News Corp announced today that, subject to closing conditions, it had agreed to buy Unruly for US$90 million cash upfront, and then a further sum, up to $87 million, based on its performance. The deal is expected to close before the end of September.
For News Corp there is the obvious benefit of using Unruly tech to increase the reach of its content, and with video increasing rapidly in consumption on a global basis, it makes sense to focus on this medium. Traditional news publishers are constantly having to evolve, and whilst they will always be able to transfer their news content to the web, through the use of video they will be able to appeal to a much wider audience.
The downside of this is that video consumption is increasing most among the millennial audience who are, specially in the UK, cynical to say the least of News Corp titles, said Giles Henderson, VML's regional director of media and channels.
How News Corp will monetize this tech acquisition will be the key area of interest for the advertising industry. "If the focus is on increasing the reach of its content, which they state that it is, then will we see News Corp pushing pre-roll on their own video content more?" Henderson asked. "And which channels will they try to do this through? Or will the content have to be sponsored instead to assuage the publishers who traditionally take Unruly video?"
Another crucial point is the fact that the majority of Unruly pre-roll is placed on news websites. No one can deny seeing a Daily Motion or Mashable listing in their programmatic placements. "So will those websites block any news content from News Corp?" Henderson wondered.
Unruly will operate as a separate business unit within News Corp, and will continue to be run by its three founders: co-chief executive officers Scott Button and Sarah Wood, and chief technology officer Matt Cooke.
Wood commented that the acquisition would help Unruly grow its international footprint, "particularly strengthening our presence in the US and Asia-Pacific, which will begin next month with the launch of Unruly Japan in Tokyo".
According to Prantik Mazumdar, partner at Happy Marketer, the deal is a win for both companies. NewsCorp would be able to bolster native video advertising and sponsored content capabilities to compete against new media channels like Buzzfeed, Vice Media and Snapchat.
The three founders will report to News UK’s chief executive, Rebekah Brooks, who returned to the role in the past few weeks after being forced to resign in the wake of the phone-hacking scandal at News UK’s newspapers in 2011.
Brooks said: "We look forward to working with one of Europe’s most highly regarded tech teams to create new premium video inventory for our News UK mastheads and other businesses, and to provide advertisers with best-in-class brand solutions across all platforms."
Unruly was founded in 2006 and uses sharing data to predict if a film will go viral, or ways to improve its chances of being viewed or shared. It also offers in-feed mobile advertising technology, among other things.
In the coming months, News Corp’s businesses, which include Fox Sports and Harper Collins, will offer Unruly products to advertisers and agencies. Unruly will continue to work with its existing roster of clients.
Robert Thomson, the chief executive of News Corp, said: "Unruly complements our traditional editorial and commercial expertise with contemporary insight into how people read, watch, buy and sell in the digital era.
"We have a track record of acquiring businesses with unique capabilities, allowing them the freedom to do what they do best, while providing a global platform to accelerate their growth and realize their potential."