1Mby1M Deal Radar 2010: StyleCaster

StyleCaster is a media company that creates and distributes women’s lifestyle content. It provides consumers, advertisers, and partners with content and advertising solutions across a portfolio of sites that span the lifestyle spectrum – fashion, beauty, celebrities, food & drink, entertaining, and travel. Founding partner and CEO of StyleCaster Media Group, Ari Goldberg is responsible for all aspects of the company’s business operations and development. He has expertise in marketing, strategy, pop culture, consumer behavior, and business development. Prior to launching StyleCaster in 2008, Goldberg was vice president of strategy and business development for basketball player LeBron James and LRMR Marketing. During this time, he worked with brands including Nike, Coca-Cola, Wrigley’s, and Microsoft. Previous to LRMR, Goldberg was director of business development for Steve Stoute at Translation Consultation + Brand Imaging. The initial idea for StyleCaster culminated over dinner in New York City in the summer of 2006. Ari Goldberg then put together a founding team comprised of industry leaders including Albert Azout (CEO, Sociocast), David Goldberg (president, StyleCaster), Maverick Carter (CEO, LRMR), and Doug Imbruce (CEO, Qwiki). He and David Goldberg, his brother, run StyleCaster. Women’s content websites attract more than 53% of the total U.S. online audience (comScore). According to Unicast, American women control $7 billion in annual spending, and 85% of all brand purchases are made by women. In 2010, 162 million people in the United States will research products online, and 82% will be online buyers (eMarketer). StyleCaster’s targets are audiences in fashion, beauty, music, and other lifestyle categories, who are typically between the ages of 18 and 34. StyleCaster makes the argument, familiar to those in the media, that women’s lifestyle media is dominated by “old media” that has been slow to transition to the Web. A recent FishbowlNY article positioned the company as “Condé Nast meets Demand Media” – the best of old media and the best of new media. Old media, says StyleCaster, (Condé Nast, Hearst, etc.) “did a lot of things right; they just have an inefficient business model, and they still focus their energy and top talent on print, while the rest of the world moves to the Web. New media (Demand, Glam, etc.) has done a lot of things right but has lost the art of ‘premium’ content – the high-quality glossy content that consumers and advertisers came to expect from print.” But is it such a bad thing for a company such as Condé Nast, which is responding the the digital shift, to keep a focus on print? In a recent interview with FOLIO, Condé’s new president, Robert Sauerberg said that while CEO Charles Townsend has said that the company will “move away from the magazine,” the well-designed magazines for which the company is known will remain core products; Condé Nast will extend beyond them. And as FOLIO itself points out, “Print [is] fading but still enormous, digital promising [is], but still fairly small.” And Hearst vice chairman and CEO Frank told Mashable that Hearst is not interested in paywalls but is very much focused on apps for tablets. More than twenty of its magazines are available as apps, and the company recently created an “App Lab” to explore digital opportunities. Old media may prove adept at change than one may think. A lot is at stake as we find a new balance between print and digital. Women’s content websites attract more than 53% of the total U.S. online audience (comScore). American women control $7 billion in annual spending, and 85% of all brand purchases are made by women (Unicast). In 2010, 162 million people in the United States will research products online, and 82% will be online buyers (eMarketer). StyleCaster’s targets are audiences in fashion, beauty, music, and other lifestyle categories, who are typically between the ages of 18 and 34. There are numerous competitors, including PopSugar, Glam, and the sites of women’s fashion magazines. StyleCaster aims to compete against old media by providing the high-quality experiences and content, created by trusted experts, that consumers and advertisers want in digital. “But,” says Goldberg, we produce content like the Huffington Post, not like Condé Nast. This enables us to create premium content in premium environments at costs that can be sustained.” By this he means that the company aims to create a platform for writers, photographers, stylists, and makeup artists, much the way the Hufington Post has done for politics. To compete against new media, StyleCaster says that it is set up to be hyper-efficient and cost-effective, leveraging the tools that the best new media players use. It also produces original content on sites it owns and operates, as do many of its competitors. When Goldberg was working with LeBron James in 2008, he was introduced to Dan Gilbert, owner of the James’s team at the time, the Cleveland Cavaliers. Gilbert became interested in StyleCaster and provided $500,000 in seed funding. He then led the $4.25 million Series A alongside a group of high-net worth entrepreneurs. The company is break-even and forecasts revenues in the low double-digit millions for 2011. It is in talks with VCs about future funding. The ideal investors are entrepreneurs who have build big businesses that StyleCaster can learn from, have domain expertise, and are looking to build a long-term relationship. StyleCaster Media Group sees over 1.5 million unique visitors to its portfolio of properties each month. Since launching in 2009, StyleCaster has worked with over 40 advertisers including Diet Coke, Macy’s, Barney’s, Saks, SmartWater, Burberry, and others. The company works with both agencies and brands directly. Typically, there is an RFP process. Ad programs usually involve custom content creation and unique sponsorships as well as CPM-based media. StyleCaster has seen a $15+ eCPM on all of its campaigns since launch and upward of $60 eCPMs on its most integrated campaigns. When the company was founded, there was a lot of money going into the fashion/Web space. Then the recession hit, and the economy was at a low. Now, says StyleCaster, it gets calls from companies that launched at the same time asking StyleCaster if it would like to buy them. The strategy is to grow traffic and revenues, and says Goldberg, “If we keep doing what we are doing the acquisitions will be there. We are a prime target for old media companies who need to get in the game and equally for new media companies who need to show true industry credibility.”

This segment is a part in the series : 1Mby1M Deal Radar 2010