave a lot open to interpretation.
As a freelancer on their books, I was never consulted about rates of pay. I began declining more and more work with them, as the rates of pay continued to fall (and the stipulated deadlines became increasingly unrealistic). Today I don’t really do anything with them.
But I’ve never formally requested to be removed from their books, meaning I am one of King Content’s “retained” freelancers.
The pool of freelancers just keeps growing, but ultimately they will vote with their feet and go where their skills are valued, appreciated and appropriately paid for. Afterall, we all have to keep a roof over our heads!
A race to the bottom on freelance rates only serves to push talented writers to your competitors, or out of the content game altogether.
I concur with the claims mentioned here about poor word rates. I don’t know how they can possibly attract quality writers at what they’re paying – i walked away when i was told what they were offering. Agencies like this are doing the industry or the writers who built it no favours!!
This is really interesting. Why would you spend 48m on this business?
Looking at the content on the King Contents site the stories are disposable and super low cost to produce. You can’t blame the low quality freelancers. If your a true content provider you own and control ‘paddock to plate’ As we all know in the content industry clients want cheaper, stronger, faster so the amount of clients need to grow creating an even cheaper result with even less control over the quality from the content company.
Sorry ‘Just sayin’
*You’re
seems to me like a textbook case of the Captain of a legacy, media-derivative publicly listed business in structural decline and facing a revenue hole in a forward reporting period using shareholder’s money to buy what looks like a lifeboat but is really a leaky dinghy
he can’t see that it’s a dinghy because he doesn’t understand boats i.e. he doesn’t understand the marketing services industry. Media monitoring is as much a related field as a finger is to a toe. i.e. sort of feels like it’s the same kind of thing but when you properly analyse it, it ain’t nothin’ of the sort
Mr Hodges, on the other hand, played them all like a fiddle. Recognising that most corporate marketers have limited independent and analytical ability, and simply adopt the next shiny thing that industry media and spivvy sales-folks tell them to, he rode the content marketing wave like Kelly Slater and bailed before it sucked up on Reality Reef
Call me cynical, but i bet my bottom dollar that when he gets tired of counting his money, Mr Hodges will go looking for the next big shiny thing in mar coms services and is gearing up to build and flip that too. Maybe VR?
i admire what the man has done – he’s proven beyond doubt that every now and then, a brilliant salesman really is The Smartest Guy in the Room.
Content marketing is still very much in its infancy.
Clients are beginning to seek information, reach out and explore the space… I hope this continues to be encouraged.
As an industry we should be educating the market on the benefits of content marketing. We are not doing as good a job as the northern hemisphere that’s for sure.
Media consumption has changed. Content marketing revolves around content, context, relevance & distribution.
The ability to keep a brand always on, beyond just campaign activity makes sense, especially when it resonates with the audience it was created for. Content challenges the mass reach model in favor of developing a relationship around relevance. That’s why we are seeing the rise of the Influencer, the importance of authenticity and savvy marketers out there scheduling more of their money into sharing their stories in order to connect.
King Content & i Sentia may have their fair share of challenges, so does every media business at the moment. Who isn’t trying to evolve, re structure, change their legacy model or desperately seek their next digital, integrated, programmatic, bespoke edge?
i Sentia has all the ingredients to make this successful as with any new partnership they may just need to adjust their model. Good Luck John & Matt. Keep at it!
I freelanced for them about 2 years ago and vowed never to again. It was a shambolic experience and I simply told the editor it was not worth my while for the pittance I was being paid. They were quite sneaky about the pay rate also – quoting X per word piece and then expecting you to also write a 100-word intro plus this, plus that, none of which was accounted for in the pay rate.
Good writing isn’t about stringing endless ‘keywords’ together. It’s high time agencies and clients understood that the value of this.
Another Steve Jones corker. Great read.
High staff turnover recently.
“the audience has moved on and wants brands to take more time, get to know them, and build engagement over time.”
This has to be one of the most delusional things I’ve read on here, it could be straight off an advertising satire blog.
In this day & age… people want brands to take more time & get to know them. Seriously… just think about that for a second
Shoddy, speculative journalism that really considers the gloss not the substance of the issue. Normally I love your stuff Mumbrella but this one does not hit the mark (both in understanding the numbers, the opportunity or the reasons for the deal).
Excellent article and insight to the workings of this tricky niche.My experience of Australian Content writing showed the inexperience of many brands’ Marketing teams. They so often compared it to SEO or ‘blogging’ writing. Or did not grasp the idea of long term strategy, and the power of well structured content. Brands whose team can’t communicate about a solid marketing product, are creating a wasteland of cheap words. And why Australian content companies are finding it difficult to maintain solid revenue. The quality writers are here but falling on deaf ears. Don’t shoot the messengers. Send your Marketing team back to media class.
As a former King Content employee, “It was sell, sell, sell without the rigour and structure and process to deliver against that” sums it up beautifully.
Having said that, in amongst the shambolic chaos, working there had its moments and Craig was neither the sole cause of the problems, nor its saviour in my opinion, especially if you were just one of the cogs in the machine churning out content the best you can.
“People want brands to get to know them”? Maybe not. But in the increasing deluge of crap out there online, people want to read, watch and listen to things that are relevant to them. Things that are good quality. A big part of the problem content marketing / brand publishing faces is a desire of (some) brands and (some) agencies to do things on the cheap, and if you pay peanuts, well…
Content marketing agencies should be the ones who’re fighting the corner for quality and showing how things *should* be done, rather than taking money anyone offers and churning out crap for a short term gain for the highest margin. Some are. Others aren’t.
So no mention of Paul Ford? – the other Founder. What role did he play in this whole mess for shareholders
Good point! Was wondering that myself
@Simon Hopkins, no offense, but how can you say Content Marketing is in its infancy? Fundamentally, every media owner and direct marketer has been involved in Content Marketing since printing presses began, it was either disguised as editorial or called an advertorial.
I think King and Craig Hodges’ genius was in packaging up a low-margin, high-touch business and make it seem more than the sum of its parts.
Isentia have only themselves to blame, I think @goldfinger summed it up beautifully. Paying that much for a business with no tech at its heart is just stupid…
Buyer Beware…
@Matt B. I think that’s an old chestnut. Yes everyone can point to the Michelin Guide at the turn of the century etc and magazines have been creating “native” content for brands to sponsor forever (they just didn’t call it that). But the idea that brands can be publishers on their own platforms at this sort of scale is new and still very immature in Australia. Just take the fact that for many brands this is a junior position where as in the US the CCO (Chief Content Officer) with a seat at the decision making table is commonplace.
PS. Advertorial is writing directly about products – content marketing isn’t. A common misconception.
I have a friend who worked directly for King Content for a few years including during the transition. They had a revolving door of permanent staff (and freelancers), which meant management of new and existing staff suffered. They took on more work than they could handle and created bottlenecks by not hiring enough staff in key roles. Hearing the stories on a weekly basis from my friend about staff constantly leaving and poor inter-departmental comms, it amazed me that this didn’t come crashing down sooner.
A great example of scaling fast and loose, then selling … and somehow selling but not being at all shackled.
Perfect storm
– new buzzy marketing area with little rigour behind it
– desperate legacy company seeking new angle with access to cash
– no diligence applied to valuation
– opportunist founder there to take advantage of it all
– no earn out
Last time we saw it was Spreets and the scenario was almost the same – overpaid and by the time they realised they didn’t buy much it was all too late.
Spot on, @History repeating: all of these factors are apparent — some in retrospect, but some were bleedin’ obvious from the outset. It’s clear from this piece, and also from what has actually happened, that isentia were/are pretty clueless when it comes to content and content marketing and thus being able to properly evaluate King’s true value, it’s strengths and weaknesses, and even the sustainability of its business model (which appears to have been churn and burn both in terms of staff and customers). It certainly doesn’t help that, as this story clearly points out, marketers and brands also have completely unrealistic expectations about content — what it costs, the importance of having a content strategy, what it can do and how quickly….this is an issue that plagues everyone in the content agency space.
Think bananas in pyjamas . Paul was B2.
Both bananas are very accomplished at building, selling and flipping with special reference to selling. See gold finger. Paul built and flipped an SEO agency with someone else well before google closed that boom niche down. One suspects Paul knew the end was nigh for that niche well before that flip. Craig built stuff too but wasn’t as accomplished in flippingg . Even if you say they’ve not really built and flipped anything that lasted you can’t argue they’ve not been clever. Maybe they should be on a watch list for unsuspecting acquisition virgins for the foreseeable future.
This article unfortunately says more about the lack of understanding about content marketing in Australia than it does about King Content.
Like all bespoke content marketing agencies in the region, King Content’s business and thinking is ahead of the curve, and many of its challenges are unique because it is a different kind of agency that it’s competitors (and clients) don’t quite understand. It is digital first but does minimal media buying and programmatic meaning that it is not an advertising agency. But it is also a more strategic and data-centric agency than a PR or creative agency. Content Marketing agencies of King Content’s ilk are a new approach that the Australian marketing industry refuses to embrace, which is why ads and PR stunts continue to win ‘content marketing’ awards in this country.
As another media agency, we have been working in partnership with King Content for one of our clients. They were an absolute nightmare to work with on the last campaign. A revolving door of contractors, with a new account manager per week – for a 2 month campaign!
Sell sell sell, do it on the cheap, quantity over quality. No surprise isentia bought King. Their modus operandi was just so familiar. King has faltered and isentia has propped it up, selling like mad to try and hide it from shareholders. When staff stop caring about quality a business that says it deals in intelligence loses its credibility.
Excellent and interesting article. I would add that I think it’s challenging for content marketing agencies when so many organisations are investing in in-house content marketing teams.
As described in the article, I agree that content marketing is a long-term game, requiring strategy that is deeply integrated with the business, its value proposition and understanding of its customers to build an audience and rise in the ranks of organic search. For this reason I think companies who truly see the value of content marketing and want to do it properly prefer to invest in people on their teams who are more likely to stay for a couple of years and be intimately involved with the business.
The companies that outsource content marketing already tend to have the mindset of achieving ROI quickly and cheaply – unfortunately setting it up to fail for the agencies that take on the work.
Everyone who is trying to stand up for content marketing and this result are kidding themselves. It’s a methodology that works but it’s better done in house. Agencies just sell, sell, sell and rip off the client using the adage that it takes time.
As an owner of a 4 year old content marketing agency in London, I’m surprised that the focus (or salvation) of a digital campaign is still seen to be ‘content’. What is content without understanding the strategic value or direction of a campaign… it’s meaningless. ‘Content’, be it written, a digital asset, a video, the foundation of a social campaign or whatever, is simply the vehicle used to execute the campaign. The real value or tangible means of justifying any content campaign lies in the strategic and insight stage. Evaluating the opportunity, channels and audience type is a fail-safe way when assessing what content needs to be used. As noted in the article, selling content on a promise without fully understanding how it generates its ROI is a short-lived game. You’ll lose clients quickly and burn cash even quicker.
Amen.
It was a really bad business transaction with no accountability towards the Isentia shareholders. How come CEO and company directors can walk away from this debacle without any harm? They can not wash their hands and just say shit happens. Why they failed to pursue required due diligence beforehand.There are people who lost a large sum of money on ASX, they must be pissed off after reading this. If Craig was guilty so is CEO and rest of company directors.
A friend of mine worked in the creative / content production department of King Content and would tell me stories about crazy management that had little understanding of realistic timelines and were not actually creatively minded themselves. Another complaint was the top heavy structure with lofty job titles. Lots of “Global head of such and such” but no people at the bottom to do the work. Seems there was a lot of talkers and no actual doers.
Well played Hodges, well played
+1 on lousy pay. Difficult work with ultra short lead times, but pay rates of aprox 25-40c on average for the work I was pitched. Err, no, ta.
Kings of content???
They made nothing but crap, why is that never in the discussion. Kings of content made crap content that very rarely connected…just a load of hot air.