Vox Media is poised to get another investment from NBC Universal, a deal that would value the publisher at $850 million, according to Recode. That lofty valuation is clearly a future projection: Vox Media brought in some $50 million in 2014, according to a Washington Post calculation. That’s half what that other VC-backed digital publisher, BuzzFeed, claimed to have pulled in that year.
But if you’re looking for doubters, don’t look among the ad-buying community, which sees in Vox truly premium content, reach with millennials and a state-of-the-art publishing platform. “The modern-day Condé Nast,” said Gian LaVecchia, managing partner, digital content strategy at MEC.
That’s particularly impressive considering how early Vox is in building a sales infrastructure. For all the talk of automation, sales remains a long slog, powered by deep relationships and a fleet of sales people. Vox, which has 450 employees, counts just 75 sales people among them. (That’s in line with two other digital publishers, The Huffington Post and Business Insider, which have about 75 and 63 salespeople, respectively.)
“They’re still gaining traction for some of their brands and continue to grow but have built a modern-day publishing business with unique voices, perspective and modes of distribution which set them apart from many other legacy competitors,” said Adam Shlachter, chief investment officer at Digitas LBi.
Buyers say what Vox lacks in scale, it makes up for in its ability to reach the Gen Y audience that advertisers are so desperate to sell to, through its editorial voice and proprietary publishing technology, Chorus, that makes for a smooth reading experience. Its approach has helped Vox make video ads for Nike, Applebee’s and Samsung, among others.
“While they don’t offer the scale the big boys do, they do offer this connection with the millennial segment,” LaVecchia said. “So it’s a different proposition — it’s not a display buy, but it’d be about buying into their custom content. It’s not always about reach but their authenticity, expertise.”
In addition to being a talent draw (star blogger Ezra Klein cited it in his decision to leave The Washington Post to help start Vox.com) and providing the smooth user experience that Gen Y demands of its media, Chorus also can have direct benefits to advertisers now that Vox is also letting advertisers use it to distribute and measure their native ad campaigns.
By giving advertisers access to Chorus, Vox offers a hint of its “secret sauce” that attracts brands, said David Eastman, managing partner at digital agency MCD Partners.
Vox has grown quickly. It reached 54.1 million multiplatform uniques across its eight verticals (SB Nation, Vox.com, The Verge, Eater, Racked, Polygon, Curbed and newly acquired Recode). That’s up 37 percent since July 2014, the first month full roll-up figures were available from comScore. Vox.com, which grew to 12 million monthly uniques in a year, showed the company is able to build a new media brand from scratch. Expansion also has come through the acquisitions of Curbed and Eater.
But scale is a factor in ad buys, and while Vox Media is ahead of other VC-backed digital publishers — including Business Insider and Vice (which itself bundles in traffic to non-Vice sites) — it trails others like The Huffington Post and BuzzFeed, which have 92 million and 80 million monthly uniques, respectively. Vox is a collection of niches; five of its sites reach fewer than 10 million uniques, and other than the publishing technology underlying them, there’s no obvious connection between all of them. That’s a limiting factor, as is the fact that Vox is predominately an ad-based business.
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Vox’s plan to increase revenue also involves doing more custom ad campaigns through a new native ad unit, Vox Creative, and high-impact display ads. Still, Vox has a relatively small footprint compared to more entrenched rivals. While it has set a new bar by being mobile-first and social distribution, others are now emulating that, and millennials have many other media options vying for their attention, Shlachter said.
“They need to be a little bit louder,” LaVecchia said. “Folks are still trying to gain an understanding of where they fit.”
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