Dotdash is an anomaly in the current business landscape where publishers facing dwindling ad revenues are increasingly looking at other sources to supplement their income. The publisher, which makes lion’s share of its earnings from ads, expects to reach $160M in revenue and $40M in EBITDA for 2019, according to Axios.
Dotdash is a rare breed in the digital media industry. It’s profitable by a hefty margin and it still makes most of its money from advertising.Sara Fischer, Reporter and Author, Axios Media Trends newsletter
“Unlike other digital media companies looking to diversify revenue away from ads, Dotdash has found that its formula of scaling ad-based websites with evergreen content is working,” adds Fischer.
Dotdash reaches over 100M users each month, and is steadily growing its audience, head count, and revenue. It operates a collection of nearly a dozen lifestyle-focused websites covering topics like tech (Lifewire), health (Verywell), travel (TripSavvy), and personal finance and investing (The Balance, Investopedia).
So how does Dotdash do it? Here’s the story.
“We have to do it on our terms”
Dotdash rose from the remnants of About.com, the legacy internet brand popular for its “how to” articles. It’s parent IAC decided to rebrand the nearly 20-year old site in 2015, because while it was well known, its articles were so broad that nobody thought of it as a go-to resource for any one topic.
“The internet really changed, so back when About.com started, if you twisted your knee playing tennis, and you went on Yahoo or Excite or Google and had to figure out, “Oh, well, what’s wrong with my knee?” About.com was fine,” Neil Vogel, CEO of Dotdash who lead the transformation told Vox’s Peter Kafka. “But as the internet evolved, all of a sudden there’s a WebMD, and a Healthline, and you wanted that answer from someone more specific. If you were cooking dinner, and you wanted to make barbecue ribs, you wanted that recipe from Epicurious, not About.com.”
Vogel told Adweek’s Ann-Marie Alcántara that they decided to “only build sites we wanted to use.” That meant fewer ads—no pop-ups, no interstitial—and creating content that’s actually helpful. That means creating informative articles that turn up in search results. They are mostly written by professionals or subject matter experts, rather than journalists.
They are also periodically updated. For example, at Verywell, each article is updated at least once every nine months and reviewed by medical professionals. Dotdash claims to have spent $100M on content since the transformation began.
“We’re in the service of users, not advertisers,” Vogel said. “We care deeply about advertisers, but we have to do it on our terms.”
The narrative that publishing is dying and everything sucks is a false narrative. It’s a narrative put forth by people that are just now dealing with the outcome of bad decisions they’ve made over the last few years.Neil Vogel, CEO, Dotdash
Vogel told The Wall Street Journal that reducing the number of ads on Dotdash-owned properties has helped give the websites greater prominence in search-engine results by decreasing the amount of time it takes each site to load.
This has helped in more than making up for revenue lost through decreased ad load. Moreover, Dotdash focuses on evergreen content that has enduring relevance, and makes it stands in contrast to publishers that focus on news stories that have become increasingly unpalatable to advertisers.
All we care about is having comprehensive, accurate, great content on topics that matter to people. The problem with media is they build distribution on someone else’s terms, and then they sell ads on someone else’s terms.Neil Vogel, CEO, Dotdash
“Make real vertical brands, throw away the leftovers, refocus”
This led to the breaking up of About.com’s massive, general-interest content into six stand-alone vertical brands in 2016. They were Verywell (health), The Spruce (home), The Balance (personal finance), Lifewire (tech), ThoughtCo (education), and TripSavvy (travel).
The publisher also cleaned out its archives, going from about 1.4M pieces of content to less than 300,000, across its portfolio of brands.
Make real vertical brands, throw away the leftovers, refocus. And it’s working incredibly well. After nothing worked for a long time.Neil Vogel, CEO, Dotdash
“A big part of this success boils down to some very intentional design and technology bets that we made together,” writes Josh Clark, Founder of Big Medium, a New York design studio that worked on Dotdash’s early properties: Verywell, The Balance, and The Spruce.
According to Clark, the fundamental ideas driving these changes were:
- Make more money… by showing fewer ads
- Create a respectful UX that celebrates content instead of desperate revenue grabs
- Create a front-end architecture that is modular and nimble
- Make the sites fast
“This transformation led to something extraordinary in digital media—a turnaround,” writes Aaron Cohen for FastCompany. “While other independent media companies were engineering their coverage around social media, video, and trending topics, Dotdash doubled down on text-based articles about enduring topics and avoided cluttering them with ads—a strategy that Daniel Kurnos, an analyst at the investment bank Benchmark, credits with boosting Dotdash content in search results.”
“This is how magazines used to do it”
“Dotdash has a disarmingly simple approach centered on quality content, site speed, and respectful monetization,” wrote IAC CEO Joey Levin in a 2018 letter to shareholders. “The company doesn’t buy traffic nor rely heavily on social networks. Dotdash’s brands simply help people to answer questions, solve problems and find inspiration when they’re searching for answers.”
With nearly a dozen brands spanning lifestyle, personal finance, wellness, weddings, beauty and travel, Dotdash helps over a 100M users find answers, yielding an enormous cache of intent data.
Our readers come with specific intent, enabling us to connect advertisers to consumers based on stated interests using high-performing ads in a safe online environment.Joey Levin, CEO, IAC
“The move further reinforces Dotdash’s focus on Google (and its increasingly important affiliate commerce partner Amazon) as key drivers of its business,” comments Digiday’s Platforms Reporter, Max Willens. “Unlike the crop of publishers that rode social distribution to easy scale several years ago—and subsequently found their audiences yanked from them by algorithm changes—search-focused publishers rely on a much more stable and sustainable source of traffic.”
Google is not without its issues. But it is in the business of referring traffic and promoting quality publishers. With some of the folks in the social world, that’s unclear.Jon Miller, CEO, Integrated Media Co.
“Focusing on search-engine traffic and e-commerce is a popular strategy across the digital media sector, as publishers seek to wean themselves off social media networks and cultivate more reliable sources of web traffic,” says Benjamin Mullin, Digital Media and Advertising Reporter at WSJ.
He adds, “others, including magazine publisher Meredith Corp. and Ziff Davis, the owner of sites including Mashable and PC Mag, are capitalizing on a rising tide of search traffic.”
Meredith, which owns magazines like People, AllRecipes and Better Homes and Gardens, now gets about 70% of its web traffic from search. This is in part to an emphasis on reducing ad load and improving speed, said Stan Pavlovsky, former EVP, Meredith Digital (currently, President, COO, Shutterstock).
“We’ve figured out that contextual targeting is better than trying to get 800 data points on somebody and trying to prove what they want,” Vogel told Digiday. “If you’re on our site trying to figure out if your child has a fever, that’s all we need to know. This is how magazines used to do it. People, in their moment of intent, are very easy to understand. You don’t need 8,000 ad tech vendors to retarget that person to deliver value to them.”
“Increased the brand’s ad click-through rates by 50%”
Sarah Sluis, Senior Editor for AdExchanger.com reported that in 2019, Dotdash helped a financial services marketer by looking for people reading content about retirement planning and savings on Investopedia and The Balance. The publisher created segments based on their behavior that were purchased programmatically by the marketer.
“The intent data captured by Dotdash’s sites increased the brand’s ad click-through rates by 50% compared to a non-targeted advertising buy using third-party data,” she added. While the segments cost more, and vary in size due to seasonality, the performance justifies the premium, according to Sara Badler, SVP of Programmatic Revenue and Strategy at Dotdash.
Dotdash is also helping marketers by sharing device-specific (Android and iOS) insights with clients. “Marketers are only targeting what they can see – and 50% of their audience has been taken away” due to changes like the Intelligent Tracking Prevention browsing restrictions on Apple devices, Badler told AdExchanger.
Traffic to Dotdash’s portfolio of sites increased from 45M visitors per month in 2016, to more than 90M in August of last year, according to Vogel. The publisher runs fewer ads, with no pop-ups or takeovers, and because the ads are relevant to each article, they perform better, adds Cohen. It’s ad rates have increased nearly 20% each year since 2016, and 25% of its revenue in 2019 came from affiliate marketing fees.
Another notable achievement, considering the current backlash against cookies, is in Vogel’s assertion that if “every cookie left the internet,” it would be bad for users generally, but Dotdash would still function, because the company doesn’t depend on other platforms and hasn’t let them own audience information.
“It’s a real, old-fashioned thing”
Dotdash has been expanding steadily. “We’re very, very actively looking. We’re super-disciplined in what we like. We like service journalism, we like evergreen content. It’s going to be health and wellness, finance, home, food, travel. Those are areas we’re really focused on,” Vogel told Digiday.
“We are really most concerned with building vibrant, loyal audiences and building brands, and the money will follow. When the money comes first, you have to do a lot of weird things, like buy a lot of traffic, or grow unnaturally to fulfill things you’ve sold. We’ve never felt comfortable doing that. We’ve seen the outcome when you do that,” he added.
In 2019, the company bought Byrdie (beauty) and MyDomaine (home) from Clique Media in January. It purchased Condé Nast’s Brides in May, and the cocktail-focused Liquor.com, in October. Recently Axios reported that it has acquired two new digital publishers, TreeHugger and Mother Nature Network, to create a new sustainability vertical within its portfolio.
“We’re trying to build the best service publisher on the web for the next 50 years,” said Vogel earlier. “It’s not tricks. It’s not gimmicks. It’s just, ‘Let’s make the very best content we can possibly make and not compromise.’”
The sources of traffic that delivered for doing low-quality things are evaporating. Ultimately, there isn’t really a place on the internet for mediocre and crappy content. It’s a real, old-fashioned thing: Do quality work. If it’s not, or not trying to be, then I don’t know what your future’s going to be. I think the whole middle is in danger right now because of how the world is shaking out.Neil Vogel, CEO, Dotdash
He told Adweek, “If we are the very best content, algorithms are going to find us. And people are going to find us, and then advertisers are going to find us.”