The three-year-old publisher, Axios, looks set to remain profitable this year, despite difficult market conditions for digital, ad-dependent sites.
Here, we explore what sets Axios apart. Why are their newsletters driving the business and how have they continued launching products throughout the year?
Smart launch, smart growth
Founded by Politico veterans Mike Allen, Roy Schwartz, and Jim VandeHei in 2016, Axios was launched based on a shared belief that the media was broken. “Stories are too long or too boring. Websites are a maddening mess,” their manifesto stated. “The audiences and the advertisers alike are too often afterthoughts.”
Their idea was to deliver the clearest, smartest, and most trustworthy experience for audiences and advertisers. This led to the development of their signature ‘smart brevity’ style: short paragraphs broken up by bullet points, perfect for skimming.
The publisher started out with a bang, securing an interview with Trump on their first day. “We’re probably the only not-yet-launched outlet to ever get a presidential interview,” Schwartz told TheWrap.
Axios has continued to grow as a household name in the run-up to the election. A controversial viral interview between reporter Jonathan Swan and President Trump on HBO turned Swan’s disbelieving facial expressions into a global meme.
Now, they have 1.4 million individual newsletter subscribers across their portfolio, up from 750,000 a year ago.
Profitable in a pandemic
Since launching, Axios has gone from strength to strength. According to the Wall Street Journal, they are on track to make $58 million in revenue in 2020. That’s up 30% on the year before. This is in line with pre-pandemic projections.
This also demonstrates the resilience of their sponsored newsletter business. Companies like Comcast Corp., Wells Fargo & Co, and Koch Industries have paid for slots across their 21+ newsletters, covering topics from cybersecurity to work, markets and politics. Single sponsorship packages can be worth millions of dollars.
The income from newsletter sponsorship now contributes more than 50% of the company’s overall revenue. They reportedly send out over 4 million newsletters per day.
“Brands are looking to tell their story, and quite simply, our platform just really does a much better job than banner advertising or long-form branded content that people don’t click on,” co-founder Roy Schwartz told Vanity Fair in 2019. “Every single one of our clients has renewed with us. That’s unprecedented.”
People familiar with the site’s finances say that Axios came close to breaking even in 2018, and turned a small profit last year. Despite a tough year for many digital publishers, they are on track to remain profitable in 2020.
The company has also been beta-testing a subscription model, although this is yet to launch. However, this would not be a mass-market product, but one targeted at high-value business leaders. It could cost up to $10,000, Jim VanderHei told a conference in 2019.
App launches
The pandemic has certainly not slowed the publisher down. In April, they launched their first native app ahead of schedule to meet an increase in reader demand. The app’s topics are organized into channels to reflect Axios’ newsletter offerings.
Still, with 75% of Axios’ web traffic coming from mobile devices, there was a need to develop something specifically for those readers. In turn, this allowed them to offer more types of content such as video and audio.
“So much of our audience is on mobile right now. Without a native mobile app, it’s difficult for people to stay on top of Axios throughout the day, outside of the newsletters,” Chief Product Officer Mike Berkley said.
Existing newsletter ad campaigns feature within the app. There are opportunities for companies to buy app-specific placements such as feed sponsorship. Additionally, there is the option to put ads in non-newsletter channels such as ‘Top News’.
In June, Axios launched a flagship daily podcast. ‘Axios Today’ is focused on their core politics and economics coverage and applies the same principles of brevity. The 10-minute episodes aim to combine “the intelligence of public radio and the speed of commercial radio”. They secured two sponsors, Chevron and Goldman Sachs, and an experienced radio host Niala Boodhoo for the podcast’s debut.
Taking on local news
More recently, Axios announced that it is launching daily local newsletters “to help readers get smarter, faster about their hometowns.” The first four will be in Denver, Des Moines, Minneapolis, and Tampa. Two dedicated local reporters in each area will bring Axios’ signature ‘Smart Brevity’ style to residents.
Local news has proved challenging for many outlets to monetize in digital, following the widespread collapse of classified ads. Local audiences don’t offer the scale needed to be attractive to Axios’ usual large corporate advertisers. It will be interesting to see how Axios tests ways to generate revenue for these local newsletters.
