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Not all traffic sources are created equal

Given the relatively short history of the internet, 2008 can seem like it was an epoch ago, but there was a very public exchange in February of that year that presaged a lot of the media industry turmoil still to come.

Sam Zell, the billionaire real estate developer, had recently purchased the Tribune Company for $8.2 billion, and his lack of experience in the sector caused no shortage of trepidation among the journalists who worked at the company. To ease that trepidation, Zell went on a public listening tour across all the various newsrooms he now owned, and that’s how he ended up in this exchange with a reporter at The Orlando Sentinel:

Journalist: I hear you guys talking a lot about revenue and the bottom line and all that, but I’m a journalist. I kind of want to know what your viewpoints are on journalism and the role it plays in the community, because we’re not the Pennysaver, we’re a newspaper.

Zell: My attitude on journalism is very simple. I want to make enough money so I can afford you. It’s really that simple, OK? You need to, in effect, help me by being a journalist that focuses on what our readers want, and therefore generates more revenue. We understand unequivocally that the heart and soul of this business is the editorial side of the business. That’s our content. But if we don’t have the revenue, it doesn’t really matter.

Journalist: But what readers want are puppy dogs, and, I mean, we also need to inform the community, not just —

Zell: I’m sorry. I’m sorry. I can’t agr — You’re giving me what I call the classic journalistic arrogance — deciding that puppies don’t count. I don’t know anything about puppies. What I’m interested in is, how can we generate additional interest in our product and additional revenue, so we can make our product better and better. And hopefully we get to the point where our revenue is so significant that we can do puppies and Iraq.

Apparently, the journalist then stepped away from the microphone without properly acknowledging Zell’s points, which led to the billionaire uttering a barely audible “fuck you” to send her off.

By the next year, Zell had steered the Tribune Company into what was then the largest media bankruptcy in history. But he wouldn’t be the last media owner to clash with his own journalists about how to prioritize content coverage. In fact, it’s become a fairly consistent point of contention between the journalists who produce the bulk of the editorial content and the executives who are convinced they’re the ones who truly understand what the audience wants.

Case in point: G/O Media. Most people know it as the holding company that took over the Gawker Media assets, and over the last several years it’s been in near constant conflict with its editorial staff over how to steer coverage. In 2019, its “stick to sports” edict led to the entire Deadspin staff resigning en masse, and G/O Media has cycled through a number of editors across all its publications who ultimately left because they weren’t given enough newsroom autonomy.

The latest conflict to spill out into the public was between G/O Media executives and staffers at the gaming outlet Kotaku. According to a report at Digiday, executives have decided that the site should shift its emphasis away from day-to-day gaming news and focus instead on writing in-depth gaming guides that gamers seek out when they’re stuck on a particularly difficult challenge. Those executives have apparently looked at Kotaku’s internal analytics and determined that gaming guides generate much more traffic, on average. 

But there’s a problem with this logic: not all traffic sources are created equal. By trading out gaming news for gaming guides, Kotaku would be swapping its loyal audience for drive-by readers, most of whom land on the site by way of Google. In fact, G/O Media executives are well aware of this dynamic:

The push was inspired by Kotaku’s competitors in the gaming news space, such as IGN and Polygon, both of which draw much of their traffic from guides content. Instead of focusing on the traffic spikes created by time-sensitive news stories, G/O management, per a company spokesman, wanted Kotaku writers to produce guides content that could generate a “long tail” of SEO-optimized traffic and thus lift Kotaku’s overall numbers, which have declined over the past year. 

And there lies the flaw in their logic: by treating all traffic sources as interchangeable, G/O Media executives fail to connect the dots between audience engagement and business revenue. While gaming guides may indeed generate more overall visits to Kotaku, it’s likely that the move will dilute the outlet’s venerable brand in such a way that actually damages its longterm revenue prospects. So many media outlets have failed over the past 15-or-so years simply because they were too focused on raw traffic numbers at the expense of true audience engagement.

To give you a better understanding of what I mean, I’m going to break down all the major traffic sources by the types of engagement they drive. Before I do that, let me issue a caveat that I’m making some broad generalizations based on industry trends and that, depending on your media niche, you may see different results. 

Ok, now that we have the disclaimer out of the way, let’s jump into my general framework for how to evaluate different traffic sources:

Search referrals

Out of all the traffic sources, I think search is the least valuable in terms of building your brand or a longtime relationship with an audience. These users are looking for a very specific piece of information and are mostly agnostic as to the source. Once they extract the information, they’ll likely leave without checking out anything else you have to offer.

So to recap: search visitors have no affinity for your brand and are extremely likely to bounce. They probably won’t sign up for your newsletters and certainly won’t convert into paid subscribers. Given your lack of first-party data on these visitors, they might not be very valuable to most advertisers.

That’s not to say that search visitors have no value. Because search is very intent-based, many of these visitors are often close to making some kind of purchase decision, and therefore they’re coveted by publishers that specialize in product recommendations that are monetized through affiliate links.

While search traffic used to be somewhat predictable, it’s becoming less so with the rise of chatbots and Google’s generative AI search results. 

Social media referrals

For this category, I’m specifically referring to instances in which someone clicks on a social media link and is driven to a publisher’s owned-and-operated website. I’ll cover native social media content further down in the piece.

So social media traffic is slightly more likely to convert into longterm audience engagement than search traffic, though these visitors are still top-of-funnel and prone to bouncing.

The biggest opportunity for publishers lies with their own social media accounts; if they can build a significant following, then they can start developing habits with their audience that will lead to better conversions down the line. For example, if I follow The Atlantic on Facebook, I’ll be exposed to its content more often, and that might lead to a newsletter signup or paid subscription further in the future. 

These audiences are still fairly fickle, especially as the big social media platforms continue to choke off distribution and devalue links. Over time, social media traffic is becoming less and less valuable to publishers.

Dark social referrals

By “dark social,” I’m specifically referring to content referrals from hard-to-track sources like SMS text messages, email, messaging apps, and Slack channels. For the most part, these visits are categorized as “direct” traffic in analytics dashboards.

Of all the outside referral sources, I think this one has the highest chance of converting into longterm engagement. The referral is either made on a one-to-one basis or within a small, unified group, and it requires more intention from the sharer than simply hitting a social media “like” button. Visitors from dark social are more likely to convert into email subscribers and to return on a more regular basis.

Homepage visitors

Homepage traffic is somewhat of a dying breed in the modern web, but it’s extremely valuable to publishers. Visitors to your homepage are very aware of your brand and likely to return on a semi regular basis. They generate better first party data, and they index extremely high for all sorts of conversions — newsletter signups, account registration, mobile app downloads, and paid subscriptions. 

Mobile app users

Getting someone to download your mobile app and log in is pretty much the gold standard of audience engagement. It’s especially great for subscriber retention, as users are much less likely to churn if they’re engaging directly with your app and have enabled push notifications.

The downsides: mobile display ads are less valuable to advertisers than desktop display ads. Also, users are less likely to make product purchases on their mobile phones, so affiliate links might drive lower conversions than the publisher’s website.

Newsletter signups

There probably isn’t a better indicator that someone will eventually convert into a paid subscriber than a signup to your newsletter. Not only do these users have a strong understanding of your brand, but they’re turning that brand awareness into a regular habit. And because inboxes are much less cluttered than social media feeds, a newsletter experiences something close to 100% audience exposure, at least for the subject line.

An email address is an important form of first-party data, and publishers can create segmented lists that are tailored to individual cohorts within their audience. For the vast majority of publishers, a newsletter signup is the most valuable non-revenue KPI.

Podcast listeners

Podcasts are a great form of audience engagement. Because the shows are distributed through RSS, no single platform has an algorithmic stranglehold on the format. Searching for and subscribing to a podcast requires a high level of friction, so this type of audience is extremely committed.

Podcasts also engender a high level of intimacy between the host and their audience. Parasocial relationships drive strong levels of engagement and are highly valuable to advertisers.

The downside to podcasts is that it’s extremely difficult to drive activity outside the podcast app; that high level of friction, in other words, goes both ways. Listeners are often consuming the content while engaged in some other activity, so they can’t always stop what they’re doing to click on a link or perform some other requested action.

Longform YouTube viewers

YouTube videos also drive a high level of parasocial intimacy. Video ads are highly valued by advertisers, and YouTube has the added benefit of a partner program that can generate revenue automatically.

Of course, YouTube videos are subject to algorithmic filtering that’s outside a publisher’s control, so it poses more risk than owned-and-operated channels. At the same time, a YouTube subscription is highly weighted within the platform’s recommendation algorithm, and you can also train your audience to hit the “bell” icon so they receive notifications whenever you post a new video. 

TikTok/Instagram Reels/YouTube shorts viewers

Shortform video platforms are much more capricious in their recommendations and less likely to surface videos from accounts you’ve subscribed to. Because the videos are shorter, there’s less brand recall, and users are extremely primed to swipe away from the video the moment they lose interest. These platforms are also generally bad about sharing revenue with content creators, and it’s difficult to drive traffic away from them to an owned-and-operated website.

Still, because they utilize both video and audio, they do still engender a parasocial relationship, even if it’s to a lesser degree than podcasts or longform YouTube videos. The best use case for them is repurposing your longform videos with shorter clips that might drive an audience to your podcast or YouTube channel.

What do you think?

As I mentioned above, I had to make some generalizations that won’t always apply to every single publisher. Do you think I underestimated the value of a particular traffic source? Did you figure out a way to squeeze higher-than-average business results from a specific platform? Tell me about it in the comments by clicking on this button:

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How Brad Hargreaves built Thesis Driven, a newsletter and data product focused on real estate

When it comes to knowing all the intricacies of real estate investment, few are more knowledgeable than Brad Hargreaves. In 2015 he founded Common, a company that manages rental properties and consults with real estate investors on building design.

And then in 2022 Brad decided to begin sharing his knowledge through a paid newsletter called Thesis Driven. Within a matter of months, it was generating six figures in revenue, and he so he stepped down from his role at Common so he could focus on building out a data platform geared toward real estate investors.

In our interview, we talked about why he launched Thesis Driven as a paid only newsletter, how his content is differentiated from most other real estate journalism, and why he thinks there’s an opportunity to build a Bloomberg Terminal for real estate investors.

Watch our discussion in the video embedded below:

If video embeds don’t work in your inbox, then go here.

If you want to listen to an audio version of this interview, subscribe to The Business of Content wherever you get your podcasts: [Apple] [Spotify] [Amazon Music]

I’m looking for more media entrepreneurs to feature on my newsletter and podcast

One of the things I really pride myself on is that I don’t just focus this newsletter on covering the handful of mainstream media companies that every other industry outlet features. Instead, I go the extra mile to find and interview media entrepreneurs who have been quietly killing it behind the scenes. In most cases, the operators I feature have completely bootstrapped their outlets.

In that vein, I’m looking for even more entrepreneurs to feature. Specifically, I’m looking for people succeeding in these areas:

• Niche news sites

• Video channels like YouTube, TikTok, and Instagram Reels

• Podcasts

• Newsletters

• Affiliate/ecommerce

Interested in speaking to me? You can find my contact info over here. (please don’t simply hit reply to this newsletter because that’ll go to a different email address. )

ICYMI: How Political Wire built its successful subscription offering

Quick hits

I keep seeing more and more case studies of publishers successfully leveraging Whatsapp as a marketing channel. [The Media Leader]

Lots of niche publishers are experimenting with building out their own marketplaces so they can capture more revenue than they otherwise would through traditional affiliate links, but it's harder than it looks. [Adweek]

This is what happens when publishers keep signing over their destinies to adtech companies that can wipe out their revenue with the flip of an algorithmic switch. [The Media Leader]

And you thought Forbes's main website was overloaded with ads: "One 700-word article was turned into a 34-slide slideshow, exposing the person who read it on a computer to about 150 ads instead of around seven for someone who read the original piece." [WSJ]

This is a good overview of how the WSJ approaches its TikTok channel. [The Audiencers]

Meta is cooking up yet another creator "bonus" program to distract us from the fact that creators fuel all of its platforms and that it should instead be rolling out a more formal revenue sharing program that adequately rewards creators for the value they bring. [Business Insider]

SUBSTACK: "We’ve seen from our data that writers who have been augmenting their publications with audio or video in some way—whether that be a show that anchors their Substack or supplementary materials such as narrations—grow their mailing lists and revenue 2.5 times faster than publishers who don’t use audio or video." [Substack]

This is a pretty detailed breakdown of how TikTok's new Creator Rewards Program works in practice. In this particular instance, the creator generated an RPM of roughly $1.20. Not atrocious, but not great either. [Passionfruit]

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