Deals flow where audiences go

March 2021

While the normality of 2019 seems a distant memory for so many facets of our lives, the gears of global banking and finance have seemingly kept turning unabated. While we are very much in the midst of the coronavirus pandemic, the global economic system has been encouraged to keep moving by extraordinary interventions in every major economy worldwide.

Against this backdrop, and with 2021 looking a more volatile year than most, we can learn a lot by looking at the decisions made by the collective brainpower of city analysts and venture capitalists.

What hotshot startups are attracting the most funding? What industry titans are partnering in interesting ways? And how are long-standing media brands showing the city that they are revitalising themselves to stay relevant to peoples’ lives?

From a media and marketing perspective, following the money is, by definition, the best leading indicator of where banking’s smartest people think audiences are headed.

Venture Capital

In the otherwise murky world of private investment, the aura surrounding media and tech VC firms is palpable. In Silicon Valley and beyond, their king-making, crystal ball ability to predict the next Google or Snapchat is almost as famous as the entrepreneurs that they fund.

CrunchBase – the industry ledger for funding and acquisitions – is a useful temperature check of what is attracting the attention of these modern-day oracles. The database highlights a promising seed round for UK-based Programmai, whose approach to machine learning promises to radically lower cost per acquisition for growth-focused companies and has been proven for ecommerce brands such as Treatwell. To take their proposition at face value, manually eking out incremental performance from digital campaigns could soon be a thing of the past.

Elsewhere, recently funded firms include Digiday’s Europe Media Awards 2020 winner Moonbug Entertainment. Only founded in 2018, this kid-centric entertainment brand started off on YouTube and other digital channels, but is more recently expanding on to traditional TV rosters, including the HBO Max service in the US and Virgin Media in the UK. In less than 24 months Moonbug has achieved funding of over $265m, convincing investors thanks to their vast, kid-safe content library, universally appealing characters that cut across geographic boundaries, and aggressive expansion plans.

Public markets

On the other end of the spectrum, publicly listed companies have a duty to report their financial performance, and anyone can buy and sell a slice of them.

Thanks to heavily advertised apps such as Trading 212, this is even possible in minutes, on your phone. Sifting for the growth potential of large, established companies is at the same time both a seamless but dauntingly difficult task.

According to the Motley Fool, media brands’ stocks should be evaluated according to a number of critical factors:

• their ability to bring in and keep a big and ideally unique audience;

• diversify the mix of audiences they attract, to spread risk;

• energetically pursue technology options that get to those audiences, ideally directly;

• and boast a cash-positive balance sheet, to expand relevant content and enable future acquisitions

Through this lens, this sets a very high bar for media brands to succeed – Disney and Netflix are among only a handful of brands that tick all these boxes at a global scale. There are a couple of common lessons that any marketers could take from these titans’ continued success.

For instance, they share a truly progressive attitude to continuous innovation, often leading the industry in tech adoption. Few remember Netflix as a DVD postal delivery service. Even the 20th century film, cartoon and theme park mogul Walt Disney could never have imagined his parks moving into immersive, VR-driven live experiences.

Finally, how they handle their major franchises is instructive to any brand custodian. They build up their intellectual property through carefully considered pushes into new avenues – as with Disney retelling and expanding the Marvel Universe into new channels and instalments or making Star Wars relevant to new generations through expanded storytelling.

In each case – and whether scrappy start-up or decades-old institution – brave innovation is the only route to sustainable growth, and the only way to keep returning value for investors.