For investors and the businesses they support, aggregation has been going on for years. To put it simply: Aggregation is the act of a larger company buying up smaller entities. For example, this concept is depicted by firms like Thrasio–a team that acquires and aggregates eCommerce businesses.
Now, some aggregators have begun buying digital assets that generate consistent revenue. Instead of buying businesses that focus on eCommerce, the newest aggregators are focusing on websites that distribute informational content.
The most recent example of this idea comes in the form of a startup called TreasureHunter. This firm acquires, operates, and grows content websites. The team is hoping that “digital demand aggregation” (as it has been named) is the future of online content. In the coming years, these professionals predict that the industry will notice an increase in digital content quality, massive growth in website values, and greater online competition.
How Do Blogs Generate Income?
Rather than tuning into the nightly news, the average person finds information via independent industry experts. Notably, this trend has driven the success of entrepreneurial journalists, chefs, travel experts, and others who deliver helpful content. By delivering reliable information, these website owners are generating revenue from display advertisements, affiliate marketing, and cost-per-click deals.
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.
Most digital asset owners began by blogging about the activities in which they are experts. Whether it’s cooking, sports, travel, or something, even more, niche–pro-bloggers who have opened their own space on the internet are now cashing-in on their passion project(s).
“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.”
Aggregators Invest in a Digital Treasure Map
Rather than digging underground or diving deep under the ocean, aggregating firms are discovering online gold. These “hidden gems” are content websites that bring in passive income. The best “treasures” are niche content sites that make hundreds of thousands in USD every year.
Aggregator firms hope that their business plan acts as a solution or exit strategy for individual bloggers and small teams that have reached their 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 result should be a more profitable and efficiently-run website that sits under the firm’s “umbrella” of digital assets.
Processes Around The Digital Treasure Hunt
For aggregators, the “secret map” begins by mining data and uncovering leads, or “hidden gems”. Once found, aggregation firms must conduct due diligence and evaluate digital assets using a dedicated M&A team. In the end, firms like TreasureHunter hope to provide a mutually-beneficial acquisition contract that allows asset owners to join the team and grow, or asset owners to step away.
After the asset changes hands, aggregators like TreasureHunter stress that these deals aren’t all about money. Of course, investors must be satisfied. However, TreasureHunter’s team makes an effort to assess and retain a website’s “DNA” after the transaction.
“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 the content or the tonality of a blog, these corporations utilize their team to increase the asset’s value. For example, TreasureHunter acquired its first asset, called reisefroh.com in June 2021. Since then, the German travel blog has undergone a large increase in revenue due to efficient processes regarding sales optimization, traffic simulation 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.
Only time will tell if the “digital asset aggregation” concept will be fruitful. However, if aggregators like TreasureHunter are correct, the internet landscape will be changing rapidly. In the future, these firms expect to own a solid chunk of “internet property” before highly-competitive asset grabs happen.
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