What Vox Plans to Do With Its Latest Round of Funding
Digital-media companies continue to build up their war chests.
Earlier this year Vice added $500 million and BuzzFeed took in $50 million, and now Vox Media has raised $46.5 million from equity investment firm General Atlantic. The latest funding round comes a year after the company raised $34 million and values Vox at $380 million, according to a person familiar with the matter and confirming a Re/code report.
As with Vice and BuzzFeed, Vox plans to put the money toward producing more content, with a heavy emphasis on video, and advancing the technology behind creating and distributing that content and ads on its seven sites. But in a new twist, Vox also plans to use its technology to begin aiming that content and those ads outside of its own properties.
"We've developed these great product capabilities that we use internally and they're really robust. Our challenge over 2015 is to leverage those product capabilities in service of our various marketing and maybe publishing partners too. That's a 2015 goal," said Vox Media CEO Jim Bankoff.
Another 2015 goal for Vox Media is growing its in-house agency Vox Creative. Coinciding with the funding round, the company announced that Lindsay Nelso would take over Vox Creative as VP, a newly created role. A former Slate executive who spearheaded that digital publisher's in-house agency, Ms. Nelson is familiar with the growing number of publishers setting up their own ad shops and how similar each of those in-house agencies seem to one another. But she does see an opportunity for Vox Creative to set itself apart.
"When everybody rushes to open up a studio, they're really following that old creative agency model. They're focused on making great work. They're not thinking about the relationship between the work and the distribution and the audience.... What isn't happening and what we're poised to do really well is how do you distribute that content natively to that audience at the right time and how do you deliver scale and efficiency for the advertiser. That's where the separation is going to be," Ms. Nelson said.
Given that Monday marked her first day on the job, Ms. Nelson wouldn't go into detail on how she plans to distribute that branded content outside of Vox's own properties. But Mr. Bankoff teased more of the company's plans in an interview with Ad Age.
Advertising Age: Why do you need this money?
Jim Bankoff: We don't necessarily quote-unquote need the financing, but having a stronger balance sheet and having a partner that has access to capital is always a good thing in an environment where things move so quickly and change so fast.
Ad Age: In memo outlining your plan for the company, you say video "will be our biggest new editorial investment in 2015." How big of an investment: more of what sites like The Verge and Vox are already doing or bigger things like a TV talk show hosted by Ezra Klein?
Mr. Bankoff: In terms of the particular creative ideas, we're going to be rolling them out. We referenced some things in that note, like our partnership with Marques Brownlee and reaching into working with some of the best and most relevant YouTube creators. From a strategic perspective, it's around creating our own video and partnering with great talent to create video, curating that talent and presenting it. So The Verge, for instance, will have its own video, and that will range from series like "Small Empires" -- which you can go on the site and see right now and is more of a longer form series -- to more live coverage of events that we have always been doing but in video format, to partnerships with YouTube creators like Marques. Each one of our seven brands is going to take that approach. Different formats, different partnerships with the goal of making the stuff that's most relevant across any venue where people would want to watch video, which tends to be our sites and YouTube and Facebook and other emerging places as well like Snapchat.
Ad Age: Another investment is Vox's in-house agency Vox Creative. A lot of publishers have branded-content studios these days, and I have a hard time telling them all apart. What will Lindsay be doing differently with Vox Creative?
Mr. Bankoff: I think it's a fair point that there are a lot of them sprouting up, and I think that's reflective of the fact that it's actually something that's working really well for marketers, being able to use content to tell their stories and distribute that content to their audiences. Vox Creative, what distinguishes it from other places is we have an edge in technology that we've always had at Vox and we're able to apply that edge to design and the ability to create high-quality content at scale. Ultimately what that technology and audience advantage gives us is the ability to tell stories that are not necessarily cookie-cutter and apply solutions that are not necessarily cookie-cutter, but to do so in a way that is efficient and scalable and high quality.
Ad Age: Vox Creative has been around for almost two years, but now you've hired Lindsay Nelson from Slate to lead it. What's the significance of hiring Lindsay?
Mr. Bankoff: Well, it's a new position. Vox Creative started a year-and-a-half ago by borrowing different capabilities. Trei [Brundrett] who runs our product group rolled up his sleeves, along with Chad Mumm, who is our creative director. They just got started with it, and before you knew it, we started hiring dedicated people and grew our business. All along, the plan was to get someone who had some strong experience and a point-of-view to run it, and we're really fortunate to find Lindsay to do that.
One other thing, back to your question before. While there are different companies that are providing different content studios, they tend to be limited. Either they tend to be old-school video production or they'll write articles on behalf of clients and not apply much instructed technology. Or on the other end of the spectrum, you have the ones who are just focused on data and technology and highly efficient and highly scaled where they might create a cool slideshow and put an ad on it and call it branded content when really it's not delivering the marketer message. Those are different ends of the spectrum. What our platform enables us to do is tell a wide variety of stories and target those stories to the right audiences using data and creativity. But the spectrum of creative solutions we can offer is broader, and the options and solutions we can provide are more dynamic because of the platform and approach we bring.
Ad Age: There's an underlying theme in the memo of extending Vox Media outside of Vox Media's own properties. You mention extending your publishing and advertising toolsets, Chorus and Hymnal, but there's also this line: "distribute our content wherever valuable audiences reside and in the formats that are native for viewing, sharing and engaging on those channels." That makes it sound like I won't have to go to Vox.com to read a Vox.com story or watch a Vox.com video. What did you mean by that line?
Mr. Bankoff: To create relevant brands for the 21st century, you have to be where the audiences are. First of all, we do have an owned-and-operated footprint which is big. By our measure 150-million-plus. And then beyond that we touch probably three times as big an audience when you look at how our content and how our editorial brands manifest themselves on other platforms, from Twitter to Facebook to YouTube, etc. We want to make sure we go where the audience is, and we are currently doing that whether it's on YouTube or on Facebook. These are big areas of growth obviously, and we want to be serving our audiences there or wherever they want to consume the content. Sometimes that means it drives traffic back to us, sometimes it helps build our brand, sometimes it's consumed there and there's partnerships with a partner like with YouTube or Flipboard.
Ad Age: Facebook's reportedly looking to get publishers to distribute their stuff directly on Facebook, have articles live on Facebook. Is that something you're exploring?
Mr. Bankoff: Well we're already publishing to Facebook [by having Vox's sites posting links to their articles on their respective Facebook pages]. And Facebook's a huge platform, and we're going to continue to work with them and find new ways to make sure we get the content in front of the audience in the right way. We'll continue to work with them and follow it closely.
Ad Age: In your memo, you linked to Vox Media editorial director Lockhart Steele's blog post from earlier this year where he winked at the idea of letting people use Vox Media's publishing toolset Chorus for content posted outside of Vox's sites. That sounds like Chorus rising into WordPress territory. What are you planning?
Mr. Bankoff: We haven't announced anything specific. It was a little bit of a tease. First of all it starts with working with marketers. Marketers looking for more efficient ways to produce and distribute branded content. Our technology solutions can help them there. So that will be our starting point, and we'll have more to talk about there. Beyond that, I think there are ways to work with other publishers. More broadly we've developed these great product capabilities that we use internally and they're really robust. Our challenge over 2015 is to leverage those product capabilities in service of our various marketing and maybe publishing partners too. That's a 2015 goal.
Ad Age: So it sounds like 2015 is the year that Vox Media extends outside of Vox Media properties. Is that a fair characterization?
Mr. Bankoff: Yeah, that will be one of our things. If you look at the memo, the first goal is to build our brands. How we build those brands is continuing to focus on the growth of our websites. But another part of how we build those brands is to focus beyond our websites and off of the Vox Media sites as well.
Another example of that, you've written about our ad units before. That's another way to think of extending our platforms. Our Hymnal platform, which is our ad platform, that's another way to work with publishers as well as advertisers. So it's not just Chorus.
Ad Age: So doing something similar to what Facebook and Twitter are doing by taking your proprietary ad formats and bringing those to other sites or apps?
Mr. Bankoff: What I'll say is they [Vox's ad formats] are built to be extensible beyond our sites.
Ad Age: Soon after last year's funding round, you bought Curbed, and then a few months later you acqui-hired the Vox.com team. Are you planning to use this latest round for acquisitions, and do you have anything specific in mind?
Mr. Bankoff: No, nothing to talk about. Our first order of business is going to accelerate the momentum we already have with our existing brands and with Vox Creative.