Thursday, October 6, 2011
Interview with Jerry Ropelato, TechMediaNetwork
Ogden, Utah-based Tech Media Network announced a huge, venture funding round a few weeks ago worth $33M--probably one of the biggest fundings in the region in the last year. The firm owns a network of content sites, such as Space.com, NewsArama.com, and TechNewsDaily, and has been growing its network both through its own properties and partnerships with others. To understand better what the company is building, we spoke with Jerry Ropelato, the CEO of the company. Jerry tells us more about how Tech Media Network it is building out its network and business, and what exactly the firm hopes to do with its big funding round.
First off, for those not familiar with the full extent of your online network, can you tell us a bit about the network?
Jerry Ropelato: As you may be aware, we have sixteen owned and operated sites, and another 135 other web properties which are part of our publisher network. It's a publisher network where there is content that might be syndicated back and forth. The primary emphasis of our company is helping publishers monetize their content. Our strength as a company is we are good at monetizing content, news, reviews, whether that is video or text, which is why so many of our content partners join our network. Let's be honest--most publishers are very good at publishing content, but most of them come from the print world, and have struggled to make the transition to the digital world. They just don't know the best methods on how to monetize what they are producing.
So you have both your own publications and an ad network?
Jerry Ropelato: Correct. We are much more than an ad network, however. Yes, we serve up ads, but we actually work with publishers from a search engine optimization point of view, helping them with SEO needs, to get them more traffic. We also help them in monetization methods, whether that is display ads, e-commerce ads, affiliate relationships, lead generation, and with performance types of things like pay per click, pay per lead, or pay per play, things of that nature. I don't even consider us an ad network, we're really a publisher network. At the end of the day, the way we look at it, publishers are good at creating content, but don't know how to drive traffic and monetize that traffic, and we're here to help them.
How did you end up in this business?
Jerry Ropelato: We started our company eight years ago, and were very much about creating good quality content and figuring out unique ways of monetizing that content. To be honest with you, we didn't sell our first ad until about two years ago. We had spent six years of our company history without dealing with display. However, when we looked at the opportunities where the market was going, we felt that our strength was helping others with publishing content. It's a new age of publishing, and the three key elements of this world are production of the content, monetization, and syndication. We have spent years building relationships with lots of different firms, and building a back end platform where you are actually able to measure performance and monetization. Small publishers have no way of doing that, and that's some of the things that we help them do. They can do what they do best, which is typically create content, and at the back end we're able to measure that and make it a profitable venture.
An example of that, is when we acquired the properties of Imaginova, including Space.com, LiveScience.com, and Newsarama.com, they were struggling. They had invested a lot over the years, and those sites never got to profitability. However, it took us 45 days to completely turn them around, from struggling operations to very profitable operations. We were even able to double staff, after they had been cutting for years. Those are the types of things we're going to do with all of the publishers in our network, to make them a success in the digital world.
It looks like some of your business is helping those old line, print publishers transition to the Internet?
Jerry Ropelato: That's part of it. But, there also lots of opportunities to take pure digital companies, who have started with a small blog, and who are still struggling about how to make money on this, and expand upon it. Let's be honest--in today's world, anyone can start a blog and create content, but it really takes expertise to figure out how to pay for editorial staff, unless you're just doing this as a hobby and passion in life. We've been pretty successful there. We don't take every publisher. We're pretty particular, we're looking for good quality content publishers who want to join our network, but we won't just take anyone.
The funding round you announced recently was probably one of the largest in the region in recent months. Why so much and what are you planning with that capital?
Jerry Ropelato: I'd love to say that was because we're great negotiators. But, what we had done is we had talked with a number of growth equity players out there, telling them we were looking for a big round so we could do some acquisitions. We ended up with six offers on the table, and looked at all of them very carefully. We chose ABS Capital to help us, because they told us that if we needed additional capital that could help. It's a great partnership. I think if you were to ask them what they thought they saw in us, they would point to the growth we've accomplished, the quality content, and frankly, our ability to monetize that content.
To your second question, that funding will go for one of two purposes. One, is internal growth, creating more content, and expanding on what we've created. And, second, for acquisitions. We've made two acquisitions to date. We just close on LAPTOP Magazine on July 12th, and we're also looking at additional acquisitions. If you ask me who we are looking at, and what we're looking at, I can't tell you. But, I will say, we are looking at acquisitions in one of three areas. One, is quality content producers, companies that have a unique monetization implementation, and the third is content syndication companies. It's from one of those three areas that our acquisitions will come from.
What is the magic that allows you take these publications--which aren't able to make money, and actually turn them around?
Jerry Ropelato: If I told you, I'd have to kill you (laughts). What I can tell you, is we're very good at taking a look at the weakness of properties. For example, is their search engine optimization really poor? We help with that. And, let's be honest, producing content has costs associated with that--if you can double their eyeballs, you can double their revenues by doubling those eyeballs. Sometimes, it's just a matter of getting more traffic there. Using LAPTOP magazine as an example, they had struggled through a bankruptcy situation, when we came through and worked through the details. We acquired the assets of that company, did things which had the greatest impact, and almost immediately we were increasing traffic, page views, and implementing monetization techniques which frankly are pretty normal for us, but were foreign to them. I think that's the classic example. It was a great match, for both of us, and I think we've been able to take what was a struggling property and turn it around, making it very stable for the future.
What are some of the things you've learned about making a profitable publication and site?
Jerry Ropelato: What I've learned is, especially in publishing; don't put all your revenue streams or eggs in one basket. Diversify your revenue streams. There are so many publishers from 10, 15, and 20 years ago who only think about display advertising. I love display advertising, but if you look at 2009 when everything tanked, that was why so many publishers went out of business. I think the best lesson we learned during that time was that you have to diversify your revenue streams. This business is changing so fast, don't think you can assume what works today will work three months from now. I think you have to look at new opportunities, new revenue streams, and make sure you're staying on top of all of that. That's the lesson.