Investments in journalism, algorithms has Axel Springer’s five-year-old aggregator app Upday up over 30% in ad revenue

“The combination of having trusted journalists on one side — I don’t know an aggregator investing so much in journalists — and technical algorithms which aggregate personal tastes on the other makes us so strong,” said CEO Peter Würtenberger.

As people have craved trusted sources through the rampant news cycle of the past four months and ongoing coronavirus crisis, the platform has established itself as a preferred destination with its own users and third-party platforms: More than 90% of its users said Upday is one of the main platforms they get coronavirus news from, 50% said it is the main platform for this purpose (according to internal research). For the last few months, Facebook, keen to look like it’s working with credible publishing sources, has paid Upday journalists to populate its Coronavirus Information Center.

Germany accounts for less than a quarter of revenues, the U.K. is its second-largest market followed by France, Italy and Spain. In the U.S., 3% of people use Upday in a given week, according to Reuters Digital News Report, (Google News and Apple News command 17% and 11% of the U.S. market respectively). But there are other competitors springing up. Six months ago, publisher News Corp launched its own aggregator, Knewz, and has grown to nearly 5 million monthly site uniques according to the platform.

Upday has above 25 million monthly active users globally, per the company’s stats, usually netting 11 million daily visitors. During the heights of the coronavirus crisis in Europe between March and May, daily visitors tripled. 

App analytics firm Sensor Tower doesn’t track the Samsung app ecosystem but estimates Upday has been installed approximately 1.3 million times globally from Google Play, 24% from Germany alone. New installs of the app from Google Play were up nearly 76% year over year in the first half of 2020.

Upday, now 140 people strong, reached profitability in 2018 generating revenues over €10 million ($13 million). In 2019, annual revenue grew by 50%, so far this year ad revenue has grown by over 30% compared with the first six months of last year, the company said.

The majority of its revenue comes from programmatic ad sales traded on the open exchange from inventory sold within each article which are displayed in card-like formats. Since last year it’s had a dedicated team laser-focused on managing yield, resetting floor prices, introducing new formats and managing placement based on campaign objectives. It views future revenue growth in open exchange, although does sell some campaigns direct and through private marketplaces. Digital trading also helps now that it sells in 34 countries across 28 languages, with eight editorial hubs in Europe. 

In May, the platform also launched an affiliate strand, Upday Choice, a daily changing portfolio of recommended products, after seeing the boom in e-commerce spurred by the coronavirus. Early details are scant but revenue contributes to single-digit percentage to its total revenue, the company said. 

Some publishers choose to release stories exclusively with Upday. One global news publisher released one of its paywalled articles on Upday, making it freely available, several hours before opening it up on its own and other platforms. The story ran one recent Saturday morning as the lead story on Upday U.K., leading to 66,000 clicks and a click-through rate of 15.6%, according to Upday. A story at the top of its news feed typically gets 10% click-through rate back to the publisher, said Würtenberger.

Analytics platform Parse.ly network data shows Upday referral for mobile and tablet traffic is seeing an average of 74% month-on-month growth, but in aggregate, that’s pretty slim as referral platforms go.

“Double-digit growth like this is common with platforms that are small,” said Kelsey Arendt, data insights lead at Parse.ly. “While it’s important that publishers and platforms (and venture capitalists for those platforms) don’t get distracted by the law of large numbers, these stats are a positive signal. Unlike search or social domains, the aggregator category is increasingly diverse and nimble enough to meet the needs of consumers. Upday may be small, but it has nowhere to go but up.”

The platform has big ambitions of international growth and more native video operations, helped by Samsung’s recent investment. As of two weeks ago, it’s integrated on Samsung browsers to increase its audience pool and Würtenberger expects this to account for more than 10% of its traffic.

Since Apple’s crackdown on in-app tracking by making IDFA opt-in last month, tighter data policies could put off some advertisers from spending in Apple’s ecosystem, where Google Play and Samsung could pick up market share. 

“The opportunity for Upday is attracting more advertising and taking a bigger part of the revenue pie,” said Würtenberger.