At CoRise, we have been focusing on the digital media landscape , with a particularly eye towards Transactional Media. We define Transactional Media as: media with a direct link between vendor and consumer, enabling a transaction; the ecosystem of technologies and services that facilitate this. We have the strong belief that traditional online media, long epitomized by banner ads and CPM pricing has been transitioning into a new ecosystem: one that is gauged by transactions and facilitated by technological advancements. While the proliferation of mobile devices and payment technologies are only accelerating this trend, the transformation has been inevitable, as merchants seek a more tangible ROI on their advertising spend. Even “brand” based ad spending ultimately seeks a transaction: i.e. buying the soap, going to the film, or visiting a theme park.
To follow the progress of Transactional Media, we have put together an index to track the group’s relative performance vs. not only the general market, but also Internet media as a whole. Since, there aren’t many pure transactional media companies that trade publicly, we have compiled an index of companies that at least have transactions as a significant part of the overall company; further, to mitigate the impact of a few large companies on our index, we have also equal weighted the various companies. The 20+ companies in our index include ones across various segments: Product (i.e. Amazon, etc), Service (ie. Priceline, etc), Promotions (i.e. Groupon when public), and Payment Solutions (i.e. Visa, etc) – the companies can be seen in our weekly comp sheet. While it’s clear that none of these companies are solely in transactional media, these companies (and the others in the index), have a significant transactional component to their business. Hence, we think this is at least representative of the sector we are trying to follow with the limited public data we have.
Amazingly, the CoRise Transactional Media Index (CTMI) has outperformed the broader markets and the Internet (see our website for the continually updated graph). As of Friday’s close, $10k invested in this basket three years ago would be worth ~$40k today – in contrast, the Internet Media Index would be worth only ~$20k and the Nasdaq Index investment would only be worth ~$15k. Further, this outperformance is not unique to the 3 yr period chosen. If you look at the graph, you will see that the CTMI has readily outperformed the other indices for the last 2 ½ years.
We think this is truly worth noting, and indicative to a degree, of the larger trends across media and commerce broadly. We plan to continually monitor this trend, but we think that the early indications is that the Transactional Media space is poised to prosper as the Internet continues to develop. Hence, we intend to stay focused here and help our clients capitalize on the opportunities the trends will present.