Why Gary Vaynerchuk’s Latest Buy Is a Big Deal
If a publisher can act like an ad agency, can an ad agency act like a publisher?
Gary Vaynerchuk says yes. The social-media expert and founder of digital agency VaynerMedia announced Wednesday that he has purchased women’s lifestyle publisher PureWow for an undisclosed amount.
PureWow is the first media property of The Gallery, a newly formed sister company of VaynerMedia that will house a portfolio of media brands. PureWow founder and CEO Ryan Harwood will become The Gallery’s CEO.
The move bucks a growing trend of publishers such as The New York Times, Wall Street Journal, and Time Inc (the parent company of Fortune) investing in the fast-growing world of branded and sponsored content to make up for shrinking print ad revenues. In this case, the head of an ad agency is acquiring a publisher in the hopes of reaching its audiences at scale. Harwood believes the reason agencies haven’t been scooping up publishers in the past is entirely monetary.
“Typically, the creative agency hasn’t had the assets or resources in order to buy a media company,” Harwood says. “Fortunately, Vayner has been able to accomplish this.”
VaynerMedia will “supercharge PureWow’s capabilities, immediately enabling it to rapidly grow its already sizable audience and expand its offering to advertisers,” the company said in a release.
The company will do this not only through its relationships with social media platforms, but with its video production resources. VaynerMedia has approximately 50 employees who work on video full-time, which could help PureWow and other Gallery publishers to turn video content into a robust revenue stream.
“We’re very bullish on video content for our clients,” Harwood told Fortune on Wednesday. “We monetize it well, so being able to exponentially increase the output of that type of content is incredible.”
The PureWow investment makes sense for VaynerMedia particularly because the 67-person company gets the majority of its revenue from branded content. Harwood confirmed its annual revenue was “very close” to $20 million. The site has created content for brands such as CoverGirl, Olay and Cartier.
The PureWow acquisition was led by Vaynerchuk and RSE Ventures.