Aggregator Corporations Are Buying “Digital Property”

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June 27, 2022 Business

Over the last two years, many firms have chosen an “aggregator” business model in order to merge with and acquire (often digital) businesses that generate dependable revenue. While many trendy aggregators have been buying-up eCommerce companies, other firms are focusing on websites that distribute informational content.

For many years now, investor-backed corporations have chosen to follow this aggregation concept. Put plain and simply: Aggregation is the act of a larger company buying up smaller entities with the intention that the acquisition will further an overall mission. For instance, this is a business model depicted by teams like that of Thrasio–a group that purchases, maintains, and aggregates eCommerce businesses (who are most often Amazon sellers).

In 2021, a startup called TreasureHunter was formed to walk a slightly different road. This firm acquires, operates, and grows content websites, blogs, and online portals. Their team is hoping that “digital demand aggregation” (as this has been named) is the future of online content. Over the decade, these professionals predict that the industry will see an increase in digital content quality, a boost in website valuations, and growth in online competition.

Is Owning a Blog Profitable?

Rather than turning to the nightly news or local radio station, the average consumer receives information from independent industry experts. This shift has driven the success of independent journalists, chefs, travel experts, and others who deliver helpful, truthful content. By distributing reliable information, these DIY website owners are generating revenue from display advertisements, affiliate marketing, and cost-per-click deals.

Currently, 80% of eCommerce advertisers thrive off affiliate partnerships with content websites. As eCommerce continues to thrive, there will be a consistent need to stimulate sales with online content. Furthermore, 40% of eCommerce merchants designate affiliate programs as their top acquisition channel when it comes to sales.

Rather than reporting on incomplete information, the most trusted digital asset owners began by blogging about the activities in which they are experts. Whether it’s cooking, sports, travel, or something else in a given niche–pro-bloggers who have opened “digital property” on the internet are now cashing-in on their passion project.

Digital asset owners and content creators use informative blogs to generate traffic, cultivate an audience, and monetize that information. When an aggregator steps in to buy, these (often investor-backed) companies offer standardized processes, larger professional teams, and bigger budgets.

“The need for high-converting traffic will increase over the next few years, as the eCommerce sector grows, and competition in eCommerce increases,” said Benjamin Schardt, TreasureHunter’s Co-Founder & Co-CEO. “We believe there is a bright future for digital demand aggregation.”

Investors Watch as Aggregators Follow Digital Treasure Maps

Rather than an archaeological dig or deep-sea dive, aggregators discover treasure on the world wide web. The most valuable “hidden gems” are content websites that bring in passive income in the USD hundreds of thousands per year.

These aggregators believe that their business plan is a solution or exit strategy for individual bloggers and small teams that have reached operational limits. In order to grow, leaders at aggregation corporations enlist their large teams to standardize the website’s SEO plan, marketing map, content strategy, social media, website development, and advertising/sales processes. In the end, the intended result is a more profitable and efficiently-run website that sits under the aggregator’s “umbrella” of digital brands.

What’s the Process of a Digital “Treasure Hunt”

For aggregators, the “secret map” starts at the data mining and lead generation stage. Once targets are unearthed, firms will use their M&A team to conduct a due diligence effort and to put a price on the digital assets in question. Firms like TreasureHunter hope to provide a mutually-acceptable acquisition contract to the most desirable leads. As a result, contracts will allow site owners to join the team and grow with their asset–or the asset owner will sell and step away entirely.

What’s more, aggregators like TreasureHunter stress that these deals aren’t all about money. Of course investors must be satisfied. However, once the asset changes hands, TreasureHunter’s team will assess and retain a website’s “DNA”. This process saves the characteristics that make the website special, absorbs content and tonality that the audience finds helpful, and improves upon the more obvious asset flaws.

“We know that when we step in, the blog has already gained an organic following and invested audience. We conduct interviews with the owner to assess the content and tonality that makes the asset special,” said Schardt. “We want to keep that established base and implement our team of professionals to scale up.”

Without changing too much of the blog’s content, corporations utilize their teams to increase the asset’s value. In June 2021, TreasureHunter acquired its first asset, called reisefroh.com. Since then, this German travel blog has undergone a substantial increase in revenue due to efficient processes around sales optimization, traffic stimulation, and content management.

“In the future, we also hope to use our network and portfolio of sites to find comparable synergies that end in mutual growth,” concluded Schardt.

If their “digital treasure map” is correct, many of the sites along the route are already profitable. Rather than worrying about income, blog owners often have other concerns that aggregators can solve.

For example, if digital asset owners formed a blog as a side-business, there may come a time when the project has reached operational limits. If this is the case, aggregators can often shift a blog that started as a side-hustle into a full-time project.

Only time will tell if this “digital asset aggregation” model will be truly fruitful. But, if aggregators like TreasureHunter are correct–the internet landscape will be (once again) changing rapidly. This aggregator model takes into account that greater online competition will drive a competitive asset grab in the future. Investors are flocking and aggregators are gearing up to own their piece of the internet pie before the market jumps.

“We have goals to grow these assets 10x in the years after acquisition, ” said Schardt excitedly, whose team is in the process of onboarding new websites. “As we look forward, we intend to acquire several assets from North America, Europe, and all around the world.”