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March 27, 2017

Newsonomics: As Post, Times explore Snapchat, Quartz Messaging App Celebrates Its First Birthday

Messaging and news. It’s the latest double scoop, as the Washington Post makes itself the through-the-day Snapchat Discover news provider, following an announcement only a week earlier that the New York Times would devote a half dozen staffers to publishing a daily Snapchat edition. Snap Inc. – valued at about $20 billion ahead of its IPO — and its fellow messaging platforms offer up huge audiences, some of whom have moved well beyond simply friend sharing, much as Facebook’s users did years ago. In fact, by some measures, messaging apps surpassed social networks in unique digital audience within the last year.

As the biggest news companies test out the product making and audience development that messaging offers, they can look to a 2016 launch for some guidance.

Quartz, the almost-five-year-old business news start-up, launched its first app one year ago [POLITICO: “Quartz’s chatty app”]. And, so far, the product that Apple and others have touted as a top 10 news app, has generated some attention-getting engagement numbers. The company reports data that shows intriguing engagement with the new product, and advertising sales monetize its 300,000 “active users” well.

“Fifty per cent of the people who have downloaded the app [or 600,000] are active users of it, meaning they are going directly to the app at least once a month,” says Jay Lauf, co-president and publisher of Quartz.

Quartz launched the app last February, largely before the current moves of news companies to exploit the messaging craze.

“I don’t think we had that data in front of us when we made this decision, but all of our observation and intuition was that that’s what was happening. People were spending time in these two-way messaging environments. That’s a real native behavior. ‘Let’s explore that and what Quartz might be in that kind of format.’”

The app has contributed to Quartz’s overall growth. While we can mark that growth in the company’s digital audience and revenue, one other indicator stands out in this news landscape: Quartz will hire 68 new staffers this year, moving to a total of more than 250. Of those 68, “about 45% will be journalists, 40% business people, and the remaining 15% would be engineering and product.” As part of its growth, Quartz has doubled the size of its London office, to 30, and established an office in Hong Kong of less than a dozen.

 

First published at POLITICO Media on Feb. 17, 2017
Follow Newsonomics on Twitter @kdoctor

One app number that Quartz, an Atlantic Media-owned company, touts: 100 million. That’s in 100 million taps, the primary action that app users take to move their way through the newsy app.

Tapping is seductive with this app that is updated, roughly twice daily, and offers cleverly written notifications.

A year ago, I’d asked whether “a cute toy or a major breakthrough in product thinking” and whether it would catch on with users. Now, the numbers, and my own experience reinforces, that the intuitiveness of the messaging format works well as a way to deliver “news.” As users open up the free app, they find the greeting (“Good afternoon”) and then such stories, on Thursday, ranging from the scrutiny of investor Peter Thiel’s New Zealand dealings to FedEx shipping of a giant panda to China to the U.S. Patent and Trademark Office settling a gene-editing intellectual property case. Tap right and readers move on to a whole story, about half of which are Quartz-generated stories and half links to other sites.

It’s “business” in a way that the highly popular Marketplace radio program is business to many listeners. It’s a lighter, top-of-the-news presentation. Quartz presents both serious business stories, and softer ones, and with a serious sense of humor, a bamboo-chawing panda gif decorating one story on Thursday. We see the speech bubble load as an app user decides to tap to go deeper into a story, or choose “next” to get to a different one. That metaphor, in addition to the gif and tap-requiring gamification, distinguish this experience. Quartz says that 35% of the app’s daily active users get to the end of the app, meaning they read all of the content available to them – roughly a half dozen stories — at any time. The average daily active user, says the company, checks the Quartz app twice a day, spending about three minutes inside the app, says the company.

Quartz’s experience has been largely Apple iOS specific; it launched its Android version of the app just two months ago.

Of course, as a free app, advertising drives this business model, as it does with Quartz overall. Quartz says that single display unit within the app – which has featured BMW and SoFi recently – generates more than six times the industry average. Further, it says the click-through rate for the sponsor message is well above the standard — at 7.5%. Those ads fetch $60+ cost-per-thousand rates, parallel to Quartz overall, given the company’s success at selling its audience of
influentials. In its wider business, Quartz has emphasized branded content, early on in its life. The company tells me that about half of its 215 advertising clients have used Quartz’s branded content services. In total, Quartz has built 475 pieces of content for those campaigns.

“While a lot of advertisers may run a bigger campaign with us that has a preponderance of display, the campaign itself is anchored in a content program very often,” says Lauf. In other words, branded content often serves as the differentiator in selling, just as it has become that for the New York Times [POLITICO: “T Brand Studio aims to stand out amid crowded branded content battleground”].

One key is now mobile placement. “In this last year, the third year of our global executive study, a number of them that said the last ad they remembered was an ad in mobile, so it’s getting at which ads are having impact,” says Lauf. That’s a mobile ad key here: Well-produced mobile ads well-presented on increasingly large smartphones. That, and scarcity: one ad chunked in here and there, but not placed to overwhelm the reading experience.

Quartz’s audience continues to grow significantly, as seen below. At 12 million unique U.S. visitors monthly at last year’s end, Quartz is up more than 50% in two years. Jay Lauf says the company finds a non-U.S. audience of several million more in addition. That number is bolstered by Quartz editions launched for Africa and India; the latter is producing between 1.5 and two million readers a month. [“Newsonomics: Quartz expands into Africa, with a twofer strategy”]. (This week, Quartz announced the hiring of John Mancini, a digital news veteran, currently working as senior director of digital news gathering for NBC News, as its new global news editor.)

Video is helping drive that growth. Quartz says its videos produced 700 million views in 2016.

For 2016, Quartz, combined with The Atlantic, Atlantic Media’s other big consumer business, grew its revenues by 28%, according to Atlantic Media owner David Bradley. Though the company doesn’t break out revenue data, we can figure that Quartz generates about $30 million a year in revenue.

Given that growth, and that of its business-to-business properties [POLITICO: “’Government Executive’ exploits the journalism of change”], Atlantic Media in total continues to grow substantially. Bradley has told staff that the company plans to grow to more than a thousand employees by mid-2018, up from 700+ currently.

Zach Seward, Quartz’s senior vice president of product and executive editor, says the app is well staffed. “About four people on the product side and five people on the editorial side. It’s a lot and it’s intentional: We don’t think we could give our readers a great experience without devoting significant resources.”

I asked Seward what he likes out there in the news messaging space.

“I think there’s a ton of promise in Amazon’s Alexa platform, which most people don’t think of as a messaging platform but is to me because it’s a conversational interface. We have a Flash Briefing for Alexa that’s great, and other publishers are doing cool things there, as well. I like Good Housekeeping’s Alexa skill, for instance: You can ask it how to get rid of various stains.

“On messaging apps, I think one of the best examples is Poncho, which provides weather, horoscopes, and other information on Facebook Messenger, Slack, and other platforms. They do a really great job at writing, giving their bot—an anthropomorphic, androgynous cat—real personality and also deftly dealing with the challenge of accepting free-form messages from users. Bots may be automated, but it still takes a lot of human intelligence to do well.”
What’s next for Quartz’ innovation?

“ I’d be surprised if you don’t see us launch something in the coming year that’s in that vein, whether that’s an app, or some other kind of experience,” says Jay Lauf. I think down the road you could imagine deeper geo-location features.”

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