The sale of King Content is a game changer for the Aussie content marketing industry
Last week Isentia bought King Content for a massive $48m. In this opinion piece David Pembroke examines what it means for the Australian content marketing industry.
As I wandered back into my office last Friday morning one of the team yelled out, “So have you heard the news about King Content?”
“Nope,” said I, thinking, “What has Hodgo (Craig Hodges, CEO and Founder King Content) done now, opened an office in Belize?”
“Isentia has bought them for $48 million,” replied the same team member.
“What? $48 million? $48 million!!!!!! $48 MILLLLLLLLIIIIIIIIIIOOOOOOOOONNNN!!!!!!!”
I delighted for my mates Hodgo, Fordy (Paul Ford), Todd (Todd Wheatland) without a doubt, (your shout in Cleveland boys), but I was even happier for content marketing.
Here in one eye watering, jaw dropping announcement was the market’s validation of content marketing. It’s not a trend, it’s not a buzzword and it’s not a waste of time. It’s a thing. And as luck would have it, a very valuable thing.
In recent times the haters and trolls have been out in force sneering and muttering. For whatever reason, content marketing has been bucketed by those who apparently know better.
So when a bloke like John Croll (CEO, Isentia) pulls out his cheque book and signs over $48 million, it’s a big deal.
That announcement one would hope will put a muzzle on the critics and encourage them to spend a little more time investigating the intriguing world of content marketing.
As defined by the Content Marketing Institute (www.contentmarketinginstitute.com):
“Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.”
So that’s it. No ifs, no buts, no maybes.
contentgroup’s focus is on government so we have adapted the definition. Instead of “attract and retain” we say “engage and inform”. Instead of “profitable customer action” we say “citizen or stakeholder action”.
Same process, different objectives.
Content marketing is a relevant, strategic and ultimately effective business process for anyone with a story to tell. Be you a private sector company, a not for profit, a non-government organisation or government.
I don’t have the time today to explain it for you in detail but I can say that I firmly believe that content marketing will be the default approach to communication in the future.
Technology has democratised the factors of media production and distribution. Everyone can now be a media company. The challenge is how you make the most of that opportunity.
At the same time, technology has also shifted the power from the producer/distributor to the consumer (citizen). People now decide the information, education and entertainment they receive, when they receive, on which device and in what format. They are now in control. If you want to earn a share of their scarce attention of the people you need to connect with in order to achieve your objectives, you had better make sure your content is useful, relevant and valuable.
Everyone is on the grid. The way to activate the connection is through content marketing.
This change is why Isentia bought King Content.
King Content is a pure play content marketing agency. They know the business inside out and back to front. Craig Hodges and his team capitalised on this market disruption early and went hard to build a global footprint. They expanded to London, New York, Singapore, Hong Kong and Melbourne, employed talented staff, built some useful technology and in turn won some great global contracts. We should all be very proud of what they have achieved.
While the practice of content marketing is old (creating useful, relevant and valuable content to create trust with an audience) the name is young and unfamiliar. I predict that soon the hostility will die off and we can all get on with telling great stories on behalf of our clients in order that they achieve their objectives.
As an aside, I would describe the combination of John Croll and Craig Hodges as “formidable”. My bet is that these two old bulls will get cracking on the huge opportunity ahead of them and what we have seen to date is very much the end of the first chapter of the King Content story, not the end of the book.
- David Pembroke is founder and CEO of contentgroup
“Here in one eye watering, jaw dropping announcement was the market’s validation of content marketing. It’s not a trend, it’s not a buzzword and it’s not a waste of time. It’s a thing. And as luck would have it, a very valuable thing”
Q: if it’s so valuable, why would you sell it?
A: smart people sell at the peak of trends
Q: if it’s at the peak of a trend, why would Isentia pay top dollar for it?
A: they’re a monoline listed media monitoring company looking to diversify through acquisition and aren’t spending their own money, are they?
Q: then why does David Pembroke think this purchase is a validation of content marketing?
A: might have something to do with the fact that he makes his living through content marketing
User ID not verified.
Content Marketing agencies need to learn the basics or duplicate content, this article was on the authors site 1-2 days prior to Mumbrella:
http://www.contentgroup.com.au.....-industry/
User ID not verified.
Sammy, Thanks for the response.
I’ll have a crack at your questions.
Q. If it’s so valuable why would you sell it ?
A. I haven’t spoken to anyone at King Content in detail so I don’t know the actual reasons but I would speculate that having started the firm in 2010 with a small amount of capital, a good idea and plenty of energy, they decided that $48 million (60% paid on sale) after 5 and a half years was a good return for their efforts. Also King Content is now part of a publicly listed firm that has 3,500+ clients and an impressive footprint across Asia. There is plenty of money washing around in the markets for good businesses so as content marketing continues to prove its value, King Content will have a much greater capability to access capital to grow. I’m sure John Croll has the right incentives in place for the King Content team, so when they deliver (which I predict they will …. in spades) they will share in that success. I think they’ve been smart.
Q. If it’s at the peak of a trend, why would I sentia pay top dollar for it?
A. That’s the point. content marketing is not at the peak of a trend. The game has barely started. The Americans like to use baseball analogies to describe the maturity of markets. The Content Marketing Institute says content marketing is at the “bottom of the second innings”. In Australia, “the team are still on the bus on the way to the field”.
And as for paying “top dollar”? Remember everyone thought Facebook paid “overs” for Instagram and look how that worked out. It all comes down to execution and they will execute. Trust me.
Q: Why does David Pembroke think this purchase is a validation of content marketing?
A. It has everything to do with the fact I make my living through content marketing. Guilty as charged. What has happened here is that a publicly listed company has bought a content marketing agency at an EBITDA multiple of 10x. There is now a market for the sort of company I own so that puts a very big smile on my face. The analysts will start to research content marketing and understand how it all works. Their will be greater transparency and scrutiny. That has to be a good thing. As an aside, I started contentgroup way back in 1997 when I left the ABC. This whole notion of using journalistic skills to create content to tell stories in order that clients could achieve their objectives has been on a slow burn. This transaction brings content marketing into the spotlight (at last!!) and that has been to be a good thing for everyone in our industry.
Thanks Sammy
Happy to answer anymore questions if anyone wants to post and thanks to Mumbrella for publishing my piece.
By the way for those of you with an interest, the FY15 results for ISentia have a clear explanation for the strategic rationale for the purchase. It’s on their website and worth a read.
David Pembroke
User ID not verified.
I remember when Spreets was bought by Yahoo.
User ID not verified.
Very true, AKA; Enabling brands to self publish. History is littered with good and bad buys. PS Don’t forget Governments, NGO’s and not for profits can also self publish with CM.
User ID not verified.
loved your snappy comeback @enabling brands to self-publish
the deal-a-day sales at peak trend (prior to collapse) is an excellent analogy
and let’s not forget Time Warner’s purchase of AOL…..
David, if you look at many of the post-analyses of mergers or acquisitions made by publicly listed companies, you’ll find that most are net value-destroying for the acquirer
they usually overpay, overestimate “synergies” and.or fiddle and interfere too much
why does this happen so often? because listed companies are expected to always be growing earnings, always expanding their revenue streams, and executives simply like to buy businesses. It’s the retail therapy of the corporate world, for big swinging dicks
.if they have capital for acquisitions, it burns a hole in their pocket…and always remember that it’s shareholder money, not their own…
User ID not verified.