The Newsonomics of Quartz's -- Obsessive -- Explainer Business Model
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First published at Harvard’s Nieman Journalism Lab
Quartz, at the tender age of 19 months, can hardly be considered a father to Vox, FiveThirtyEight, and The Upshot. Clearly, though, it’s a major influence. It marked and followed an explanatory way forward way back in September 2012 (“The newsonomics of Quartz’ business launch”), and its model tells us a lot about this widening field.
Fast innovator Atlantic Media wrote the playbook for Quartz. That playbook almost seemed too fashionable:
✓ Designed for mobile and web-native
✓ A browser app only, not available as iOS or Android native apps
✓ No small-unit banner ads, with native ad “posts” the primary format
✓ Focused on visuals, with big photos and lots of sharable charts
✓ A global focus, in coverage and in audience, from the start
Even the name Quartz seemed a bit avant-garde, its qz.com url a little unorthodox. We knew what a Fortune, a BusinessWeek, a Wall Street Journal, an Economist, a Financial Times meant, both directly through their names and through their long histories. Quartz seemed to be going up not only against all of those, but Bloomberg, Forbes, and Thomson Reuters as well. All those business brands seemed formidable and more greatly staffed in journalists than Quartz.
And yet, before its second birthday, Quartz has found a niche. Let’s look at its newsonomics and how they provide a window into the hot “explainer” movement.
In short, its influence on today’s digital news world derives from three things: Its impressive audience and advertising strategy; its own “obsessive” model of mobile-friendly, explanatory journalism; and the wider sending of Atlantic/Quartz talent off into positions of influence in the next news, and its influence on a wide range of sites that have launched since Quartz’s birth.
Let’s take the talent point.
Justin B. Smith, Atlantic Media’s then-president, was a key shaper of Quartz. Smith is now CEO of Bloomberg Media, with a huge staff, deep pockets, and lots to figure out. His fellow co-conspirator at Atlantic Media and with Quartz, Scott Havens, just joined the soon-to-be-new Time Inc. as senior vice president for digital, after five years at Atlantic. Andrew Perlmutter, an Atlantic strategist at the time of Quartz’s launch, was named executive vice president of Boston Globe Media Partners by new owner and publisher John Henry. Just last week, well-followed Quartz writer Christopher Mims (from his bio: “He believes that the most interesting things about the universe have yet to be discovered, and that technology is the primary driver of cultural change. He is often surprised and delighted by what people will say on record”) took on the WSJ personal tech column job that Farhad Manjoo had vacated in January by leaving for The New York Times. That’s a confluence of influence that speaks to the thinking and execution at Quartz and elsewhere within Atlantic Media.
So, let’s look at the numbers Quartz reports:
- About 4.7 million monthly unique visitors.
- 40 percent of readers are from outside the U.S. The top five countries, in order: U.S., U.K., Canada, Australia, and India. Given the India audience, Quartz is launching its first non-U.S.-centric site, Quartz India, in June, partnered with scroll.in.
- More than 60 percent of the audience is executive level (according to Bizo), with 90 percent of the U.K. audience at that level.
- 70 percent are male, and with an expected skew to tech, sometimes standalone tech and often tech within a variety of companies.
- 40 percent of its traffic is from mobile, with mobile heaviest on evenings and weekends, as at other news sites. Smartphone usage dominates the early morning, and out-distances tablet usage overall about 4-to-1.
- Fully 70 percent of traffic is driven by social links.
- 70,000 readers have signed up for The Daily Brief newsletter. The newsletter has been an important driver of habit and usage — and registration data.
If the audience is high-demo, its ad sell comes down to a single word that Atlantic Media brandishes well: influentials. From Quartz to The Atlantic to National Journal and Government Executive, its pitch is not based simply on wealth or spending ability, but that its readers as deciders, agenda setters, and idea connectors (“The newsonomics of influentials”).
Quartz is a high-end play, differentiating itself from the more mass-oriented Business Insider and Forbes.com.
The site has already booked 600 percent the revenue for the first half of 2014 as in the same period for 2013, says Jay Lauf, co-president and publisher of Quartz and a veteran of Wired magazine. The site’s native ad strategy fit its time of birth well. It has never run traditional banners — why jump aboard a slowing train? Advertisers include Boeing, Chevron, Cadillac, G.E., and Bank of America; more than 40 percent of advertisers are in financial services.
Lauf says the site is getting an 80 percent ad renewal rate, after first being tagged as the “hot new thing.” In total, Quartz has counted about 45 “blue chip” advertisers. That’s a big number, and shows how much Fortune 500 brands are embracing “share of voice” and native advertising. Quartz aids these content marketers in their creation, ranging from full creation to “light touch” help — a variation of content marketing digital services, a major growth area for all the national and regional publishers investing in capacity to do that work.
A Goldman Sachs look at top innovations of 2013 is the kind of advertising that plays to Quartz’ strength. It’s a major client, and its white paper-like offerings fit the thought-leader vibe of the site overall.
Only 30 percent of Quartz’s ad revenue comes from those native ad posts that caught so much attention when launched (and which The New York Times borrowed from for its new Paid Posts in NYT Now and elsewhere); 70 percent comes from larger-format “Engage” ad units that dominate web pages.
Advertisers pay rates in the range of $60 CPM or higher (cost per thousand impressions). That’s 2-4× what banners will bring in on national sites. Figure that Quartz is on a run rate to produce $8 million-plus in revenue this year.
In addition to native ads, events are becoming a bigger part of the revenue strategy. They’ve long been an Atlantic Media strength, and now that Quartz has developed sufficient audience, it will host seven or more in 2014. Key here are two revenue strategies, attendee registration and sponsorship. “The Next Billion,”its June 2 event in Seattle is priced at $599 (without an advance discount) and is sponsored by Intel. As the news events space heats up, the smartest plays here are extensions both of the journalism a company does and its connections to brands with good “influentials” budgets.
That journalism is framed around the idea of obsessions. “I’m a big reader of magazines, and the magazines I liked best had defining obsessions in what they covered and sometimes over-covered,” says Quartz editor-in-chief and co-president Kevin Delaney. The obsessions framing was at first internal; it now acts as the branding, and in some ways, the taxonomy of the site. On a practical level, it allows a smaller business news staff to cover a wider world, to think and act bigger. Quartz certainly picks its spots, covering some stories, while letting others go. (Even much larger business news organizations, though, do the same thing. Compare Tuesday’s widely-covered Twitter quarterly financials report — Quartz’ provocative angle was “Twitter is now in danger of being crushed by Facebook”— with the paucity of analysis of Time Warner’s.)
The big idea for newsies: Get outside the silo of beats and embed the macro context into anything the site writes. As an editor, Delaney knows that the 15 current (though changing with the news) obsessions — among them, “Indian Elections,” “Future of Finance,” “Ukraine Crisis,” and “New U.S. Economy” — push journalists “to think through what’s most important in the stories, not just process the news.” Not processing the news means avoiding the mushy middle of stories between 500 to 800 words; Quartz’ stories run short or longer.
Quartz’s visual journalism push now seems more commonplace. The site not only uses charts often to tell its stories, it has open-sourced its Chartbuilder tool, with wide usage among other media.
Even though the majority of readers don’t use the obsessions taxonomy that much — guess what, they like to scroll — it’s both a guidepost for its staff and a high-profile branding that says prominently that Quartz is a thinking person’s business news site. That staff now numbers 25 full-time journalists, up from 17 at launch.
Delaney got to pick his staff. Stop there: As I talk with news-change people in both legacy and startup operations, that ability to pick a staff is huge. It connects with the overused word “culture”: In hiring, editors like Delaney not only get a chance to find the talents, digital sensibilities, and storytelling chops they want — they get to build their culture through hires. Any newsroom, new or old, has its issues, but a new, well chosen, well paid one can spend so much more time on the work and so much less time on the “change.” For legacy companies, a key question is how to emulate that kind of environment, ASAP. Take a tour of Quartz’ journalists and you can see a wide-range of skills, humor — and potential. Those qualities show, subtly, in Quartz’ stories.
The “obsessions,” of course, are just a foundation. It’s the voice of Quartz — serious, pointed, and yet casual — that gives it a personality. Delaney credits global news editor Gideon Lichfield, who came to Quartz after 16 years at The Economist, with establishing that style. “It’s hard to express,” says Delaney, “but it’s conversational, global, digital, and smart. Treat readers’ time well. Above all, don’t talk down to the readers. And don’t take yourself too seriously.” The effort, that serious casual, borrows much from what we’ve all learned in last 20 years on the news web. Often, it works quite well; less often, you can find yourself midway through a story and wondering why you’re still reading. Throughout, you get the sense that these are journalists grappling for answers on big issues and little, much as their readers are.
Quartz, at its best, zags when the competition zigs. Whether it’s the coverage of the next Netflix (“The track-changes version of Netflix’s vision for the future of TV”), contrarian advice (“Forget about learning to code — to get rich in tech, become an accountant”), or real estate comparisons (“How many houses can you buy elsewhere for the price of one in London?”) — chartified, of course — readers are unlikely to think they’ve seen Quartz’s take on current stories in other places.
We can see Quartz as part of that larger movement toward explainer journalism. What does Delaney think about the explainer wave? As The Wall Street Journal veteran he is (having left as WSJ.com managing editor to start Quartz), he takes a longer view than most: “News organizations — including Quartz — have been explaining what the news means for awhile.”
Yet the Quartz sensibility is now a cousin of everything from the new NYT Now to Circa to Inside.com to Yahoo News Digest, as everyone moves on to the coming majority-mobile opportunity. Explainer journalism, of course, isn’t only about mobile, but the its rediscovery coincides with this new mobile age.
My sense is that this great flowering (and great hype) around explainer journalism will soon be absorbed into the wider changes in how news is created and consumed. Though the names starting sites have drawn disproportionate attention, a kind of within-the-house celebrity journalism, we’re still talking about only dozens or hundreds of journalists hired. Almost all seem focused on an American intelligentsia, albeit an intelligentsia that’s highly attractive to advertisers and in its willingness — given the right proposition — to attend a conference or buy a subscription or become a member.
At this point among the contenders — Atlantic Media’s The Wire, Quartz, Slate, Vox, FiveThirtyEight, and sites that may tumble out of First Look Media, to name just a few — we’re beginning to see a kind of Darwinian competition. Even the intelligentsia only has so much time and will make choices. I loved The Upshot’s spare story and great visualization of “Up Close on Baseball’s Borders”). But FiveThirtyEight’s 773 words and a scatterplot on “Do April Showers Bring May Flowers?” exceeded my wonk quotient; I’d rather see the answer to the latter in one of Larry Kramer’s restyled USA Today graphics.
While social referrals are an essential nutrient for all these newer sites, one important metric to watch over the next 24 months will be how much their direct traffic increases. What Quartz and its competitors are now fighting for is new habitual readers. They want to encourage daily check-in; they want to be on the first screen of our smartphones.
Where does Quartz go from here? It’s got new competition, but its business niche helps distinguish it from the newer explainer sites, as does its 19-month lead in gaining attention. Is it really a business site? Well, yes, but it travels well beyond the edges of business, and, interestingly, does it in ways different from what sites such as Business Insider and Forbes do. Clearly, “business” is a good category to claim, but how you then work its edges will make a lot of difference in how well you can really monetize your audience.
Quartz will need to find continued growth. The events strategy is a key to that. It will bring in about 10 percent of Quartz’ revenue in Quartz Events’ first full year of operation. Overall, Atlantic Media brings in 20 percent of all its revenue from events, so Quartz should have headroom there.
Then there’s that elusive question of reader revenue. Though Quartz’ native ad innovation is impressive, and related events revenue will help, all the new sites find a common question: how to balance their revenue streams over the longer term. Without a legacy print publication that people are used to paying for (like Quartz’s parent/cousin The Atlantic), how do you pry payment out of readers? Slate is the latest to try a new tack there, with its new membership program.
Will Quartz test similar waters? Not soon. “Right now, we embrace the open web, full stop,” says Lauf.
And then there’s the question of where Atlantic Media will next go. The company has hired well, in both executive and journalistic ranks. It ranks “culture” as one of its foundational values, putting it on the top navigation of its site. Owner David Bradley showed the industry how a company born in 1857 could be reshaped into a leading digital/print publisher. Now, he must decide on his next generation of leadership, and how much Atlantic Media will continue to be a serial product launcher (Defense One is the latest, launched a year ago) and how much it’ll become a buyer or a seller.