How OODIENCE Uses Demand Generation for Maximized Exits

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When selling an online business, of course, you want to get as much money as possible. You’ve dedicated countless hours and put everything you’ve got into building the business and making it a success, so it’s only natural to want a nice financial reward when you’re ready to walk away.

Recently, I reached out to Rob Toth, founder and CEO of OODIENCE, because he’s developed a reputation for getting above-market valuations for his clients. Thankfully, Rob agreed to an interview, which you’ll find below.

OODIENCE takes a much different approach than the typical online business broker. First, they specialize in audience-rich businesses like blogs, content websites, newsletters, and other media. But the biggest difference involves how they promote the opportunity to potential buyers.

Most marketplaces and online business brokers promote listings primarily to their own existing audience of buyers. OODIENCE does have its own buyer list as well, but most of its deals originate through demand generation and proactive outreach. They identify strategic buyers who have substantial upside through the acquisition, and they pitch the deal.

In the interview, Rob covers plenty of details about their approach and why it works. If you’re interested in maximizing your exit, and I know you are, this is a must-read interview.

What is your background and how did you get into M&A?

I’ve been in digital or online marketing for nearly 20 years specializing in direct response campaigns, targeted advertising, and lead generation. Basically marketing skills focused on data and identifying the best buyer profiles for campaigns. 

My intro to M&A was a demand-generation marketing support for a personal friend’s exit. His advisors (broker team) weren’t producing qualified leads. He pulled me in under a marketing contract where my focus was on finding a “best buyer”. We had a qualified buyer, above his asking price, in 3 weeks – something his brokers weren’t able to do in 4 months. 

What types of clients do you represent?

I built OODIENCE around what the name also plays on: audience. This meant all forms of media: blogs, content sites, publishers, etc. Though we’ve also done print magazines, print newspapers, podcasts and similar.

The interest was in mastering the “content” driven business model that typically had a strong, loyal audience which may be subscribers, followers, readers, and the likes. On that note, we now also work on newsletter businesses and, as part of an upcoming expansion and much-needed rebrand, we’ll expand to e-learning /e-course businesses. 

The listings my team and I work on are in the $300,000 USD – $30 million range, with most deals being in the low millions. 

As for geo, we’re geo-agnostic. The business must be in English (given language barriers in negotiations) but we’ve worked with Malta, the UK, Australia, South Africa, and, of course, primarily Canada and the USA. Most deals have either the buyer or the seller in North America. 

What criteria does OODIENCE use to evaluate whether a business is ready for sale?

Well, being “ready for sale” mostly comes down to whether the client (owner)’s goals and needs and our goals and needs align. This means, on our end, it shouldn’t be a distressed or ignored property but it can be if sold for a low multiple as an asset.

Ideally it should be in the price range I mentioned. And we should be able to understand what a post-sale scenario can look like for a buyer, including what team members stay on, what the owner’s transition out would look like, and similar.

For us, as long as it’s an operating vs ignored business, with a price range within our $300,000 – $30 million sweet spot and our own confident valuation aligns with the owner/seller’s goals – we’re probably interested.

That said, there are markets we prefer not to take on such as religion, casino, and a few others. And we also tend to avoid horizontal media, meaning content sites that cover a broad range of topics (cooking and fashion and travel and entertainment news all in one). 

Personal brand blogs are also often avoided. “Jennifer Jetting Around” would likely be one we pass on for the same reason buyers would pass on it. Though often those sites are small hobby blogs that wouldn’t match our target sale price criteria either way.

We do, however, work with any clients and even would-be clients on some advisory and counsel to help them patch up their business or rev up their numbers pre-sale. Obviously, it benefits our mutual goals to have a more organized, improved, uptrending, overall more appealing business to sell.

Given our specialization in this market, I think we’re likely the best qualified to provide such advisory as we sit on a lot of institutional knowledge just as a byproduct of having not only represented and sold so many content and publishing businesses, but the many others we’ve had behind-the-curtains access to. 

Most of our readers are familiar with online business brokers and marketplaces. Tell us how OODIENCE takes a different approach by focusing on demand generation.

That’s just it, we come at this as a specialized sales team.  The comparison I’ve used is it’s the difference between selling your piece of art on Amazon (general marketplace, general buyers, often price shopping among tens of thousands of options) vs. a boutique retail store (this is the broker, they deal with a smaller buyer pool but very mixed) vs. an art dealer who has relationships with or can establish connections with art collectors. If you want to get a maximized sale, which avenue would you choose?

OODIENCE was built from day 1 as a specialist in “audience” (hence the name) focused content, publishing, media businesses that we then pursue strategic buyers for. For example, we’ve sold to public companies who bought the media property as an extension of their own businesses, or recently an RV water filter company bought an RV-focused content site. We sold a network of music content sites to Sony and we sold a B2B industry-centric animation site to an animation studio, and similar. 

Data-identifying the right target buyers is challenging. I built OODIENCE with this focus in mind and therefore we learned the advanced steps required, hired full-time team for this process. 

This allows us to step into any market and within weeks of starting a new client campaign, know who we should be speaking and pitching to. This is fundamentally different than a “broker” who gathers some resume-esque bullet points from the client, builds a simple prospectus or “CIM” and then sends this out to a mixed bag of “buyers.” 

But this is also why the valuations differ so heavily. Using that art example again from earlier – who is a better buyer generally speaking: the individual browsing an overwhelming number of options online? The general buyer looking for “any good deal?” Or someone (or some entity and brand) already very invested in and heavily focused in a specific market? 

All things considered, we beat valuations every time as our work is akin to what a larger investment bank does for their $100 million – $1 billion sized clients. We just make a similar version of outreach available for the under $30 million market. 

Tell us about your approach to determining a valuation.

Valuation is part art, part science, part gut. It has a lot of variables to it and this is probably one of the areas which genuine experience is necessary in. Finding comparables (how much “similar” sites have sold for) is easy enough – but that again takes us into what is typical. Not what is maximized.

The valuation will consider revenues, earnings, financial trends. Also history – is the business established with consistent historical data? Traffic, users, pageviews, monetization models, and untapped opportunities. Owned audience, such as email lists. Community, maybe a private forum, and other such data and audience assets. Team. Ease of replacining or retaining the owner post-sale. Topic/market – clearly a wedding cakes focused content site will have a different price that an established solar installations site. Any other IP or assets involved in the deal. Brand reputation. Sources of traffic.  

Also how bullish and excited are most buyers and investors in the business model? We all know that SaaS or AI will get more traction than “blogs.” So the pulse of the market matters even if selling to a strategic buyer (for above-market valuations).

Can you share any success stories or case studies that highlight the effectiveness of your approach?

Sure. Well, this is the bulk of the work we do. While we’ve had a few sales where a “general buyer” did put in a better overall offer, that’s a rare case. Instead, most of our deals have been sold to strategic buyers that my team and I identified based on data, signals, and tactical research.

One example is an animation site. This was a B2B, industry-focused content site specific to the animation industry. While general buyers (as we do have thousands of buyers as well and run complex marketing for every campaign) came back with soft interest, they ultimately told us the listing was overpriced. Something I hear frequently. 

But they weren’t our target. We were instead busy having sales conversations with animation studios, animation software, animation industry events and select others. Of course, even in those pockets, we picked certain targets that we felt had a particularly strong business development reason to make the acquisition and pay the price we were seeking (which was well above market rates, nearly double, in fact). 

Ultimately, we did just that and sold to an animation studio that wanted that rapid market exposure and therefore, were prepared to pay a strong price. Or the “maximized price” as we call it.

Or a 39-year print and digital media focused on high-school teens. The numbers, meaning our valuation, made no sense to a general buyer. There was a lot of enthusiasm and “interest” of course, but there too we got the expected string of “it’s overpriced” comments from the general buyer base and general marketing that always supplements our efforts. Again though, it didn’t matter as we were digging into the edtech market, particularly focused on Education Technology companies that were active in the “high school” space. 

And here too, our buyer was a strategic brand ready to pay our asking price.

It’s also important to note that selling to a strategic buyer carries its own pros and cons. The pros include the ability to pursue higher multiple as they have a higher leverage, market advantage reason to make the purchase but also, these are often all cash deals. Maybe with part of the payments being deferred but the language of “seller financing” or needing SBA, loans and similar rarely comes up in our little deals universe. 

One of the “cons” however, is they are not coming in as owner-operator. Which means any founder or founders who will need to be replaced, their fair market costs to hire someone, has to be factored into financials. This is a non-issue for more established businesses as owners already pay themselves a salary – but in some, under $1 million sized businesses, the owner just spends the profits at their discretion and views it all as profits. But in reality, there’s a cost for their work that needs to be displaced and adjusted for.

Of course, the math still works heavily in the seller’s favor. Meaning, suppose replacing them with a new hire post-sale will mean $50,000 comes off of the profit line – but the strategic buyer has an offer that is $500,000 above the “market value”. Clearly, there’s a win there. 

What types of assets should bloggers and website owners focus on building to maximize the value of their business?

Easily owned audience and community. Each of these usually means an email list but maybe also a private forum or group. 

Particularly if the business is all Google/organic traffic (meaning SEO) driven. That’s a risky proposition right now. Eight years ago, that was attractive, but now it’s a high risk. Diversified traffic that isn’t just “search” driven is recommended. But of that, owning and building out an email list or community is one of the highest leverage opportunities. 

Another tip is to ensure they contractually own their IP. We ran into scenarios where some guest posts or even former writers and contractors didn’t grant clear permissions for the seller to use their content.  This may seem trivial for a smaller operation, but if selling to a strategic buyer that may be a $50 million or much larger brand, who can lose a lot on a copyright lawsuit against them, it becomes high risk and unfavorable if any of the content and IP isn’t owed. Or, they would just not acquire that part of the business. So make sure you do have full, documented rights to your content.

These days, supplementing ad revenue is a must. Though this is also marginally what our business exists for as we tend to pair a mostly ad revenue-based business with a transaction (such as an app for that market, or software for that market, or e-course membership or service or e-commerce and product offering for that market). 

I strongly encourage any would-be seller to play a little fictional game and imagine that they are buying their current business. And then think through what their day 1, week 1, month 1, first 90 days would look like post-sale. 

Does the content/IP transfer or will there be issues? Will the team continue working with the new buyer or will they leave? Will any payment accounts or software accounts need to be set up new? If so, which ones? Will any historical data be lost? Are there SOPs in place or can they be built during transition? What skillsets will the new Buyer need to have or, more likely, need to hire to replace you? 

And, very understandably, is the business heavily based on your personal brand? If so, shift away from that rapidly as it poses a risk for a buyer to think “well, what happens to readership and revenue if Helen Hero is no longer the face of the site?”

What trends have you observed in 2024?

Content sites are indeed less favorable but that’s probably 95% based on fears around search. And rightfully so. There’s a heavy unknown of what will happen, particularly given the devastating Helpful Content Update from Aug 2023 and the continued fears of Google’s AI Observations and Generative Search. 

In our sales, the clients that have mixed revenues, owned data and audience assets, scalable business models, those continue to fare very well with strong multiples (and certainly well above market rates).

However, if the business is downtrending, poor or minimal team, easy to replicate content, programming ads as its sole monetization, no email list, entirely Google search driven, etc. – well that’s not going to be favorable. And that’s understandable. 

I tend to attend industry events and remember hearing industry “experts” on stage proclaim versions of “have no fears, media is thriving.” They then went on to qualify that clickbait-esque common by stating that “as long as that media builds diversified traffic streams, diversified revenue streams, owns more and more of its audience, builds a community”. 

I always smirk because most publishers, particularly the under $1, $2, $3 million deal size ones, have operated on ”we create content, Google sends us traffic, Mediavine or Raptive pays us.” And I’ve been saying that this lazy and minimal model won’t fetch a maximized sale and, the brutal truth, it doesn’t even deserve one. 

But those who are building a robust business continue to perform well. They are the minority though.

How can business owners plan strategically for a future sale, even if they are not currently looking to sell?

I think this comes back to much of what I already covered. It really just needs to be one valuable exercise: to think as the buyer. And let go of “this is my baby” and any inflated valuation expectations that are not grounded in any logic, reasons, or basic economics of a deal.

I can’t tell you how many times a seller in our first conversation told me some number X that they would like to sell for. And I asked why that number and they rattled off life goals (things to buy, things to pay).

Well, without being disrespectful, can we all agree that this is ill-founded at best or basic lunacy at worst? 

“I’d like to sell you this 2002 Toyota 4Runner for $250,000 – because my kid is going off to an expensive college and I need to be able to pay for it.”

“I’m selling my old iPhone 6, good condition, for $12,000 because I want to travel through Asia and need that much for the trip.”

I think we all get the idea.

A business shouldn’t sell for some general-market price like cheap art on Amazon. But even if selling to a best-profiled buyer, a motivated and data-identified strategic buyer for a maximized price, there is still basic economics and real world (well, reality) that comes into the conversation.

For this reason though, I strongly advise hiring an advisor even for a few hours consulting (simple service fee) in advance. Maybe get a valuation. Get an “audit” or run-down of your business. Have them point our pros and cons. Have them build a 6, 9, 12 month roadmap of what to work on.

Or depending on the service provider, maybe they remain involved for continued strategy. That’s something we’ve offered in a number of cases. It’s not vary profitable for us to be in the service-fee based consulting business as it’s a low win compared to selling businesses with $50,000 – $600,000+ commissions to them. But sometimes it makes sense for us to take part in that as it may secure a great relationship and then a future client. 

But do this well in advance if you’re thinking of an eventual exit. 

Anything else you’d like to share?

I’m going to be biased on this, I recognize this but I advise sellers or would-be sellers to really understand the tool you need for the job. 

If you have an ignored blog, low numbers, some content. Maybe it’s worth $20,000. You don’t need any type of broker as there isn’t a commission on there that makes sense and the price is so low, that a general “consumer” from any marketplace could buy that. Maybe hire a service fee based advisor to guide you on how and where to get it listed, but you don’t need representation.

Conversely though, if you have a beautiful business that has a lot of assets, advantages and strengths, putting it onto a marketplace is just leaving money on the table. Unless your strategy is on par with a scratch-and-win ticket (luck and hoping for a maybe), the statistical probability of selling for the well-deserved maximum price is terribly low as that’s just not the avenue for it, any more than trying to sell a unique piece of art on Amazon would be. 

You may or may not need a marketplace, a general broker, or a specialized sales representation – but understand what you have and pick the best tool for that job. 

To get in touch with Rob and his team, please visit OODIENCE.com.

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