As The Verge is working on a relaunch of its site, Nilay Patel published a great piece that lifts the curtain on the business model of a modern internet media company. Whether you are in the media business or in online marketing, you can certainly learn a few things from it. Here, I summarize my major takeaways.
Fragmentation and Complexity
Basically, what most people think of as our business model — putting ads on web pages — has split into multiple complex revenue lines at Vox Media like branded content, platform publishing, experiential events, Facebook Live integrations, newsletters, podcasts, and more over the past five years.
So we make better and more effective ads. Great. But we have to put them in all the places people are reading The Verge — and the number of platforms we find our audiences on is getting bigger, more fragmented, and more chaotic than ever.
“Just like the programming experience, the advertising opportunity is bespoke for each platform,” says Lindsay. “We need to make it easy for our audience to find and consume content wherever they prefer, and we need to make it easy for our advertisers to reach these people in ways that are seamless and organic to the consumer experience.”
“I think we will continue to see incredible fragmentation, which means reaching more people with less control. It also means added complexity, nuanced best practices, and diversified audiences.”
From a publisher’s point of view the online media landscape is increasingly fragmented. The existence of several platforms which aggregate and distribute content – and increasingly try to lock the content itself into their ecosystem, as Facebook does with Instant Articles and Google with AMP – make life difficult on media companies. In order to reach their audience, they might not have to be everywhere but certainly close.
That’s a challenge. Not only do you have to acknowledge this new world in the first place, you also have to
a) figure out the details of what constitutes good and relevant content on every platform specifically
b) find out how to monetize your content on those platforms
c) let go of the notion that you own the relationship with the user
Media is Technology
But what most people don’t see is that the revenue side of Vox Media has also gotten vastly more sophisticated in the past five years, with just as much reliance on technology, data, and distribution intelligence as anything we do on the editorial side. We build just as much tech to distribute and optimize our advertising content as we do to create and distribute beautiful stories for our editorial brands, and it’s all just as deeply interconnected with the shift to platforms
If you’re a deep Verge nerd, you might know that we create and publish our stories on a platform called Chorus, which is Vox Media’s proprietary media stack. Chorus lets us do all kinds of interesting and dynamic things, and we’re actually moving to a powerful new version of Chorus as we launch our new design. But Vox Media has another equally powerful platform on the revenue side: Hymnal.
So earlier this year Joe and his team built another powerful tech product to solve that problem, called Concert. Concert distributes ads, branded content, and video across Vox Media, NBC Universal, and a number of other publishers.
Not only has Vox Media its own CMS Chorus, it is also heavily investing in ad tech. Hymnal allows to create and automatically test & optimize ads. Concert handles the distribution (read the original piece for more on both). Both are state-of-the-art systems that create differentiation towards advertisers. Sure enough, Concert works with Instant Articles and AMP. This last point is important. As your own site becomes less important, figuring out how to monetize content on different platforms becomes essential. Having proprietary technology on that end could turn out to be a major asset.
In sum, I believe it’s fair to state that Vox is as much a technology company as it is a media company. While that is certainly not news to any post-internet media company (or smart incumbents), alas, it’s still not reflected in the actions of many of the smaller, traditional publishers. While it might well be too late for them anyway, its a shame many of them didn’t even try.
Online Media is an organizational challenge
“The industry changes in monthly increments,” she adds. “Everyone is making it up as we go, including the places where people consume content. In five more years there will be more fragmentation, more platforms, more ways to think about creating content, consuming it, and of course monetizing it. Vox Media, as a company, is organized for that future.”
In order to succeed in this landscape, you need to stay very agile and willing to make changes on-the-fly. This is a major organizational challenge – even more so for incumbents who were used to a totally different world. The new reality certainly has no place for bureaucracy and slow, hierarchical processes. (Not to speak of the huge overhead you find at most incumbents; but that’s another issue for another time)
An important, additional remark
First and foremost, of course, comes great and differentiated content. I excluded it from the threads I wanted to cover here but it’s important to note. While this should be obvious, it’s not in practice. The Verge cares about its content, I can attest to this as a regular reader and podcast listener.
All quotes within the quotes are from Lindsay Nelson, Vox Media’s global head of brand strategy and marketing.