Refreshing The Verge: how does this thing make money, anyway?

The Verge turns five on November 1st, and we’re in the process of refreshing our entire brand for the next five years. In Refreshing The Verge, we’ll be looking at how that refresh process works, and what it’s like to adapt a brand like The Verge to a world where media platforms have become dominant.

In the five years since we launched The Verge, a lot of things have changed about our brand and the media industry it operates in: our mission has expanded to cover science, culture, and transportation, our ambitions in video have gone from a sideline to the most important driver of growth, and we’ve moved from a single all-powerful desktop web experience to a distributed model that finds our audiences on a wide variety of mobile platforms. Things are getting pretty complicated around here.

If you’ve been reading or watching The Verge for these past five years, you’ve probably noticed some of these changes in what we make and how we publish it. But what most people don’t see is that the revenue side of Vox Media has also gotten vastly more sophisticated in the past five years, with just as much reliance on technology, data, and distribution intelligence as anything we do on the editorial side. We build just as much tech to distribute and optimize our advertising content as we do to create and distribute beautiful stories for our editorial brands, and it’s all just as deeply interconnected with the shift to platforms.

Our editorial teams are independent of our revenue teams at Vox Media, so to figure out how this all works, I asked Lindsay Nelson, Vox Media’s global head of brand strategy and marketing, to spend some time explaining how a brand like The Verge makes money in the modern marketplace. And Joe Alicata and Megan Walton, Vox Media’s VP and executive director of revenue products, walked me through how the technology side of our revenue puzzle has come together in a new platform called Concert.

The big shift to platforms might be changing how the media works everyday, but Vox Media has organized itself around that future — and in a way that leaves The Verge free to make great journalism for our audiences wherever they are.

"In 2011, the revenue model for most digital media companies was fairly simple," says Lindsay. "We sold display media against Verge content, with our ad products being more sophisticated than most. For advertisers, the value proposition was a combination of content adjacency with a premium, influential audience consuming relevant content. These ads were sold rotationally, as part of a video or content package sponsorship, or on a single day with a homepage takeover."

Basically, what most people think of as our business model — putting ads on web pages — has split into multiple complex revenue lines at Vox Media like branded content, platform publishing, experiential events, Facebook Live integrations, newsletters, podcasts, and more over the past five years. You can already see this diversification in action across the various brands in the Vox Media family: Recode runs the peerless Code Conference series, and Vox.com just held its first Vox Conversations event. Eater’s partnership game is incredible — just look at the tremendous MOFAD City series. The list goes on and on.

"Just like the programming experience, the advertising opportunity is bespoke for each platform," says Lindsay. "We need to make it easy for our audience to find and consume content wherever they prefer, and we need to make it easy for our advertisers to reach these people in ways that are seamless and organic to the consumer experience."

Let’s start with the basics, though: how ads and branded content on our site have evolved, and how ads on other platforms like Facebook Instant Articles and Google AMP work for The Verge. We still have a big and growing audience on the web, but our audiences on those two platforms are growing fast. I have lots of feelings about Instant Articles, AMP, and the future of the web, but from the revenue side, these new platforms are an opportunity our advertising tech is set up to take advantage of.

If you’re a deep Verge nerd, you might know that we create and publish our stories on a platform called Chorus, which is Vox Media’s proprietary media stack. Chorus lets us do all kinds of interesting and dynamic things, and we’re actually moving to a powerful new version of Chorus as we launch our new design. But Vox Media has another equally powerful platform on the revenue side: Hymnal.

When we started The Verge in 2011, we explicitly decided to avoid certain kinds of advertising, and that’s still true today. "We don’t sell popups, roadblocks, interstitials, or anything that stops users or requires user interactions," says Joe. "We weren’t happy with the tools, and we felt standard advertising units weren’t telling effective stories for brands, and we wanted to change that."

"We set out to fix shitty advertising on the internet," says Megan. "We care about the experience and our users, not just making money. We don’t want to serve ads people hate — we want to serve ads people are genuinely interested in." This instinct has since been validated by independent research, which shows ads like Vox Media’s scrolling Athena unit are more respectful of users and perform better.

Making better ads was at first a painstakingly manual process; in 2013 the Vox Media revenue team built 90 custom ad units. That’s also the year our product team built Hymnal, which lets our teams build and optimize multiple ad units incredibly quickly. So far in 2016, that same team has produced seven thousand ad units using Hymnal.

And those units optimize themselves as users interact with them — a system called Creative Intelligence measures interactions and dynamically swaps in different elements like background colors, photos, and language to make the ads more effective. "It’s not personalized, it’s just optimized," says Joe. "We push in different headlines, background images, and calls to action, and the platform makes decisions on what pieces to serve." (The Verge editorial team uses a version of the same tech to A/B test different headlines and photos, which you may have noticed.) Creative Intelligence has yielded surprising results — purple images are most likely to get a click, for instance.

Importantly, ads built in Hymnal are some of the few that also work in Facebook Instant Articles and Google AMP pages. "We’re part of the adtech and revenue publishing working groups for AMP, and helped develop the AMP ad guidelines for all publishers," says Megan. Adds Joe: "We worked with Facebook to incorporate these ad units and capabilities in Instant Articles. We’ve embraced new formats, which are the way our audience wants to consume our brands, and it all makes money in the way that our current formats do."

In addition to display ads, Vox Media also runs Vox Creative, which creates branded content using the same storytelling tools as our editorial brands. Lindsay thinks that part of the media industry is due for some dramatic change. "In its current state content marketing is basically like loose-leaf magazine inserts folded into a paper airplane and shot into a mob of anonymous people," she adds. "Sometimes you might even get lucky and have a video go viral, but to what end?" Her group is now focused on taking what we’ve learned building our editorial brands over the past five years and helping our advertising partners develop their own communities around branded content.

So we make better and more effective ads. Great. But we have to put them in all the places people are reading The Verge — and the number of platforms we find our audiences on is getting bigger, more fragmented, and more chaotic than ever.

So earlier this year Joe and his team built another powerful tech product to solve that problem, called Concert. Concert distributes ads, branded content, and video across Vox Media, NBCUniversal, and a number of other publishers. You can already see Concert in action on The Verge and other sites — it’s that little C-shaped logo above our ads.

And most importantly, Concert works across multiple platforms, including Facebook Instant Articles and Google AMP. "Concert isn’t just the future of display advertising, it’s the future of content distribution," says Joe. So we don’t have to worry about every platform fragmenting The Verge’s audience: virtually everywhere you find our stories, Concert is there to deliver high-quality, respectful advertising and branded content.

And it's working: Concert is only 10 months old, but our CEO Jim Bankoff tells me that Concert is on pace to be an eight-figure business next year.

"We spend a lot of time working with and embracing these partners — Facebook and Google are amazing partners of ours," says Joe. "Our jobs are probably 60 percent partner engagement now. It wasn't that way when The Verge started. The places where our editorial teams want to tell stories to reach the largest audience, it's just as important for us to make money there."

But written stories are just part of what The Verge makes — and only part of our revenue mix. We also make a ton of video, and monetizing that video is complicated and ever-changing, says Lindsay.

"A 30-second sound-off video on Facebook is not necessarily the same thing as a 60-minute drama watched on a big television screen," she says. "We need to be careful not to conflate screen size with platform with type of video content — not all video is created or consumed or monetized equally. The commitment, the level of distraction and attention, the perceived quality and value varies."

We’ve learned a lot about video on the editorial side of The Verge over the past five years — our video audiences on YouTube and Facebook are both growing fast, but the kinds of videos that work on YouTube are very different than the kinds that work on Facebook. We use a lot of the same footage and convey the same editorial points, but we create very different video products for very different video platforms.

It’s going to be the same with video advertising, says Lindsay. "We can't port the 30 second commercial to every video consumption experience. We have to crack the short-form video advertising format." Over the next year, you’ll see us experiment with a bunch of different ideas around video advertising, all in ways that protect the editorial independence of The Verge. It’s probably going to get a little wacky, but that’s why we’re here, isn’t it?

Lindsay’s also interested in new ways to reach audiences as mobile platforms become even more dominant. "I’m bullish on Slack integrations," she says. "Email and text will become even more important for media companies. Audio consumption will rise, but in interesting ways like the Amazon Echo. I think we will continue to see incredible fragmentation, which means reaching more people with less control. It also means added complexity, nuanced best practices, and diversified audiences."

"The industry changes in monthly increments," she adds. "Everyone is making it up as we go, including the places where people consume content. In five more years there will be more fragmentation, more platforms, more ways to think about creating content, consuming it, and of course monetizing it. Vox Media, as a company, is organized for that future."

All of which is to say: we’ve moved completely beyond putting banner ads on web pages and just counting page views to keep The Verge going. Tomorrow we’re going to unveil a new site built on a new design system that will extend to our ambitions in video, events, merch, and even television, but at the core of it all is something very simple: the future is coming, and we’re going to make sure The Verge is there to capture just how strange it really is.