Tag Archives: niche publishing

A small publisher makes a big bet on native advertising

Many print publishers approach digital innovation in increments, preferring smaller, transitional experiments over big-bang transformations. The Daily Tea doesn’t fit that mold.

The Daily Tea is the newly rechristened publication formerly known as Tea Magazine. The rebranding is just one part of a far-reaching business model overhaul that also involved eliminating the bimonthly print magazine and embracing a combination of native advertising and paid content as a foundation for growth.

Graham Kilshaw, The Daily Tea’s chief media officer, believes the new model better positions the brand to capture a broader, younger audience – a new generation of tea enthusiasts, if you will.

“The print audience was extremely loyal – and very vocal about wanting to keep print,” said Kilshaw, who was part of a group that purchased Tea Magazine in 2012. Over the past two years, however, the subscriber base remained flat at around 1,000, while the digital audience – website visitors, email subscribers and social media followers – grew from virtually zero to 30,000.

“It didn’t take a genius to know where the audience was,” Kilshaw said. As importantly, engagement through the digital channels was strong – as much as 30% of the magazine’s Facebook fans, for example, were participating in conversations. “So it wasn’t just quantity – there was a quality component [to the digital audience] as well,” he said.


Educating advertisers

That was enough to convince the Daily Tea team to replace the existing business model, which was based on print subscriptions and display advertising, with a digital/mobile-first strategy built around a mix of sponsor and paid content. One important step in the transformation was educating existing advertisers about why native ads were a better way forward than traditional banner advertising.

“I believe there’s a desire among an enthusiast audience to be loyal to certain brands – they want to find brands they love,” Kilshaw said. “For this reason, sponsor content works particularly well for niche audiences. The advertisers understood that.”

The Daily Tea made the transition easier for its existing advertisers by locking in their display campaign commitments through 2014 – meaning The Daily Tea will produce all the content for each brand for the rest of the year at no additional cost. For new advertisers, The Daily Tea will sell native ads on a CPM basis, based on a minimum of 10,000 impressions.

Banner ads are still in the digital mix, albeit in more of a supporting role to the sponsor content. “There’s a visual connection between the banner ad and the sponsor content,” Kilshaw said. “It’s not so much to get people to click on the banner ad, but to get readers to more fully understand that this is sponsor content. It’s another way of branding the article.”

The early returns are positive. Open rates for the first round of sponsor content have averaged between 5-10% – far outpacing banner click-through rates.

“Clearly, that’s a very nice engagement metric to take to clients and say, ‘don’t run banner ads, run sponsor content instead,’ ” Kilshaw said.

Creative development for native ads

The Daily Tea is building a small marketing services team to help Daily-Tea-native-mobileadvertisers create native content. Jamie Santoro, hired 18 months ago as a “brand journalist” who reports to marketing, is part of a weekly brainstorming session to generate story ideas for brands, with an emphasis on content that makes an emotional connection with the audience.

“Emotion creates engagement – and conversely, dull material gets ignored,” said Kilshaw. “If [sponsor content] does not generate a clear emotion, we go back and start again. We’re also clear on what crosses the line – if it’s just a commercial, we won’t do it. That’s a very real part of our process.”

(One criticism I have is that disclosure of the sponsor content is not as clear as it should be. Home page posts are labeled as “presented by [sponsor name]” with the brand logo. Sponsor content on topic landing pages, however, is not labeled until you reach the article page.)

Rethinking paid content

The Daily Tea didn’t just shake up its ad model. It also revamped its subscription offering to reflect its digital-first focus. Subscribers used to pay $24.99 for six print issues a year; now, for the same price, they will get access to premium digital content along with the annual Daily Tea Guide, a 150-page “bookazine” that features longer-form articles, sponsor content, catalog pages and a few display ads. The first Daily Tea Guide will be released in September.

The “bookazine” is emblematic of a trend many legacy publishers are pursuing: transitioning print into a channel for specialized, premium content. Readers will also be able to purchase the guide separately for $9.99.

Kilshaw said about 10% of The Daily Tea’s web content will be behind the subscription wall, and producers are currently developing more original content for the site. A digital-only subscription will be $19.99 a year.

The Daily Tea’s transformation shows that innovation doesn’t require deep pockets – just a willingness to experiment with new models and allocate resources to where the business is going, not where it’s been. The moves carry no guarantee of success, but at least they’re pointed in the right direction.

Spanfeller: ‘Web advertising works’

Former Forbes.com CEO Jim Spanfeller believes the page view-driven, ad-supported model that helped build Forbes.com into a digital powerhouse for financial news will work in other vertical markets, beginning with the food sector.

Spanfeller’s media startup, Spanfeller Media Group, announced yesterday that it has secured funding for its first topic-specific website, covering “all things food.” The site is scheduled to launch in October; the company will announce the site’s name and editorial director next month.

In a phone interview, Spanfeller described a business model built around great content that attracts lots of eyeballs, which can be monetized through advertisers. It’s the same model that Forbes applied to rapidly grow its digital business over the past decade; Forbes’ digital properties were pulling in around 18-20 million unique visitors a month when Spanfeller left in mid-2009.

Spanfeller believes there’s still plenty of life in the ad-supported online model.

“The bottom line is, Web advertising works,” he said. “We can better define how it works and continue to push the boundaries to make it work better. But I don’t think it’s radically different than the way it’s been through the ages. First you have to generate attention and audience. That’s why advertisers will come to you.”

The food sector, he said, offers an opportunity to go “deep and wide” with coverage of everything from recipes and cooking tips to restaurants, entertaining, and food-related travel.

The site will offer a mix of original content, aggregated content, curated content, consumer content, and plenty of multimedia.

Spanfeller said paid content may be an option for specific, “high-value” content. “It won’t be a huge part of the revenue mix, but there’s an opportunity for it in all of our verticals,” he said.

The bulk of the revenue model, however, is being built around advertising. Because the food sector is more brand-centric than direct response-oriented, the new site will give brands “a more elegant solution for advertising, rather than spank-the-monkey-type ads,” he said.

Spanfeller did not specify other what verticals his company is considering, though he did note five areas that they will likely avoid: News, finance, spectator sports, entertainment and technology. “These are not impossible, but they’re harder to go into,” he said. “We’re a fledgling startup, so we want to go where it’s easier, not harder.”

The initial focus is on consumer topics, though he did not rule out B2B verticals down the road.

Go niche or die?

If you were a leading destination site on the Web for your category, with more than 100 million page views a month and more than 1.5 million registered users, what would make you want to cannibalize your own business?

In the case of The Knot, an online wedding planning portal, it recognized an impending threat posed by niche players and decided to embrace the long tail instead of being consumed by it. “Small niche sites must be the future of your brand,” company CEO David Liu told attendees of last week’s Magazine Innovation Summit in New York.

Despite The Knot’s success – Liu said more than 80% of the “marrying audience” registers on TheKnot.com – three trends were leading the leadership team to worry about the company’s long-term survival:

  1. Internet adoption is beginning to flat line.
  2. Viewing consumption of media has shifted. In 2009, time spent on the Internet will drop for the first time.
  3. 9 million domains were registered in the second quarter of 2009 – an average of 99,000 a day.

These trends, Liu said, show that even as demand for online media reaches a cap, competition for consumers’ attention is fierce and getting fiercer. “This means you cannot get too specific or too precise with information,” he said.

So Liu and his team spent the last couple of years investing tens of millions of dollars into rebuilding its infrastructure in order to act as its own long tail. “Rather than let the long tail eat our lunch, our decision was that we need to cannibalize ourselves by creating our own niche destination sites,” he said.

The company has launched more than 200 such sites this year alone, segmenting its audience in two primary ways:

  • By geography, which makes the wedding site a lot more relevant for consumers. Think limo services in Tulsa, or caterers in Camden, Maine.
  • By topic, to take advantage of increasingly popular “theme” weddings – retro weddings, Hindu weddings, green weddings, even gothic weddings.

The impact on the business has been measurable: Site traffic is up 19% monthly. “Imagine what that increase in traffic would cost you by buying keywords on Google,” said Liu. “We’ve done it simply by being more relevant.”

Financially, the company appears to be in good shape coming out of the recession. Second-quarter revenues rose 3% over the year-ago period to $29.5 million. Online advertising revenue increased 6% over the prior year’s second quarter, driven primarily by local advertising.

The next step for Liu: Get even narrower in focus. The company is using heat-map analysis of message boards to find ideas for new destination sites – for example, college chapels that are popular wedding sites for alumni.

“The constraint of a portal environment is the Achilles heel of dominant category leaders,” said Liu. “If you’re not pursuing a niche strategy, you won’t be here in five years.”