Why News Corp is buying Unruly
News Corp’s acquisition of Unruly – a sexy poster child of Tech City – will undoubtedly generate a lot of noise. After all, it’s Rebekah Brooks' first big move since she returned to the public stage.
Julie Langley
However it’s not dissimilar to what a lot of traditional media groups have been doing recently – beefing up their ability to work with brands to find more engaging ways of communicating with consumers beyond simply selling space in newspapers, on TV and online, and answering the question of how to compete for spend that is increasingly going to the likes of Vice, Instagram etc.
Many diversified media groups have been buying into adtech in recent years, looking to go on the front foot in the battle to protect CPMs and the value of their audience. Traditional publishing ad revenue is in freefall and TV is under increased pressure and like its competitors, News Corp clearly understands that it has to have a much more interesting, varied proposition to offer brand advertisers. Not only that, earned media has to be part of that offer, alongside traditional paid media. Unruly helps News Corp play in the earned media space, as well as providing a presence in some of the fastest growing areas of ad spend – social, video and native.
The deal is structured with a very sizeable earnout, reflecting that this is a people-based deal as well as a tech deal, and will require News Corp to keep the business independent at least until the earnout expires.
And why might Unruly have decided to sell now? A number of its competitors have become part of larger groups in recent times: Adap.tv sold to AOL in 2013; LiveRail sold to Facebook in 2014 and Brightroll to Yahoo a few months after that. Quite naturally, Unruly would want to secure the advantages that come with being part of a larger group including audience reach and advertiser relationships.
There are bound to be cultural challenges. While News Corp has a history of buying innovative, disruptive businesses it hasn’t always provided them with the right environment to allow them to survive and thrive. Having said that, the world had changed and News Corp will have learned many lessons along the way. Moreover press announcements make it clear that Unruly will remain independent.
While this deal is about social and video, what might we expect News Corp to do next? I think we’ll see it doing things in content, data, online 2 offline, maybe shopper, as it looks at new and innovative ways to provide brands with effective means of engaging with their customers.
The Unruly acquisition will also be a valuable tool to help engage with the notoriously difficult millennial audience. News Corp might not know how to do this, but Unruly certainly does. It’s not surprising that News Corp would want some of this secret sauce.
Julie Langley is a partner at Results International