$0 to $525m in 6 years

How exactly did news business Axios become worth $525m in 6 years?

It’s a story of new approaches to editorial, advertising, marketing and business model that’s left legacy news publishers looking flat-footed and investors licking their lips.

Here’s a summary:

1/ Editorial connection. Engagement with readers is easy to talk about but takes time and effort. Making it happen means painstaking attention to detail, innovation and enthusiasm on a daily basis. Axios editors strike a great balance between entertainment and information.

2/ Clear writing. Attention is the new gold (or oil, as some say) and the Axios Smart Brevity writing system, though formulaic, bakes in not just reporting clarity but context and understanding. Readers no longer tolerate having their time wasted as they consume (maybe they never did but had nowhere else to go).

3/ Freemium business model. Newsletters and websites are free to all, covering 24 US cities with a further 8 coming soon. Income is from a mixture of advertising revenue and membership donations (more below).

4/ Relevant, modern advertising. No click bait, few banners. Ads are clearly labelled as an eternal message, and posts are written by staff writers in the Axios style, as “compelling brand narratives” to increase reader engagement. It works.

5/ Proof of concept. Reader engagement is validated by a believable 48% newsletter average open rate. List numbers are big, the city average said to be around 50,000.

6/ Community support. Although Axios is free, some readers who want local community journalism to thrive pay voluntarily, with contributions ranging from $50 to $500 a year. Axios Charlotte has 2,000 members paying $100,000 in annual donations.

7/ Marketing. The email lists grow using the usual social media, pass-along and SEO routes, with the added kicker being a rewards program offering free Axios branded merchandise like stickers, tote bags, hats, T-shirts and fleeces.

8/ Timing. The innovative editorial approach has gained traction and also benefits from winds of change in local news. Trust needs to be re-established and Axios is addressing the industry’s problem that only 5% of readers make it to the end of a news article and two-thirds leave a website before clicking on a single page.

9/ Potential. The $525m valuation set by the Cox Enterprises investment is higher than might be justified a $100m turnover business (mostly national newsletters). It's the upside in the local news division that has pushed it up, backed by Axios CEO Jim VandeHei's talk of launching in every US city.

Read the Champion Newsletters case study in full: www.andygriffiths.co.uk

#newsletters?#innovation?#journalism?#investment?#localnews?#newspapers

#advertising