It’s Not A Google Algorithm Problem—It’s a You and Me Problem
Rob Toth, Founder of Songbird.Group M&A, Outlines Insights From 10 Years of Selling Publishing Businesses
For more than a decade, our team has advised, sold, and evaluated digital publishing and media businesses. Before that, I spent 10+ years in targeted advertising and lead generation. That’s a twenty-year timeline of seeing the Internet’s many shifts.
WordPress, which revolutionised blogging and turned the casual web blogs into a real business model, launched in 2003.
Google’s AdSense, arguably the first mainstream programmatic ad network launched the same year.
Roughly 2005 is when the practice of SEO started becoming mainstream.
SEO, WordPress, programmatic ad networks are effectively 20 years old. That’s just long enough for us flawed-logic humans to regard a norm in our lives as having been how things always were – and falsely believe that’s how they always will be.
In approximately that same window of time, we swapped landlines for smartphones (2007), TV viewing time for YouTube (2005) and print magazines for niche digital media. We all stopped driving to DVD rental stores once Netflix streaming launched in 2007.
This isn’t a history lesson. It’s an alarm.
If all you observed in the previous timeline is the new tech, you’re missing the key point. Each new solution we moved to swapped out businesses that were once established norms, and often 20+ year old industries themselves, yet now are obsolete or inconsequential.
If your publishing business still runs on the model of “organic Google traffic + programmatic ads = revenue”, then you own a DVD rental store.
This is not a Google algorithm or an AI Observations issue. It’s a user convenience-seeking problem.
Answer Engines and Voice Prompting
Recently, I was traveling and met one evening for dinner with industry friends. And I observed that three of the four of us, that is 75%, were using some of the downtime “speaking” to our respective AI bots. We were voice prompting queries that would have previously been Google searches and webpage clicks.
I do hobby-level investing and the most core mandate in my investment criteria is the Convenience Multiplier. How much does the new product or service multiply the overall convenience for the user. Smartphones vs landlines, Spotify vs physical CDs, Uber vs manually calling taxis.
I use that as my first, second and third consideration in an investment because if the Convenience Multiplier is significant enough, it trumps just about everything else.
Consider: would you be keen to go back to manually picking up DVDs at Blockbuster vs having a Netflix streaming account?
That is what the industry is already battling. Whether you are letting yourself see it or not.
Nobody who engages with voice prompting, speaking to an answer engine, will be going through the already archaic steps of manually searching Google and clicking through 10 blue links.
And the number 1 thing AI chats replace is content; the product of your media business.
Google knows this. Which is why they continue to soft-boil publishers with updates that shrink their search traffic as Google search transitions into an Answer Engine, AI Observations being just a sample of that.
We wrote about this in an industry insights report in June 2023, three months before the tsunami of Google’s Helpful Content Update (HCU) that rolled out in September.
GA Data
Given our business model, we have the privileged advantage of seeing the data from behind the curtains. A month after HCU hit, we had view of 42 media brands’ Google Analytics accounts. I spent days digging into the stats to see the aftermath.
3 sites of the 42 were untouched.
28 saw traffic drop by 25–40%.
7 dropped 50–60%.
4 collapsed by 75–80% — functionally out of business.
Then, after the March 2024 Core Update rolled out, we dug into the then 48 GA accounts we had access to and compared those stats to pre-HCU data.
100% had a decline.
22 dropped 25–40%.
20 dropped 50–60%.
6 lost 75–80%.
Those six were effectively put out of business, and all were handed a pay cut.
In our June 2023 report, we forecasted this shift, though at the time it felt a bit “Chicken Little” to many. Those predictions are now mainstream headlines.
Media M&A: From Favourable to High-Risk
From our launch in 2015 to 2021, we regularly sold SEO-driven publishing businesses at 5x–8x earnings — even as market comps hovered at 2.5x–3.5x. Some of our premium deals saw 11x, 18x, even 21x EBITDA.
Premium media was an exciting, favourable, market advantage providing acquisition.
Today, if it’s Google traffic driven, it’s high-risk.
Case study: A personal friend owns a once-thriving tech media brand. At its peak in 2022, that site would’ve sold for $20 million USD with competing offers. Today, the same asset would struggle to close at $4 million. Why? Because they remained focused on an already old model: creating more, SEO-optimised content and continuing to play the Google game.
Passive, Build or Sell
There are three ways forward.
First, if your publication is already small, it likely won’t land you a meaningful exit. You can look at cutting back costs, simplifying and letting it run passive. It will depreciate in revenue and value but for smaller sites, it might be a best path forward.
If you have a stronger media brand, then ensure you’re diversifying away from Google traffic by way of content distribution partnerships, newsletters, video-first channels, events and private communities. Or add on relevant transaction businesses such as e-courses.
The most successful clients we’re working with now have a full mix of these: product offerings, private communities, paid ads to supplement their organic traffic, thriving email newsletters.
Alternatively: sell. Whether on a marketplace, a generalist broker or a specialist to media M&A like our team at Songbird.Group.
Some in the industry pursue a fourth option: hope that this is just a Google algorithm blip like the many they’ve experienced over the past twenty years.
Spoiler: it’s not.
About Songbird.Group (SBG): SBG, formerly operating as OODIENCE M&A, is a ten-year veteran and specialist of media and publisher business sales, serving clients on the sell-side to land a maximized exit by selling to hard-to-reach Strategic Buyers.