Here's Business Insider's Crazy New Strategy to Boost Ad Revenue
Get ready for more slideshows on Business Insider, but this time with a twist: they'll be paid for by an advertiser and likely include some nod to a brand's product or service.
Henry Blodget's business-news site, known for its sensational headlines, content aggregation and call-it-like-you-see-it sensibility, has begun pitching advertisers on the idea of complementing their ad campaigns on Business Insider with a variety of sponsored-content elements -- following in the footsteps of media companies such as BuzzFeed, Gawker Media and Atlantic Media, which are moving to either supplement, or all-together replace, traditional display ad units with content that advertisers are paying to place alongside editorial content.
Business Insider has sold sponsored posts and emails in the past, but is now doubling down on those efforts with what it calls "Brand Insider," which will allow advertisers to buy sponsored slideshows, videos, and even create their own blogs on subdomains within Business Insider that would mix branded content with relevant Business Insider editorial. (The site hasn't closed a deal for a brand-sponsored blog yet, but Huffington Post's collaboration with IBM is an example of what one might look like.)
The site will continue to run traditional ads, which currently account for the majority of Business Insider's projected $12 million of 2012 revenue (2011 revenue was $7.7 million and Mr. Blodget has said that revenue was $4.8 million in 2010.) But company President and COO Julie Hansen believes there's a lot of untapped potential in selling content opportunities to brands.
"If it were half [of total revenue] in a couple years' time, that would be great," she said.
The foray into branded content is being led by Pete Spande, the former Federated Media CMO who joined Business Insider in March as its first chief revenue officer. (Mr. Spande was already quite familiar with Business Insider since Federated Media sold ads for the site until last summer.) In an interview, Mr. Spande said his sales team is focusing initially on helping advertisers simply find a new audience for compelling content they've already created.
"Very often there's work being done that might be living on [a brand's] YouTube channel or might be something they have for internal training that 's not easily found on websites," Mr. Spande said. "We're able to give brands the spotlight to get that content seen by a large audience." Business Insider then takes that video or other type of content, slaps a snappy headline on it and posts it on the site with a "sponsored" disclaimer.
Mr. Spande said he expects advertisers will do both sponsored posts and display because readers are more likely to engage with a display ad after reading or watching a sponsored post from the same advertiser.
Business Insider advertisers have favored sponsored videos early on. One of the first examples is a video from Jack Daniel's that carries the headline "A Must-See for Serious Whiskey Drinkers." The video feels like a rather bland commercial and is downright dull compared to most Business Insider posts, but has still received more than 100 social shares in the month it's been live, perhaps proving Mr. Spande's point that the site's readers are simply prone to sharing.
Dow Chemical and Dell has also published sponsored videos. It's tough to tell how readers are receiving the posts beyond looking at sharing numbers because Business Insider doesn't allow reader comments on these posts nor does it display the number of page views each receives like it does for all of its editorial content.
Still, no one can deny the size of the large and fast-growing platform Business Insider is letting advertisers tap into. The site, which now employs 102 people, attracted 7.5 million unique visitors in the U.S. in September, according to ComScore, up 59% from 4.7 million the same month last year. (The company says its internal numbers show that it registered 19 million visitors last month, which includes two sources ComScore's measurement doesn't track: international traffic and traffic from mobile phones and tablets, which now account for 26% of the site's overall traffic.)
How did it achieve such growth? One way is by embracing a loose definition of what business news is as it continues to expand into new verticals. For example, a recent post on the home page offered readers advice on fantasy football. Ms. Hansen said the site will continue to push the boundary on what it deems relevant to its audience as long as people are reading it and the composition of its readership doesn't shift drastically. But only to a point.
"We're not posting viral kitten videos," she said. (Except a quick search on the site for "cats" turns up a post from last month titled "15 Pictures of Cats Saved By Firemen"; it's been viewed nearly 10,000 times.)
The company is also trying to diversify its sources for revenue in other ways. Ms. Hansen said its events business, which consists of six to eight conferences a year, is profitable. And the company is slowly adding subscribers to its research-subscription service, BI Intelligence, though Ms. Hansen acknowledged that that business is still in a test -and-learn phase. "We can't publish enough about HTML5, for example," she said, "but at the same time, for all we write that 's thoughtful and considered, people tend to prefer a [Powerpoint] format."
If either of the sponsored-content or research-business lines take off, Business Insider may very well become a model for the type of diversification digital-media companies need to thrive. If not, the company, which isn't profitable, may have to add to the $13.6 million in venture capital it's raised to date.