The Rise of Intent Media: How SEO Is Molding the Media Industry in Its Image

When lifestyle media company Dotdash announced plans to acquire Meredith Corp. for $2.7 billion last October, the deal carried with it an unmistakable air of symbolism: the new, digitally-native operation had finally supplanted the old, ink-entrenched publisher. But the significance of the acquisition extended beyond its optics––the deal also validated a thesis nearly a decade in the making. Dotdash Meredith, along with a handful of other media companies including Red Ventures, Ziff Davis, Recurrent Ventures and Future Plc., employs a business model now referred to as intent media, a commercial strategy whose core premise involves creating content that answers the specific search queries of consumers. An evolution of search engine optimization, intent media removes much of the guesswork that has long beguiled publishers, making the model attractive for investors and advertisers, as well as lucrative for its practitioners, said Michael Hirsch, a managing director at the M&A advisory firm JEGI Clarity. Last year, the media divisions of Future Plc., Ziff Davis and Red Ventures generated $700 million, $1.1 billion and $2 billion in annual revenue, respectively. And last July, months before it acquired Meredith Corp., Dotdash boasted a combined adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 31%, compared to a margin of 4% for BuzzFeed, Inc on the same basis. What to Know About Mel Magazine’s New Owners, Recurrent Ventures “There is nothing new about what we do,” said Neil Vogel, the chief executive of Dotdash Meredith. “We do essentially what a service publisher did 30 years ago, except that the internet fundamentally changed the business. The concept is simple––gain audience trust, then monetize that audience––but the execution is complex.” The success of the model has led to imitation, as the playbook that once helped Dotdash rise from the ashes of About.com has now become an open secret. Challenger brands including Money Group, Wild Sky Media and Trusted Media Brands have all embraced the format. Its ubiquity also comes as a response to other pressures shaping the industry, including the central role that Google plays in the editorial strategies of publishers, as well as the adoption of new advertising models in the face of looming shifts in privacy regulation. The set-up is not without its drawbacks: Intent media places publishers in the vulnerable position of relying on a third-party platform for traffic, and it suits lifestyle titles better than news operations. But in the ongoing search for financial sustainability, intent media represents a new horizon for publishers. Intent media caters to Google and consumer needs The rise of intent media coincides with the increasing importance of Google, not only as a source of traffic but as a fixture in the digital economy, said media consultant Troy Young, the former global president of Hearst Magazines. Roughly 54% of external traffic comes to publishers via search, according to Bonnie Ray, the vice president of data science at analytics firm Chartbeat, and social media platforms like Facebook have declined in recent years as sources of traffic. To more effectively capture search traffic, intent media publishers deploy a number of measures designed to curry favor with the Google algorithm, such as reducing ad load and page latency. To streamline the performance of its portfolio, Money Group took its ad revenue to zero before rebuilding its monetization software from the ground up. These companies update their evergreen material to keep it accurate and optimized for critical key words, and they enlist the services of professionals, such as healthcare workers or financial experts, to bolster the authority of their writing. The measures seek to appease Google, which aims to surface results that best serve its users. As a result, the model aligns the incentives of publishers, search engines and consumers, according to Young. “The model pays publishers when they serve the consumer, which is not what advertising on web pages has historically done well,” Young said. Intent media generates revenue through affiliate programs and contextual advertising Intent media works well because it combines the elegance of contextual advertising with the measurability of the internet, said media consultant Brian Morrissey. When someone types a question into a search engine and visits a web page promising to help answer that question, the publisher of that content can serve highly relevant ads to the user without collecting their data or needing to track their behavior. Given its efficacy and privacy compliance, contextual advertising has ballooned in popularity. In 2022, brands plan to spend about 20% of their media budget on it, and the global market for contextual advertising is expected to reach $631.4 billion by 2027, according to a July report from the investment firm The Benchmark Company. While contextual advertising existed prior to the internet, the attribution capabilities of digital advertising now allow publishers and advertisers to know who took action on a given ad. By marrying these factors, intent media allows publishers to serve highly performative ads in a privacy-compliant fashion––a holy grail of digital advertising. And while the advertising itself draws higher CPMs because of the likelihood that it is reaching a relevant user, the real money comes from its ability to generate affiliate revenue, according to Young. Internet users searching for specific products are near the bottom of the sales funnel: they have a high intent to purchase. Using an affiliate program, publishers that surface favorably in search results can then receive a bounty from retailers for getting consumers to click a link to their product and, theoretically, make a purchase. In a media industry often defined by smoke and mirrors, the model makes value transparent. As a result, its intelligibility has attracted private and venture equity funding, as investors see a clearer path to returns in a framework that prioritizes the quantitative over the qualitative, Hirsch said. “The market has proven that publishers who provide useful information to shoppers are valuable to advertisers,” Hirsch said. “The model has attracted renewed interest from the private equity community because it has been proven to work.” Publishers’ Affiliate Revenues Are Flagging—These 4 Charts Show Why