At Elite Daily, Traffic Is Down and Ad Revenue Is Up

Digital Media Site Posted a 221% Ad Revenue Increase For Q4

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Credit: Courtesy Elite Daily

Generally speaking, traffic is good for business.

But the digital media site Elite Daily, which was founded in 2012 and acquired by the Daily Mail's parent company in January 2015, has found that the two aren't always directly correlated.

Between November 2014 and November 2015, the site's traffic dropped 42.8%, according to comScore numbers. By the end of 2013, according to Business Insider, the site boasted 41 million visitors -- but between August and November of 2015 it averaged just over 16 million unique visitors.

The drop is even more pronounced when looking at SimilarWeb's unique visits data -- down to 21.4 million visits in December 2015 from 65.7 million visits in January 2015.

On Thursday, however, it was announced that Elite Daily experienced a 211% year-over-year increase in ad revenue for the last three months of 2015.

"We set very aggressive revenue targets, and we beat them," said Elite Daily president Miguel Burger-Calderon, recently returned from a quarterly board meeting in London. He declined to share Elite Daily's revenue targets.

Mr. Burger-Calderon said the company's Q4 ad revenue growth was the product of seeds planted throughout 2014. The company has also been helped by additional sales reps, a benefit of the additional resources that came with its acquisition. Prior to the acquisition, Elite Daily had just one sales person, he said.

The company's branded content business, staffed by eight dedicated employees, is growing, he added. Agencies are "getting to know our brand, starting to get to know our voice, starting to get to know our products," said Mr. Burger-Calderon, noting that branded content is the company's primary revenue generator.

According to an account of the Elite Daily-Daily Mail sale, the site generated $7 millon in revenue in 2014, "primarily from programmatic advertising."

Mr. Burger-Calderon said Elite Daily has dramatically cut the portion of revenue it derives from programmatic -- down from between 70% and 75% in the fourth quarter of 2014 to about 35% in the most recent fiscal quarter.

He's also not too worried about fluctuations in traffic, and pointed out that the company has been on a slight upswing recently. Mr. Burger-Calderon predicted that Elite Daily would beat 25 million unique visitors in January. "It's not our biggest concern, but at the same time you also can't just ignore it," he said of traffic pressures.

Elite Daily is still incredibly reliant on Facebook for referral traffic. According to SimilarWeb, Facebook was responsible for 97.3% of social visits in 2015, though Mr. Burger-Calderon said that figure seemed too high. Either way, Elite Daily seems particularly vulnerable to changes in Facebook's algorithm for delivering content; prior tweaks in that algorithm could explain why the site's traffic has dipped over the past year.

Mr. Burger-Calderon said Elite Daily has "worked really hard on diversifying our traffic and having more from other platforms" besides Facebook.

Parent Pressures
When it was reported in October 2015 that Jon Steinberg was leaving his post as CEO of Daily Mail North America at the end of the year, there were some who questioned whether the announcement was a statement of discontent about the company's purchase of Elite Daily.

After all, it was Mr. Steinberg, the former president of BuzzFeed, who reportedly suggested that Daily Mail and General Trust purchase Elite Daily in January 2015 for a sum that was estimated at between $40 and $50 million. So, he has skin in the game.

But comments made Thursday by DMGT chief financial officer Stephen Daintith seemed to put that theory to rest. "We're ... pleased with how Elite Daily is performing," he told analysts on an earnings call. He said the site is "proving to be a very important asset" for the company.

Mr. Daintith, on the earnings call, explained how the Elite Daily purchased has played into the company's U.S. advertising strategy. "Part of the reason why we bought Elite Daily was to strengthen the advertising pitch with the audience, the combined audience for Elite Daily and MailOnline in the U.S., and that seems to be working very well for us," he said. "So, very pleased with progress in the U.S."

For his part, Mr. Burger-Calderon said he still feels pressure to be profitable, even as part of a larger company that can provide a bit more runway. "They want to see a return," he said of DMG Media. "They want to see that we're hitting our targets that [were] set at the beginning of the year."

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