Valuing the Business Insider audience

Michael Wolff of USA Today examines the value of Business Insider.

Wolff writes, “But the actual meaning and value of large digital audiences remain unclear. Only a small percentage of Business Insider’s traffic actually seeks it out and regards it as a worthy destination and a source with particular brand authority. Most other readers land on a Business Insider article because of search-engine results, or because of an engaging — tabloid-style — headline in a Facebook feed and other social-media promotions, which generate 30% of Business Insider’s traffic.

“In 2013, BI made more than $19 million, most of it selling this traffic to advertisers. It said it was profitable in the fourth quarter (usually a good quarter) and that it won’t be profitable in 2014.

“It has to produce lots of content — quantity tending to trump quality — to realize these traffic goals. But Business Insider is seeking to be not just a content mill (a site that uses bulk amounts of low-level content to attract mass traffic) but also a significant new brand, which adds costs. It has hired, if not quite a seasoned staff, young journalists with at least a bit of experience: about 70 of them now, costing upwards of $15 million a year. Overhead and other traffic-acquisition costs push expenditures well past $19 million. In other words, it costs more to get traffic than what you can sell it for.”

Read more here.