Publishing is often treated as a monolith, but there are many types of publishers with different business models. There’s no one way to win in publishing, as in most things, but it’s worth observing successful models in order to understand what they did right, even if that’s no guarantee of success, despite how many people claim to be building “the Morning Brew of X.”
What Industry Dive built over a decade — 26 focused publications in 23 industry segments, over $100 million in revenue and nicely profitable — should be a new model for an army of clones, after it inked a deal to sell to events giant Informa for an enterprise value of $525 million. At a time when it can seem most publishing ventures don’t make money, Industry Dive regularly returned healthy profit margins while scaling to top $100 million in annual revenue. I’ve admired Industry Dive for years and had Sean Griffey, one of the company’s founders and the CEO, on first the Digiday Podcast in 2018 and The Rebooting Show earlier this year.
Here’s some of the reasons I see for Industry Dive’s breakaway success:
Keep it simple. I first started digging deeply into Industry Dive when we decided to expand from Digiday into new areas. I was impressed how Industry Dive was able to occupy so many business verticals, only I didn’t like how it took somewhat of a conveyor belt approaches to the brands. I was reminded of the Yahoo approach of stamping out verticals as Yahoo Autos, Yahoo Personals, Yahoo Jobs and so forth. As a “content guy,” my inclination was to create a differentiated product that would appeal to the contours of the specific industry. It’s why we created a separate brand for fashion and beauty in Glossy instead of turning to Digiday Fashion.
But every choice has a cost. Industry Dive chose the power of simplicity. Simple models and simple constructs are more efficient. They’re more efficient for people internally and externally to understand, and they’re more efficient to run. At one point, we had multiple content management system implementations across three tiny brands and syndicating content from one brand to another meant copying and pasting. Keeping a simple brand architecture and simple tech stack has downside risk of commoditization and blandness, but the upside is evident.
Have a playbook. There are football coaches with big, complicated playbooks and those who have stripped down ones. The former tend to try to outthink the other team, treating the game as a chess match between grand masters. The latter focused instead on execution, drilling players to execute the plays in the playbook flawlessly and betting if they do, the other team won’t be able to stop them even if they know the play.
It looks for industries undergoing a lot of change, often highly regulated, and with enough motivated sellers of tech and other services. This kind of programmatic approach takes out a lot of the guesswork and “gut” that ends up driving a lot of decisions.
On the content side, I’ve always found Industry Dive publications to be admirably consistent, taking a no frills approach to a simple goal: Be the must-read for busy executives that need to know what’s going on in their industry. Keep the design simple and ads reasonable. That no-nonsense approach means skipping nearly all media trends of the moment. There’s no pivot to video or the creator economy.
Embrace ads. Unusually for a vertical business brands – and somewhat ironic considering its new home with an events giant – Industry Dive skipped events. Most trade publications are more events businesses than media businesses. Industry events, particularly those that can convent a buy and a sell side, are high-margin products that end up being irresistible. Industry Dive chose instead to focus on what it was best at: aggregating high value audiences and putting well targeted sponsorship messages in front of them that perform.
Advertising is still a very good business, particularly if a publication is reaching a high-value group that isn’t easily found through automated buying platforms. In this world, data is still important, but the data that’s important resides in a database – even a spreadsheet – with information about a person’s professional profile. This kind of first-party data has long been critical to B2B media while many consumer publishers are scrambling to build their own stores of first-party data.
Make smart bets. There was a time when people were lionized for raising venture capital. The collapse of many media businesses under the weight of expectations of that capital, and the strings that come attached, has inevitably led to the pendulum swinging back to the Horatio Alger approach of bootstrapping. Of course, there’s no either-or, and it does come down to the type of business you hope to (and can expect to) build.
Industry Dive raised a $500,000 round to get off the ground. What I was always impressed by is that it made fair-sized bets from the start. Rather than start a single vertical and perfect it before moving on, samurai style, to other adjacent verticals, Industry Dive started in four verticals. This spread its bets and gave it opportunities to learn across different industries. But something Sean said to me about the decision stuck with me, something to the effect of, “Many people wait until they’ve perfected a vertical to launch a new one but they end up never launching a new one because they never feel like they’ve perfected the original one.” That is too true.
By 2018, Industry Dive had a highly profitable business – $22 million in revenue and 25% EBITDA – which gave it leverage to take bigger bets. It did that by selling a majority stake to Falfurrias Capital in 2019 to get a financial backer to enable bigger swings, which it took with a series of acquisitions that included the NewsCred content marketing arm and publications focused on finance, pharma and mobile payments.
Niche doesn’t mean small. A truism of business is that the least glamorous businesses are the most profitable. After all, it isn’t the sexy media companies with yachts in Cannes, it’s the data brokers. Industry Dive focused on important industries, often in the physical economy. It’s easy to snark about Waste Dive, but the waste-management industry in the U.S. alone is worth $208 billion – and, I don’t know about you, but I find it more vital to my life than TikTok creators.
There are many great sustainable publishing brands to be built in niches, particularly professional niches. These businesses do not require millions of people in the audience, so long as the “right” people are reached – and those are the people who make spending decisions on behalf of large enterprises. In our first podcast, Sean estimated Industry Dive’s brands each had $5 to $10 million opportunities, which he subsequently revised upward to $10 to $20 million. Most verticals can go far higher with added products like events. Gather together enough of them, you have a very big business. Niche media was often see as the junior varsity because the businesses could be nicely profitable but not massive. There’s a reason that BuzzFeed was covered 6000% more than Industry Dive, even though BuzzFeed’s current valued at a little more than half the enterprise value Informa gave to Industry Dive. But this misses that opportunity in building many niches. Here’s how Sean put it for me in December:
“There’s real value in 100,000 incredibly targeted, valuable people. In each of these markets, you could create a $10-20 million business, just marketing supported. But if you wanted a $500 million business, you had to do it a lot. For us it was how do you build a scaled niche business.”
Congrats to Sean and everyone at Industry Dive for building a meaningful and sustainable media business over the long haul – and doing it their own way.
House of Kaizen collaborates with publishers worldwide to build more sustainable businesses with best practices and experimentation for better acquisition, retention and lifetime value. Matt Cronin, founding partner at House of Kaizen, offers this insight into why subscribers are valuable beyond the direct, recurring revenue of their subscriptions:
Subscribers are better customers because of the length of their journey, and all the opportunities to make improvements to CLV along the way.
Sustainable Net Growth, adding new while retaining and renewing existing customers, is the outcome of a full journey effort to balance the subscriber experience with the lifetime value. Journey performance has a 20-30% greater impact on value and business outcomes than touchpoint performance.
Connecting subscriber journey stages with specific, optimizable aspects of the marketing and product experience can focus a teams’ effort where it will have the greatest impact on net growth over the long term, where customer value is created.
Invites to The Rebooting events
I’d like to start a series of events in the fall. I believe in-person media is an important form of humanistic publishing because there’s real power in bringing people together. The idea that virtual events would replace in-person events was always a fever dream. There’s too much value in human interaction. I’m starting to plot my own approach to events. I prefer smaller and more intimate gathering, preferably without hotel ballrooms and those terrible carpets. I want to start with a casual reader happy hour for anyone around NYC next month and then in the fall a series of dinners, likely also in New York City. Let me know if you’d like to be included (or partner as part of a sponsorship). I set up a form with a few fields to keep this organized. Any questions or ideas, please shoot me a note at firstname.lastname@example.org.
It’s a sign of the times that Facebook pulling the plug – sorry, putting on the backburner – a journalism initiative doesn’t lead to mass temper tantrums. At this point, Lucy has pulled the football back dozens of times. Facebook is phasing out its newsletter and news curation section of its app. This makes sense. Why mess with newsletters when the leading company in the space has generated $9 million in revenue? Facebook’s focused on TikTok. It makes more sense than to focus on individual stars instead of trying to buy goodwill from news organizations that will take any subsidy check but are still going to lobby governments to crack down on tech platforms and make payments to (big) news organizations.
The publishing industry is cleaving between those creating content for humans and those creating content for algorithms. The lines can be fuzzy, but what’s clear is the attention-based business models, when combined with automated ad buying, can create incentives where it doesn’t make sense to make content for humans. This kind of arbitrage publishing has always existed and likely always will.
Jeff Jarvis makes a good point on how much of news content does not provide unique value. Differentiation is a tougher path than jumping on the latest outrage. One problem I believe news organizations will have is being built with an attention-at-all-costs mindset makes difficult the pivot to providing such unique value that often underpins subscription models. Business models and editorial models are often in conflict, with middling results.
As Industry Dive showed, rooting out complexity is powerful leverage in a business, whether that’s in describing the company’s mission, its product set and pricing and its focus areas. One of the downsides of publishers rushing to any promise of incremental revenue is they added complexity to their organizations that ends up weighing them down more than the short-term revenue benefits.
I feel like ideas are regularly recycled. The degrowth movement is very reminiscent of similar concepts in the 1970s around population growth. Doesn’t seem very practical, especially for those not already well off. More likely would be to focus on sustainable growth.
Thanks for reading. Always enjoy hearing from people, particularly with their own summer job stories, so send me a note: email@example.com.
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