Complex Media, the style and entertainment network for men which owns Complex magazine, is more than a decade old.
During that time, it has grown into a profitable web business with nearly 90 million monthly readers and 931 million monthly pageviews across its network of 100+ publishers.
When traditional investors hear numbers like that, it’s not difficult to start funding conversations with them. But Complex Media just raised $US25 million, and the money didn’t come from a venture capital firm, a hedge fund or a bank.
Complex Media CEO Rich Antoniello says he only had top-level conversations with venture capitalists. Instead, Iconix Brand Group, the owner of Rocawear, Ecko Unlimited, Umbro and other brands, stepped up to the plate and offered to pay the entire amount Antoniello was seeking in full.
“There was no trepidation,” Antoniello said of the deal. “[Iconix] was very smart, aggressive, and did its due diligence.”
Iconix CEO Neil Cole, brother of designer Kenneth Cole, spearheaded the investment. He says his team had been looking to invest in a media property for years. It passed on brands like Playboy and Maxim, but the deal with Complex moved quickly.
“It took just a couple of days…It took the lawyers a little longer than Rich and I to get there though,” Cole said.
Cole had worked with Complex on marketing campaigns prior to the investment. Additionally, Mark Ecko is on Complex Media’s board of directors. Cole is now a Complex Media board member too.
It used to be unusual for advertisers to invest in media companies. Recently, that has changed. Sponsored content — even sponsored websites — are the new normal. Brands like American Express and AOL have venture capital arms to invest in startups. Magazine publishers like Conde Nast and Hearst invest too. Now, Iconix is in the mix. But that doesn’t mean Cole’s brands will get preferential treatment.
When asked if writing a check will get Iconix endless, free advertising on Complex Media, Cole replied: “Absolutely not! I was told there is a Chinese Wall, where we will be treated like any other advertiser.”
He says the investment will yield strategic benefits for both Complex Media and Iconix, but not monetary. “We think there are so many assets we can leverage, but unfortunately we don’t own 100% of Complex,” Cole said.
For Antoniello, choosing Iconix as an investor “killed three birds with one stone.” Antoniello said the funding will fuel growth, and Complex Media’s e-commerce efforts will benefit from Iconix’ expertise. Cole also understands how to build brands through conversational marketing. And conversational marketing is where Complex Media has excelled.
This year, Mountain Dew ran a multi-million-dollar campaign with Complex Media. The deal let Antoniello’s team operate and create all content for Mountain Dew’s site, Green-Label.com. Another soft drink company is spending multiple millions with Complex to have its website run as well.
In 2013, branded content will make up 22% of Complex Media’s overall revenue, up from 10% last year. Antoniello said Complex Media is successful in the space because other publishers shouldn’t be playing in the sandbox.
“The people we work with are long term focused; they are truly always on from a conversational perspective,” said Antoniello.
“One of the reasons we are allowed in is because [our young, male demographic] consumes at a higher rate than anyone else out there.
We’re creating content around subcultures, not content that’s generic and ubiquitous,” he said.
When asked what Complex Media does differently, Antoniello replied: “I can’t give a play book to other people. A lot of people shouldn’t be creating content. If your site is just sports stats, or news, that’s not very special for an advertiser.”