Insider Inc. will combine with eMarketer next year, with the goal of creating a large, fast-growing research and data firm unified by its focus on digital transformation.
Existing clients will gain access to data and research across eMarketer and Business Insider Intelligence.
“We think by combining, we can serve clients with a much wider range of service and insights,” said Henry Blodget, Insider Inc.’s founder and CEO who will lead the combined group.
Both eMarketer and Business Insider Intelligence cover advertising, but Business Insider Intelligence also covers a broader set of research topics, including financial services, health care and transportation.
Together the two companies serve 1,300 clients, with only 30 overlapping clients. EMarketer’s research business is significantly more robust, accounting for 1,100 of those 1,300 clients.
But while eMarketer has built a strong client base deep in marketing and advertising, Insider Inc. has access to a broad group of business readers, some of which would likely pay for research if they had easy access to it.
“One of the philosophical reasons we are doing this is the consumerization of the enterprise, as we are seeing in tools like Slack, where they are adopted first by small work groups and then spread throughout companies,” Blodget said.
Creating a marketing funnel from editorial content is part of the strategy behind combining the two companies.
They see Insider Inc.’s free, general interest business content as a hook to attract a broad group of business readers. Business Insider Prime will then draw in a subset of subscribers to its in-depth industry coverage. At the bottom of the funnel, Business Insider Intelligence and eMarketer will serve companies that need in-depth research and data to support their own strategy and operations.
The editorial-to-research “funnel” model makes sense because research is no longer information bought centrally and disseminated only to top executives – who were too busy to read the research anyway.
The combination isn’t about realizing any cost savings, but purely about growth. About 200 people are in the research roles across the two companies right now. That number will increase 20% next year, and another 20% the year after that.
Axel Springer paid $242 million for eMarketer three years ago. Business Insider commanded a $390 million valuation when Axel Springer acquired it nearly four years ago. Axel Springer itself was just valued at $7.7 billion as it reached a deal with private equity firm KKR to buy out its minority shareholders and go private.
Combining Insider Inc. and eMarketer wasn’t part of Axel Springer’s original plan.
When Blodget joined the board of eMarketer as an observer after the acquisition, “it was immediately obvious we could do a lot together,” he said.
But each company had a clear plan for the years after the acquisition. The three-year mark of the eMarketer acquisition has passed, and co-founder Terry Chabrowe plans to retire at the end of the year, so the merging of the two research firms felt right.
And research is in need of its own digital transformation – which Blodget plans to execute.
“People want to consume research and insights about their industry the same way they have changed how they consume news and information, with a feed or stream to spread the research, insights and information – and spread farther beyond the executives who read a thick, paper research report that took a year to write.”
This post was syndicated from Ad Exchanger.