While the volume of deals (acquisitions and capital raises) in the local media space hasn’t really grown much this year, the volume of these deals exploded, according to BIA/Kelsey’s deal tracking effort called Local Media Investment Watch. Deal value across the local categories LMIW tracks grew by 65 percent to $10.2 billion year to date.
Today at BIA/Kelsey’s Leading in Local: Interactive Local Media conference, BIA/Kelsey analysts Jeanne Datillo and Jed Williams, architects of Local Media Investment Watch, shared some compelling data points that draw a picture of where the local media energy and investment interest lie.
Online was one of the fastest growing categories in terms of deal value (deal volume actually declined), expanding 150 percent so far this year. What drove this? According to Williams, the activity centered around digital services that drive engagement, upsell and retention — think CRM, online scheduling and merchant services. Examples include Open Table’s acquisition of Urbanspoon’s Rezbook reservation management system, and Hotel Tonight‘s ability to raise a $45 million funding round.
“This will accelerate over the next year,” Williams said. “As more investment, more agencies pushing into this space.”
Datillo also noted the home services space (which includes real estate) continues to attract deals. Examples? Trulia bought market leader, a tech platform for the real estate industry, for $335 million. “There is continued green space in the home services sector,” Datillo said. Other verticals are getting investment as well, noting recent deals involving Zoc Doc (medical records) and Wedding Wire.
“If you can innovate and be creative around niche verticals, you will get money,” Williams said.
What about social? Williams asked, “Consumer facing asocial networks, when does the door close?”
“If a social platform is creating a niche for a target audience, there is a good chance to get some investment.” Examples? NextDoor (raised $60 million), Path (raised $50 million), and Snapchat, which reportedly turned down $3 billion from Facebook.