How important is Asia to Quartz’s growth and what are your plans for the region?
Asia accounts for 20 per cent of our overall audience. We have two journalists on the ground here in Hong Kong and we are looking to evangelise Quartz among advertisers based in Asia—brands with Asian-directed budgets. A lot of business is planned from here [Hong Kong] or Tokyo. We shifted our focus to Hong Kong [from Singapore] because Hong Kong still seems to be the centre of gravity in terms of advertising. If you’re going to put a flag in one place over here, Hong Kong seems to be the place. We also launched Quartz in India in June and have nearly quadrupled traffic in just three months. There, we have a readership verging on 400,000.
Are you still targeting next year to turn a profit?
We’re close to being profitable. We’ve accelerated investment in Quartz that may make it harder to break even next year. If we put it off to 2016, that will be OK. We’ve been beating expectations and have increased our headcount: if we hire everyone we have available we’ll have close to 80 or 90 people. We’re putting more journalists on the ground around the world and investing in sales and marketing. The next big spike you’ll see is in our tech and engineering group. Pulling forward some investments into this year may delay breaking even but we expect to break even with a more drastic margin in 2016.
Have you ruled out launching a paid-for product?
We would relish the opportunity but as we’re still growing our philosophy has been to create as little friction as possible to discovering our content and sharing it and I don’t see conditions currently that allow the launch of a robust paid product—not if your objective is to grow fast and to expand your impact.
Where is the publishing industry still going wrong?
Many publications are still slow to shift to the habits of their readers. There’s so much legacy cost and infrastructure to tear down before you can [move to a digital/mobile focus] in a sustainable way and I think it’s very difficult for [legacy publishers]. I sympathise with them; I root for all of us in publishing to do well. They have classic ‘innovator’s dilemma’—there’s still enough revenue being generated in traditional channels so it’s difficult to shift focus to channels that are not as easy to monetise. There’s no quick fix. We’ve had the advantage of no legacy infrastructure so have been able to calibrate the cost side in a much more disciplined way.
Why are we not seeing the launch of more mobile-first publications?
I think there’s a philosophical resistance in some corners of the world. There are still people who want to believe that the habit will remain in traditional media outlets. It’s also not clear how to make money [in mobile] so you don’t see people racing towards it. And I don’t think it’s easy to produce really high quality work that fits on the phone. At least in the US you are seeing more companies shift in that direction—tech companies—but they’re not so interested in media. I don’t think it’s a no-brainer to jump into a mobile media proposition.
One of the reasons it’s not clear how to make money [as a publisher] is that advertisers have not shifted their attention to mobile either. We think we have to establish ourselves in that space now and eventually monetisation models will emerge.
Native advertising has grown significantly in recent years, but there is still some apprehension around it. Why?
It’s difficult to do well. A lot of marketers don’t know how to tell stories in an authentic way. It’s a difficult task and until they build skillsets internally some will sit on the sidelines. I also understand resistance from readers who think they are going to be fooled. That means we have to be crystal clear and label what is coming from a sponsoring company and what is editorial. If you look at good native advertising—Goldman Sachs recently published a macro outlook as an ad on our site that was a valid piece of content that got a lot of interaction and is more powerful than standard advertising. If a company can figure out how to do that consistently I think it could become a very powerful marketing mechanism for them.
Would you refuse to work with certain advertisers on ethical grounds?
I’m not going to make moral judgements on legally operating institutions. For some people it’s a short distance from the Church of Scientology to vilified corporations… But I do reserve the right when it comes to matters of taste or when it comes to something that might erode readers’ trust.
What publications do you rate most highly aside from your own?
I love the New York Times; I’m a 20-year fan of The Atlantic; Gigaom offers thoughtful content on digital and technology advancements; I find The Guardian interesting and informative. Everything else, I find myself grazing on. I do subscribe to GQ as well.
One could argue that print magazines are becoming more valuable as a source of branding than as a primary source of content. Do you agree?
A great magazine cover story is still a driver of cultural conversation. At The Atlantic, the number one traffic-getters are usually cover stories. Quartz will aspire to do those kind of definitive stories. They will be purely digital, but we think we can do the same thing. If you are a [print] magazine you can leverage the power of a great magazine article online and leverage the power of online back into print. That’s a great symbiotic relationship that we’ve created at Atlantic [Media].