Colin Delany April 23, 2007

Reaching a Niche Audience or the Masses: What’s Politico.com’s Strategy?

Update: Politico.com’s publisher responds. See below.

The recent discussion about Politico.com’s traffic “stickiness” got me thinking about the different strategies behind building a niche audience vs. building a mass audience. What differentiates the two? First and formost, niche audiences are, well, niches — they’re groups of people drawn together by a common interest or set of interests. Because of their concentration, they can be valuable to advertisers trying to reach exactly that niche. Because of their relatively small size, they tend to be manageable, both in terms of the technology required to serve their needs and in terms of the time needed for customer service/reader contact.

Most money-making/popular blogs are niche sites, as are many more traditional online magazines and publications. Display ads (banners, blog ads) on niche sites that host a desirable audience are often carefully targeted to appeal to those exact readers and hence can command more money per ad impression. Sites usually supplement targeted ads with lower-cost run-of-site ads, though, if they have unfilled inventory. Google Ads and other context-sensitive text ads are a special category, since they’re linked to a page’s content and are theoretically always targeted, but the amounts site owners earn can vary immensely depending on the value of their niches and on how “clicky” their readers are.

Sites with mass audiences operate in an entirely different universe, since they’re generally making money off of their visitors in bulk. Think of YouTube or MySpace — lots of relatively untargeted run-of-site display ads, perhaps with limited targeting in certain niches, and also perhaps supplemented with Google Ads or other context-sensitive text ads. Most of these ads are relatively low-cost and bought in large numbers, since mass sites have huge inventory and make their money off of volume. In their world, scaleability is critical, both in terms of the site’s capacity to serve content to its audience and in terms of its ability to fill advertising space.

Many large sites live in a middle ground. Newspapers are a good example, since they’ll often host niche audiences (think of the Washington Post’s political section) along with a much broader general audience. Their niche advertising can be highly targeted and lucrative, but they’ll still run a lot of general ads to fill space. They manage to be both all things to all people AND targeted at the same time.

So, what about Politico.com? So far, judging from their advertising, the site seems to be adopting a niche strategy. Today, for instance, I can only find five ad campaigns running: one for drug company Novartus, one for a prescription benefit plan (also running in the Post’s political section), a CATO Institute ad for a book, an ad from the American Council of Life Insurers and an Environmental Defense ad on global warming. These are the sort of Sunday-morning-talk-show/Congress Daily advertisers that want to reach the political class, and I bet they get a package deal combining online ads and ads in the print version of Politico. No Google ads!

Interestingly, at Friday’s presentation in L.A., Politico editor Bill Nichols mentioned that one of the main reasons that they’d launched with a print edition rather than as a web-only publication was advertising revenue — Capitol Hill-focused print publications evidently command much higher ad rates (and better volume?) than their online equivalents. Having seen the price of a full-page Congress Daily ad (youch!), I’m not surprised, though I suspect that the print version also helped establish Politico’s credibility when it first launched, considering how traditional many congressmembers are in their media consumption.

So, returning to the question of traffic, Politico.com may only CARE about a targeted audience of political professionals and political junkies, since they can earn more per ad impression for targeted advertising. As I mentioned on Friday while playing Devil’s Advocate with my own article, their March ratio of six million page-views to two million visitors may not be a problem IF hidden in those figures are 20,000 or 50,000 perfectly targeted readers who keep returning over and over, supplemented by scads of people who hit the site once or twice and never come back. We’ll see what Bill says if he returns my note…

Update: Politico.com editor Bill Nichols forwarded my email to publisher Dan Kunitz, who kindly allowed me to reprint his response:

Colin,

Your email was forwarded to me by Bill Nichols.

The numbers are correct: 2M unique visitors and 6M total pageviews in
March.

My job – among other things – is to improve stickiness and add new
features to engage visitors and encourage repeat visits. We actually
just launched a new look and some new features this past weekend, and
there is more to follow. Your assumption is correct that we have a core
following of very regular visitors and a large number that come
following external links to individual stories. Nonetheless, traffic
has grown each month and we still have a lot of projects on the road map
that are yet to be released.

Hope this helps.

Dan Kunitz
Politico.com

cpd

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