Industry Dive, a company that has built a diverse revenue model built on deep brand integration and lead-gen programs for advertisers, will tell its story to attendees on the Local Media Association’s upcoming D.C. Innovation Mission.
The company specializes in B2B verticals, from education to health care to marketing, and has built a diverse revenue model.
Industry Dive will share how they choose content verticals, and why “going small and deep” (versus chasing audience scale) can be a profitable model.
We caught up with Industry Dive’s CEO and Co-Founder Sean Griffey:
What was the original vision for Industry Dive? What white space opportunity or “job to be done” did you identify that you wanted to address?
I think it is always a good time to launch a company focused on business journalism. If you can deliver unique insights and valuable analysis to executives, you can always find a place in the market. That certainly was the core of our mission from day one.
That said, in the beginning, we were very focused on mobile products. As hard as it is to remember, when we launched in 2012, even companies like Facebook were still figuring out mobile. We felt that we could differentiate ourselves by creating superior mobile products and by focusing heavily on design. It worked well and is still a part of our company DNA but isn’t necessarily our core differentiator now.
Industry Dive covers a variety of B2B verticals. But you’re rigorous and precise in terms of how you choose what sectors to enter. Can you elaborate on your expansion strategy, and how you select niches to focus on?
We are deliberate about the markets we enter. We think the markets that meet the following criteria work best for our model of journalism
- Markets that are highly subjected to regulation or technological change. This makes them newsworthy and a must-read. Industry executives have to follow the news or risk missing something that impacts their company or career.
- Industries that are characterized by high capital spending. People may complain about their local utility company, but the utilities spend billions annually on infrastructure and equipment that keeps the lights running. Vendors chase those dollars and make good advertisers. So we like a niche like the utility space. Conversely, investment bankers control a significant amount of money but they don’t really purchase much to run their business. Markets like finance don’t do as well with ad-supported models and tend to require subscription revenue to survive.
- Industries will very large tradeshows. At Industry Dive, we aren’t trying to guess or create the next big market. We just want to execute in existing ones. A large trade show serves as a proxy to us that there is already an established market. A large tradeshow may have 40,000 attendees – all of them could be potential readers. Conversely, a tradeshow floor full of exhibitors illustrates the potential of an advertiser market.
- We like industries that aren’t highly consolidated. At a previous company, the telecom industry was a great market for us. At the time, however, there were dozens of wireless carriers. As the market has shrunk to basically 2 or 3 dominant players, the potential buyers in the marketplace have shrunk. This has impacted the ad market and makes it a vertical I wouldn’t rush to enter today.
There’s a lot of industry momentum around consumer revenue; i.e. “the pivot to paid.” But Industry Dive is solidly an advertising model. Tell us more about the model, and why you continue to believe that it can be successful? Are there consumer revenue opportunities that you’re exploring?
We are proving that ad-supported media models still work. The secret is making sure that you have a well-defined and premium audience and a direct relationship with the people who want to reach them. We don’t’ sell any of our inventory programmatically. We have direct reps that still work directly with marketers to understand their goals and needs. This allows us to develop premium campaigns that benefit both the advertisers and the audience.
I know some say that this is a by-product of being in niche business markets and that certainly helps. But it can be applied to general markets, too. In fact, there was an article recently in Digiday that talked about the NY Times ad sales in Europe after the implementation of GDPR. They turned off all programmatic ads and only sold direct. They found that they actually increased ad revenue over that time.
That said, I’m well aware that advertising isn’t the only model that works. Given the strength of our audience, we believe that other models like events, subscriptions, and paid research are additional options for us at some point down the line.
What’s the biggest lesson you’ve learned in building a vertical media business, and one that’s not built on VC money?
Two things come to mind:
1. It’s ok to ignore the latest trends and the flavor of the day. It’s ok to play to your strengths and not follow others. Much of this business is cyclical and the pendulum just might swing back to you.
2. Building a real audience takes time and can’t be hurried. VC money can help but it can only do so much to speed up the process. You have to be prepared for the long-haul.
The word “scale” gets used a lot, and traditional media companies have a history of trying to aggregate as many local users and advertisers as possible. That’s changing. What is your perspective on scale, and how local media operators should think about it?
I think the problem is that the measure of “scale” has been reduced to undifferentiated, commodity traffic. If that is media company’s only definition of “scale” than I do think they will have a problem.
But scaling is really about growing in repeatable and efficient ways. Building a single massive audience isn’t the only way to do that. Plenty of wildly successful companies have been built scaling in other ways.