After years of surveying the business wreckage of failed digital journalism experiments, it’s nice to touch base with one that’s thriving, at least in a few key respects.
Five years after launching Quartz, the digital media news source for global business professionals, Atlantic Media announced yesterday that the publication turned a profit in its fourth full year of operation. What's more, Quartz is on the verge of a hiring spree set to add another 68 people to its global team of 190 by the end of the first half of this year.
President and publisher Jay Lauf continues to charge a rich premium for Quartz’s core offering of full display ads, with an average CPM of over $60. It’s a rate he’s kept for the past four-and-a-half years while enjoying an astounding 90 percent retention rate among advertisers.
User experience is key
His secret sauce is not so secret: Everything about Quartz’s content boils down to good user experience. Story selection focuses on interesting angles to many popular stories that few others think of. Journalists are free to dig deep into ‘obsessions’ that are more fluid than ‘beats’ and allow more freedom to shift gears when its 20 million monthly unique visitors are ready to move on.
The 325,000 global subscribers who get the free Quartz daily morning brief are given the most interesting content that Quartz can find each day, which usually involves a sending them off to other media sites instead of trying to build a walled garden. As a result, the brief enjoys a roughly 40 percent open rate.
The Quartz app was launched a year ago and now has 600,000 downloads. It delivers news in a unique chat format, whereby a chatbot continually checks in on the users’ appetite for volume and subject matter, acting as a personal news curator.
The Quartz advertising menu
Given such catering to the user, it’s no surprise that Quartz’s ads are as unobtrusive as possible. On the app they appear as a gif or in a speech bubble at the end of each session, which Lauf claims are selling out well in advance. On the qz.com website, it can be difficult to find display advertising at all. About 60 percent of ad packages contain some form of sponsored content, often as artfully displayed as the editorial works, if not more so.
“My argument is why not strive to make digital advertising that at its very worst is tolerable and at its best might be additive to the experience,” Lauf told Campaign-Asia on a recent trip to Hong Kong. “That is what we strive for—ads that are big and bold and beautiful or rich in valuable content. And as it turns out, those ads actually do better and the benefit rebounds to everybody—the reader gets the benefit of not a terrible user experience and maybe are entertained or informed by an ad. The advertiser benefits because they get better interaction and better results from those ads. And then the publisher benefits because I can charge 10 times the rate of a normal banner ad or more.”
Lauf has never run an IAB standard banner ad. He says the unit is broken, and it’s not just because they bring in pennies on the dollar, but because they lead to perverse incentives for publishers that wreck user experience.
“If you can only make $2 [CPM] on a banner ad and you’re an ad-supported business, you have two options,” Lauf said. “You either have to jam more banner ads into the experience or you have to generate a ton more page views in order to amass enough banner ads to make a difference. And so that leads to issues like clickbait, that leads to issues like pop-up ads that interrupt your experience. As we move to mobile devices these are less and less acceptable and that has led to ad blockers.”
Among the Asian commercial partners who are buying into Quartz’s custom ad model are Cathay Pacific, Standard Chartered Bank, the Singapore Economic Development Board, NTT, Fujitsu, Hitachi and the Japanese government. While nearly half of Quartz’s audience of business professionals come from outside the US, only about a quarter of Quartz’s revenue does so, with business from Asia in third place trailing behind the UK.
So Lauf feels there’s plenty of room to grow in Asia, starting with sponsored content which he said hasn’t hit its full potential in this part of the world. Meanwhile, new revenue areas like white label engineering and design solutions for mobile are attracting attention from marketers. Quartz’s AI-driven bot studio was created with a Knight Foundation grant for journalistic innovation. Now, Quartz is set to apply the technology powering its chatbot-enabled app to commercial applications.
Bot and sold
Quartz Creative came up with an interactive ad for US alternative lender SoFi that could help readers to decide whether or not going to grad school makes financial sense. In essence, it puts a brand chatbot at a readers’ feet instead of having users seek them out for help. Lauf sees more commercial extensions for this, such as a travel company chatbot that could help travellers sort out frustrating logistical headaches on-the-go in real time, at airports, for example.
“We’re not going to necessarily be the exclusive provider of this kind of thing,” Lauf admits, but notes he can help marketers “connect to customers in ways that are more inventive and are more native to the way people consume and communicate today.”
In this way, Lauf might argue, branching out into AI is less about trying to bet on the next big thing and more about following that same mantra of good user experience.
So don’t count on Quartz putting commercial technology ahead of journalism anytime soon.
“We’re really quite simple,” Lauf insisted. “We’re just trying to make high-quality intellectually rigourous journalism thrive in a digital age.”