GEO drives new brand-media deals
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The rise of chatbots and AI search engines is forcing big brands to invest in new generative engine optimization that favors third-party validation, as opposed to traditional search engine optimization, which can still be gamed with paid media.
Why it matters: The ad market for chatbots and AI search engines is still nascent, which means brands need to rely on strong organic and earned media coverage to reach consumers using AI tools.
- "It's become clear that increasing the amount of times a brand is mentioned on third-party websites helps increase AI visibility," said Noah Greenberg, co-founder and CEO of Stacker, a startup that distributes sponsored content from big brands like DoorDash, Unilever and Redfin to thousands of publishers across the web.
State of play: OpenAI's acquisition of TBPN, reportedly for "low hundreds of millions," underscores just how much the company is willing to pay to shape the public conversation on AI in the agent era.
- The deal will see TBPN maintain its editorial independence, although there's some skepticism that the startup will receive the same level of engagement from AI firms now that it's owned by OpenAI.
Zoom out: There have been multiple examples in history of similar plays where big brands buy media companies to drive a positive brand halo and, hopefully, customers.
- Plaid, a fintech giant, acquired the popular This Week in Fintech newsletter company last month.
- Robinhood acquired the popular retail investing newsletter and podcast company MarketSnacks in 2019 and later launched a separate, more robust independent news brand called Sherwood. Sherwood acquired Chartr, a media company and newsletter publisher, in 2023.
- Penn Entertainment, a casino operator, acquired Barstool Sports to lure sports bettors.
- HubSpot, a publicly traded sales and marketing software company, acquired The Hustle, an email newsletter and content company targeted at entrepreneurs and small business owners.
Yes, but: Media investments don't always play out the way brands expect them to, in part because the acquisition sometimes inadvertently weakens the media company's core business or brand equity.
- Penn National famously sold Barstool back to its founder Dave Portnoy less than a year after buying it for $1. Barstool couldn't accept gaming ads from rival casinos after it joined Penn.
The big picture: One way big companies can reduce the risk of pricey acquisitions is to build their own newsrooms and create content that generative AI platforms are more likely to pick up.
- "Up until last summer, the majority of brands that came to Stacker were looking to distribute content to reach more off-site organic readers, and/or to drive high authority backlinks from tons of news outlets," Greenberg said.
- "Last summer, data started to show how AI platforms were favoring third-party content and earned media when deciding what to cite. This has been a huge tailwind."
- Greenberg said Stacker's annual recurring revenue has increased from roughly $1 million in January 2024 to nearly $10 million as of last month.
Media acquisitions tend to fare better when the acquiring company builds the infrastructure necessary to sustain its investments long term.
- HubSpot, the business marketing platform, is one of the best examples of a company that has done this effectively.
The latest: Last week, HubSpot acquired Futurepedia, one of the largest networks of YouTube channels focused on AI and education.
- The deal, which gives HubSpot access to 17 YouTube channels, allows HubSpot to accelerate its own AI-focused content strategy while expanding its creator program.
Catch up quick: After acquiring The Hustle in 2021, HubSpot continued to invest in a slew of niche media brands that cater to business professionals and plug them into a broader media network where it could grow their reach.
- It acquired Mindstream, an AI-focused newsletter company, in 2024. It bought Starter Story, a media company focused on entrepreneurs, earlier this year.
Between the lines: For HubSpot, investing in content is as much about lead generation as it is about growing a healthy business line.
- "We are buying this [Futurepedia] because we know it can generate revenue," HubSpot's head of marketing Jonathan Hunt told Axios.
The bottom line: "Every impression we generate is both brand awareness and potential pipeline for HubSpot's software business," Hunt said. "Today, that's profitably creating tens of thousands of customer leads organically every month, up 100% year over year for YouTube, and 90% year over year for newsletters.
