Why IAC is creating a new media division
IAC announced on Wednesday that it was creating a new division called IAC Publishing. The digital media group, which includes About.com, Dictionary.com, Investopedia and The Daily Beast, will have a reach of more than 100 million monthly U.S. readers.
"We are intensifying our focus in digital publishing at IAC," said IAC Publishing CEO Doug Leeds. "We have been operating these businesses independently and figured there's a lot more we can do when we aggregate this scale."
IAC's media and Internet portfolio includes Vimeo, CollegeHumor, HomeAdvisor and its dating sites Tinder, Match.com and OkCupid, among others.
Leeds, who previously ran IAC's Ask.com, emphasized that there was no talk spinning off the media division into its own separate company. The move was made because IAC noted how digital advertising spend was increasing, and believes it will overtake TV.
A report from Magna Global said that TV ad spend will reach $503 billion globally and take a 38.4 percent of the ad market this year. However, its share is expected to decline slightly in 2016.
Digital media ad spend on the other hand, will increase 17.2 percent in 2015 and is expected to grow another 13.5 percent next year. The report projects digital media advertising budgets will exceed TV by 2017.
Over the years, Leeds said the IAC spent more than $500 million building up its media properties. IAC Publishing will allow each publication to share its property resources with each other.
Leeds is most excited for the prospect of being able to leverage data analytics capabilities across the company. For example, he said IAC is seeing connections between people who like fitness and motivation and those who are interested in social marketing, or that people using Microsoft Windows tend to also like travel blogging and Bollywood films. About.com's content scientists were able to increase site engagement 15 percent by delving into its analytics, per IAC.
"We've built great brands, but across that is an opportunity to use things like data to better connect advertisers and the readers who access (these sites)," he said.
The publications will also have access to Focus, a programmatic ad platform built for Dictionary.com, as well as BrandBeast, The Daily Beat's branded content studio. Leeds said that it has seen 150 percent increase in branded content revenue, and 20 percent of those deals are being driven due to the IAC's ability to analyze its data for better ad targeting.
"Internet advertising is continuing to steal money from traditional media," said digital media analyst Rebecca Lieb. "There's also new forms of monetization from paid forms of media, like native advertising."
Lieb said that by combining the IAC's top publications it will be able to create a more efficient organization. She sees this as a way for IAC to strengthen its hold in the media and digital advertising business.
"It looks like the IAC might be trying to make a stronger foray into online publishing," she said.