I have been posting my articles as LinkedIn posts for the past few months, but I wanted to link some of the recent articles. The biggest recent announcement was Informa’s bid to merge its Informa Tech division with TechTarget. I also covered their new IntentMail GenAI capability.
Informa Tech CEO Gary Nugent said, “This combination brings a new revenue scale, resilient revenue growth, and increased revenue stability.”
TechTarget Merges with Informa Tech
Informa PLC, a FTSE 50 UK Group company, announced a definitive agreement to combine Informa Tech’s digital business with TechTarget. The combined business will “create a leading global platform in B2B Data and Market Access, focused on helping vendors in enterprise technology and other markets accelerate revenue growth.”
The “New TechTarget” will be positioned as a “unique end-to-end solution provider across the go-to-market: from strategy, messaging and content development to in-market activation via brand, demand generation, purchase intent data and sales enablement,” declared the firms. “The combination brings scale benefits, diversified revenue streams, and strategic expansion opportunities by expanding TechTarget’s current addressable market and enhancing the resilience of its business by increasing its presence in new markets and new buyer personas.”
Informa is contributing its Informa Tech digital business and $350 million in cash in exchange for 57% of the combined company. The cash is to be paid to existing shareholders when the deal closes. TechTarget’s shareholders will retain a 43% equity stake in the combined company…
IntentMail employs GenAI to draft Priority Engine Emails framed by Prospect-level intent.
TechTarget unveiled IntentMail AI, a beta GenAI feature that drafts Priority Engine emails. TechTarget emphasizes its intent data as it is tied to opted-in readers of its 150 B2B Technology websites. Thus, IntentMail AI offers opted-in prospect-level intent that supports precision messaging around top-of-mind topics when buyers are in-market.
“Unlike other offerings recently reaching the market, only IntentMail AI combines recent, relevant account information together with deep insights on what the specific targeted recipient has been actually researching on TechTarget’s global publishing network,” explained TechTarget. “As such, IntentMail AI will not only help drastically reduce the time it takes for sales teams to more effectively personalize outbound outreach, it stands to dramatically increase conversion.”
IntentMail AI is part of TechTarget’s “personalized assist AI-driven product strategy.” CEO Mike Cotoia believes that opted-in prospect-level intent will differentiate its GenAI offerings from competitors across three dimensions: relevancy, efficiency, and precision focus…
Technology Sales and Marketing Services vendor TechTarget ($TTGT) believes it is in a much stronger marketplace and revenue position than in 2008, the last recession not caused by a pandemic. It has shifted away from economically sensitive brand revenues to a “robust product suite, which allows us to address the evolving needs of our customers.” As a result, brand revenues have declined from 30% of total revenue to 10% since 2009.
TechTarget is fundamentally much stronger than in 2008. It has trebled its revenue over the past fourteen years and doubled its Adjusted EBITDA margin. In 2009, the firm had virtually no long-term contracts; now, 42% of revenue is associated with longer-term contracts. Other positive signs: TechTarget has grown its customer base from 1,000 to 3,200 customers and is much less reliant on legacy global customers, reducing its revenue share from 32% to 20%. Furthermore, its largest customers have shifted from hardware to cloud and software vendors with subscription customers. Whereas its top customers in 2009 suffered revenue downturns, its current customer base is more likely to struggle to grow revenue than to suffer declining revenue.
“The modernization of the sales and marketing organization is a strong and durable trend. It is hard to compete in today’s IT market without a data-driven go-to-market strategy,” argued CEO Michael Cotoia on TechTarget’s Q3 earnings call earlier this month. “As the leading provider of first-party purchase intent data in the enterprise IT market, we will continue to benefit from this trend.”
Priority Engine
Priority Engine, its subscription sales intelligence platform, grew revenues by 15% last quarter. TechTarget will continue to invest in Priority Engine after doubling the number of engineers working on the product in 2022.
In 2023, Priority Engine will further bolster its Salesforce integration with “bi-directional data flow, campaign orchestration from within Priority Engine, additional program impact reporting, market insights to inform marketing and sales outreach, and alert-driven account and prospect intelligence for our sales users.”
Priority Engine also plans to ingest Salesforce data for analytics dashboards around ROI, open pipeline, and won/lost opportunities. The dashboards will answer the question, “how do we set up our sales reps within our customers’ environment to make the most appropriate and relevant follow-up?”
“We also want to make sure that we are working with our customers to provide more insights across their total campaign with TechTarget, both on the sales side and on the marketing side. So, what you’re doing with their lead generation and demand gen, their content, their branding, the visitors on their website to really bring that end-to-end view into Priority Engine to help fuel and help modernize…both sales and marketing.”
TechTarget CEO Michael Cotoia
The firm sees significant opportunity for growth in TechTarget’s sales-specific module, which is still in the early adoption phase as it was rolled out less than a year ago.
TechTarget does not break out the number of customers licensing Priority Engine or the Priority Engine sales module. However, CFO Daniel Noreck said that the module is “growing nicely but still a small base.”
More broadly, the firm has 3,200 customers, but there are over 18,000 global technology companies with at least $50 million in annual revenue, providing plenty of market opportunity.
“We believe most of those companies are good candidates for the Priority Engine sales module,” stated Cotoia. “While we expect that our rollout to those customers will be slowed by macroeconomic weakness in the short term, we think the long-term opportunity is enormous.”
Content to Close
TechTarget’s fastest-growing service is Content Enablement which powers its Content to Close strategy. In conjunction with its customers, TechTarget produced content “to fuel their marketing and sales outreach.” The service is aligned with the growing focus on self-service research among younger purchasing and business professionals.
“Most technology companies’ current go-to-market strategy is very sales rep heavy. We believe this approach is going to need to transform in the coming years to adjust to the changing buyer dynamics. The companies that win business will have a comprehensive content strategy to effectively influence buyers before their sales reps get involved.”
TechTarget CEO Michael Cotoia
The acquisitions of Enterprise Strategy Group (“ESG”) and BrightTALK have “uniquely positioned” TechTarget to support growing self-service requirements. Content Enablement via these subsidiaries will continue to be an “aggressive” investment area.
TechTarget also believes it has a market advantage due to its opted-in, privacy-compliant intent data sets gathered from its B2B media websites and BrightTALK. Cotoia argues that customer sensitivity to privacy issues and growing government regulations will offer an ongoing competitive advantage for its intent data from permission-based audiences owned and operated by TechTarget. This advantage “will become even more apparent when Google eliminates third-party cookies.”
TechTarget will continue to look for acquisitions like BrightTALK and ESG that expand the firm’s product capabilities. It is also interested in acquiring vertical media companies like Xtelligent Healthcare that expand the firm’s TAM into verticals that share similar attributes as Enterprise IT: significant purchase price, complex buying process, long lead times, and large buyer teams.
Priority Engine for Healthcare Highlights for Top Accounts.
Priority Engine for Healthcare supports over 400,000 opted-in healthcare contacts, including Providers, Health Systems, Payers, Pharmaceuticals, Life Sciences, Accountable Care Organizations, and Federal/State Healthcare Agencies. TechTarget claims that 90% of the US healthcare system is covered. Xtelligent said its audience contains “70% Business & Finance Executives and Clinicians who have critical involvement across healthcare technology purchases that are becoming increasingly complex.”
To demonstrate confidence in the company, TechTarget began a new stock buyback program to repurchase up to $200 million in common stock and convertible debt over the next two years.
“Being able to provide our customers with 1st-party intent data on the largest healthcare technology and information audience on the web is a true game changer in our industry,” said Sean Brooks, Co-Founder of Xtelligent Healthcare Media. “Sales and marketing teams will now have direct access to entire healthcare buying teams, including Clinicians, Line of Business, and IT Decision-Makers, to find more opportunities and accelerate technology deals.”
Priority Engine for Healthcare Highlights for Top Accounts.
Priority Engine for Healthcare supports over 400,000 opted-in healthcare contacts, including Providers, Health Systems, Payers, Pharmaceuticals, Life Sciences, Accountable Care Organizations, and Federal/State Healthcare Agencies. TechTarget claims that 90% of the US healthcare system is covered. Xtelligent said its audience contains “70% Business & Finance Executives and Clinicians who have critical involvement across healthcare technology purchases that are becoming increasingly complex.”
The service is available for ten segments:
Analytics
Electronic Health Records (EHR/EMR)
Healthcare Security & Compliance
Health IT Infrastructure
Life Sciences
Patient Engagement
Payer
Pharma
Revenue Cycle Management
Telehealth
Intent data is gathered from 14 B2B healthcare media properties. HealthTech sites include EHR Intelligence, Health IT Security, and Health IT Analytics. Clinical research and medical sites include LifeSciences Intelligence, PharmaNews Intelligence, and HealthPayer Intelligence. Over 400 healthcare topics are covered, with roughly half focused on Healthcare Tech.
Priority Engine for Healthcare also offers visitor intelligence and content view tracking. Healthcare intent data from BrightTALK, TechTarget’s digital webinar and event platform, is also included.
Xtelligent, also based in Boston, has a similar content model to TechTarget. When acquired last year, it had over 1.5 million healthcare-related visitors per quarter across ten websites, but lacked a platform for enabling its contacts and intent datasets.
Xtelligent content focuses on healthcare-related software and technology decisions, aligning with TechTarget’s enterprise software focus but in an adjacent market. Xtelligent topics include telehealth, healthcare analytics, revenue cycle management, healthcare IT security, and electronic health records.
The new intent topics identify HealthTech content consumption at the account and prospect levels, gathered from TechTarget’s 150 enterprise and health technology websites.
“By expanding the amount of permission-based, relevant 1st-party purchase intent data our customers have access to and delivering a full suite of marketing, sales, and go-to-market services to engage real buyers, we help companies of all sizes achieve better results at scale in this market,” said Michael Cotoia, CEO, TechTarget. “As a leader in coverage of B2B enterprise tech for more than 20 years – combined with working very closely with our almost 3,000 customers – TechTarget has unique visibility into the buying dynamics across every major sector of the market. Our experience positions us well to bring our model to adjacent vertical markets with similar attributes to enterprise B2B tech – long/complex-sales cycles, large purchases, multiple members of the buying team, and a strong need for 1st party data to enable marketers and sellers – just as we have done in healthcare.”
On its earnings call last week, TechTarget announced its latest acquisition, Xtelligent Healthcare Media, a Boston-based firm with a similar content model to TechTarget. It has over 1.5 million healthcare-related visitors per quarter across ten websites. Content focuses on healthcare-related software and technology decisions, aligning with TechTarget’s enterprise software focus but in an adjacent market. Xtelligent topics include telehealth, healthcare analytics, revenue cycle management, healthcare IT security, and electronic health records.
“The healthcare IT market is one of the most important vertical technology markets and a natural adjacency for TechTarget to expand into. This acquisition checks all of the boxes for us. Xtelligent has an original content model with a permission-based audience of registered members and a large amount of first-party purchase intent data.”
CEO Michael Cotoia in TechTarget’s Q2 2021 Letter to Shareholders
Similar to BrightTALK, Xtelligent did not have a solution for disseminating its intent data, but TechTarget will create new purchase intent segments and feed them into Priority Engine, expanding Priority Engine’s potential user base.
Xtelligent CEO, Sean Brooks, is a former TechTarget VP who founded Xtelligent a decade ago. Brooks will continue to run the business. Cotoia noted that Brooks built Xtelligent with a similar opted-in, permission-based audience model.
“We are very excited to join TechTarget and extend our combined audiences and offerings into new markets,” said Brooks. “TechTarget’s experience and success with first-party data, combined with their deep understanding of the B2B Media & Data space, will help us continue to grow and offer customers new opportunities to reach and engage highly targeted healthcare technology decision-makers.”
“[Healthcare] is a vertical that we’ve been keeping our eye on for a couple of years and the adjacent vertical where healthcare intersects with IT and infrastructure, security, hardware, and software, just made all the sense in the world to us. We believe it’s going to open the door to new customers [and] opportunities….We believe that we have an untapped revenue opportunity with Priority Engine and bringing our purchase intent data onto the Xtelligent community.”
TechTarget is eyeing other adjacent verticals, including FinTech and Asset Management, where BrightTALK has some penetration.
TechTarget paid $25 million in cash for Xtelligent, which includes an additional $5 million earn-out.
