Newsmax Is Politically And Digital-Strategy "Right"

12/15/2008

By Steve Smith

Looking for a next-gen publishing business model that makes more money online than offline? Talk to conservative information provider Newsmax Media, which is happy to celebrate making less than $5 million of its $25 million in revenue last year from the monthly print pub of that name. “Newsmax is a trophy and an anchor,” says ceo/president/editor-in-chief Chris Ruddy. “It bonds us with readers and it is a stable revenue stream. But our main focus is online.”

Ruddy’s Newsmax Online is a comprehensive digest of stories and links to items of interest to right-leaning readers. NEWSMAX.COM is not competing directly with major media so much as leveraging their stories. About 20% of the material is made by Newsmax editors, including some video feeds that attract up to 500,000 streams a month. Nevertheless, it has amassed an enormous unique user base of 4.4 million monthly unique visitors, more than doubling as a result of this political year.

But even NEWSMAX.COM isn’t the main cash cow. About half of the company revenues comes from online, but it is more than just selling a lot of banners against eyeballs. The real value of the large online footprint is in turning those readers into paying customers elsewhere in Newsmax‘s family of paid pubs or channeling them into e-mail alerts and letters that sell at premium rates.

The real secret sauce at Newsmax is that it takes a conservative political audience (generally middle age and upscale) and serves them with highly targeted fee-based print and online products that actually seem a little off-topic, such as Financial Intelligence Report and The Blaylock Wellness Report with about 50,000 subs each.

Ruddy says his team and content are following the real interests of the readers — conservative 45-year-olds and up who are concerned about country, security and their own financial and physical well-being. NEWSMAX.COM has even spun off a new URL, MONEYNEWS.COM.

Ruddy regards the main Web site as a successful way of aggregating audiences, not just content. “It is a way to meet your potential customer and make them a part of the family,” he says. “It is very database-driven, and that is what I think differentiates us. We have figured out that the value of the site is not someone looking at the site and getting a page view. The key to success is capturing readership.”

Newsmax tries to get the e-mail addresses and Zip Codes to discover users’ demographics, and then it advertises to them in e-mail alerts and sponsored messages. It has 2 million opted into the news alerts and a database of 300,000 subscribed to the various publications. “You will get a lot of advertising, and we will tell you this is a sponsor’s ad, and that keeps us in business,” says Ruddy.

Newsmax started in September 1998 with a 16-page “insider” newsletter for $30 per year. It soon found 10,000 subscribers, then 20,000, and morphed into a site and then print mag. Unallied with other media providers, it gained its audience mainly through word of mouth and Newsmax writers appearing on cable and broadcast tv talk shows. “Over time we build our list and remind them to visit NEWSMAX.COM, and so we start every month at a great advantage,” says Ruddy. “We have the lists.”

Yes, Newsmax adheres to conservative politics and serves an aging base, but its model anticipates an era when data, not content, may be king. “Old school” was about “monetizing content.” “New school” is going to be about building databases, shaping content in highly targeted ways, and then monetizing audiences.

Steve Smith (POPEYESMITH@COMCAST.NET) is digital media editor for min/min’s b2b/MINONLINE.COM. He posts regularly on The Minsider blog and directs the min Webinars. Smith also co-chairs the annual min Day Summit and as ceo of Roving Eyeball Inc., consults for a number of publishers in the digital space.