The confounding simplicity of Industry Dive

The confounding simplicity of the online-only Industry Dive model, which now adds publications at the rate of ten a year,  is more strategic than it looks.

There is a  definite formula at work. The company founder has told interviewers that he knew from the beginning that there was an opportunity for advertising-based publications that reached an audience with significant purchasing power and that they would need to combine multiple titles to scale. They started with five.

The rest of the formula: Selection of a narrow B2B category targeting down the job title, with the right type of advertisers,  focus on building 10,000 emails, content marketing as the key revenue driver,  and no subscription sales.

The company was unafraid of taking on outside funding, selling shares to scale, and eventually acquiring a content marketing agency. Content creation – client-owned content – now accounts for 40% of revenues.

Before we dive into the model in more detail, here is the backstory:   Industry Dive,  the D.C.-based  ‘go-big-or-go-home’ online publisher, specializes in hyper-niche B2B news.  Dive launched with $900,000 in private funding and five publications in 2012, selling off a stake in 2019 and continued adding titles until 26 publications produced more than $100 million in revenues by 2022. Their business model was entirely based on advertising, with no live events, print ads, or subscription sales. The company sold to Informa, a UK-based B2B events company, for about $530 million in 2022.

As industry watcher Simon Owens noted, “That would make Industry Dive’s value at over two Vices and five BuzzFeeds.”

Led by the same CEO,  Sean Griffey, Dive has launched ten more publications since the sale, targeting niches within the sectors where Informa produces an event. In the time it took to write this article, Dive had added a title.

To give you an idea of what the pace of new start-ups looks like, here is a list of new titles:  ESG Dive, covering government regulation for corporations subject to environmental, social, and other legislative accountability; Agriculture Dive, Automotive Dive; Facilities Dive, Hotel Dive,  CFO Dive, Packaging Dive, and Manufacturing dive. 

Retail Dive launched  DTC Dive, a newsletter aimed at direct-to-consumer businesses, and  Banking Dive produced a new newsletter on Fintech. The latest, CX Dive, targeting an audience of Customer Experience professionals, will send a newsletter to subscribers in November.

The “simple” formula 

So here’s the business model: The company produces a daily email newsletter. They sell one exclusive newsletter sponsorship per week, which has more revenue than website banner ads. In fact, banner ads on the website only account for 4% of revenues, a number that should give other online publishers pause.  The rest of the revenue  – an average of $3.8 million per online publication – comes from content creation and marketing.

While industry watchers often laud Griffey about the simplicity of the model,  it is not as simple as it looks.

Take the audience strategy. In reality,  all the publications aim at niches within niches: People with a particular job with corporate purchasing power.  The sectors selected also require a suitable advertising base.

Griffey likes to say that he decided not to sell subscriptions because it would   “distract the whole company.”

He may also mean that it would work at cross purposes with the “virtuous cycle” that propels the business model: Every sponsored content unit has an email opt-in. The email opt-in supports all advertiser products, including sponsored content opt-in forms. The sponsored content produces more emails. And so on.

Industry Dive itself has also never produced live events. Griffey merely notes,  “I’m not an event person.” This may also a question of resources – how do you add multiple publications and events at a  rate of 2+ per year? How about ten new titles a year?

The decision also paid off during the pandemic. When advertisers shifted spending at scale from conferences to other forms of marketing, Industry Dive revenues grew by 40%. In 2020, the company raised another round and acquired a content marketing company in San Francisco, which it renamed StudioID. This acquisition has also allowed it to scale faster.

The acquisition by Informa was strategically ideal;  Informa had no publications, and Dive had no events. By combining resources, Dive launches each new title with an instant email list, and every Informa event can create an extra revenue stream. Remember that the average revenues of a title topped out at 3.8 million, and they reported an EBITDA of 25%.

The bare-bones start-up

There is much to be learned from how Industry Dive launches in a new B2B niche, such as hotels.  In an August 2023 interview on Simon Owen’s YouTube channel, Griffey opened up about what goes into a launch. 

In spite of the fact that they have no experience in the area,  Dive targets the audience persona  “down to the job title” that makes significant purchasing decisions, Griffey said.

Then, the Dive team finds trends those people care about most.”We are very careful about what trends we cover, and we absolutely want to own those trends,” he said.

Every start-up begins with two employees, an editor and a writer,  who produce enough relevant content to own the trends within the niche.

Editorial, disciplined

Sustainability is expected within the first year and a half. After that, each of the publications is expected to sustain itself, without contributions from headquarters, Griffey told the video’s attendees.  

When the editorial team requests more resources like other, larger Dive publications, he tells them, “We add to editorial as the audience grows.”

“I did not want to have one publication support ten other publications,” he said.   “That’s great until the winner has a bad year.”

Wanted: A  robust advertising base 

In selecting the niche, Dive also assesses the strength of the advertising base and the purchasing process.  Does the audience need to stay on top of industry information helpfully provided by Dive’s content sponsors? A mistake in this area can be costly.

Griffey said that one start-up that never reached sustainability was a magazine for residential builders. The team failed to recognize how builders make purchases.  In most cases, he said, they are on the job site carrying shovels, not reading industry magazines for tips on new technology.  The publication was closed.

Ironically, Waste Dive, the first online publication media watchers often used as an example of the highly profitable  “unsexy” categories Industry Dive usually selects, is also “not a good example” of the model, Griffey said. Waste managers do not have to “keep up” with trends.

“Anytime they have a problem, they literally dig a bigger hole,” he said. “you don’t need technology solutions to solve your problems. You need a backhoe.

”It doesn’t really fit our model.”  In fact, Waste Dive is not only the oldest but also the smallest Dive.  However, it  a thriving community, he said, and clearly holds a nostalgic place in Griffey’s entrepreneurial heart.

Getting to 10,000 emails 

In an interview with consultant Eric Shanfelt,  head of  Nearview Media, a leading consult firm for niche media company, Griffey said email is the core of the company strategy.

Shanfelt, who has participated in several successful media exits, concurs that the most crucial job of the website is to capture an email.

While other publishers were chasing “the shiny new object,” three things about email appealed to Griffey: “It’s a platform we own. It is a push platform; third, it comes with a substantial third-party data set. ”

His publications can utilize but are not dependent upon Google or social media to reach their audiences because once the list is built or acquired, they can deliver the news directly.

The initial priority at each start-up is to build a list of at least 10,000 emails.  Less than that number, Griffey said,”It is not worth the advertisers’ time to create an ad.”

“They’ll just say come back when you have 10,00 to 20,000. It happens all the time.”

Another attention-getting number is the 40,000 subscriber mark;  for some reason, 30,000 subscribers fail to impress.

There is still, however, “no easy way to grow email. If there were, no one would need us,” Griffey said.

“It’s hand-to-hand combat.”

They have used a variety of social media channels over the years to attract subscribers, including the once valuable LinkedIn Groups, the once relatively inexpensive Facebook ads, and Twitter.  He complained that marketers kill every good marketing channel.

“Everyone  is going to catch on …and then it stops working.”

Today, he still uses paid channels to build email, but the website is the top source of email organic conversions.  There are typically five registration attempts when a visitor reads through an article. The highest conversions right now are coming from the capture form at the bottom of the page.

The focus on email has proved prescient as social media continues to multiply and shift in popularity and as fake news on social media has become a ubiquitous problem. The most direct way to reach an online audience with a trusted brand is by email.

As Peter Birh noted in an article on Medium, Welcome to the post-social media era,  “We’re headed into a social media winter. The post-social era has begun.”

Doubling down on content marketing 

Griffey says that the email data showing what the audience is interested in is critical to the selling strategy.

When creating content for advertisers, teams can take a more consultative, rather than transactional, approach because they often have better data on what kinds of content will be necessary to decision-makers than their advertisers do.

The company’s content marketing offerings are also simplified into three products.

StudioID creates Playbooks, webinars, and Trendlines tailored to audience interests and promoted by the newsletters.

However, the agency is now exploiting the demand for client-owned content by creating content channels for them, including newsletters and website blogs. Griffey noted in the interview with Owens that every company today is a media company, but not all have the right skillsets.

Content creation, in fact, now accounts for 40% of revenues, he said, with some multi-year contracts bringing in $500,000 plus in revenues.

Virtuous cycles 

The revenue model is also strategic in the way the products work together.

When visitors sign up for any of the webinars, playbooks, or “Trendlines”  that Dive creates for sponsors,  they have to opt-in to the email. Sponsors receive the list of these super-engaged audiences with millions in purchasing power – and Dive’s email list is continually recharged. Everybody wins.

All the sponsored content is housed in a “Library” on each Dive website, so the sponsor has an evergreen presence, and the opt-in forms continue to perform.  Here’s the library at  CyberSecurityDive, whose own content is also largey produced by StudioID:

The total Dive email list, which passed 2.5 million in 2023 –  powers DiveWire, a DIY portal that sells press release distribution,  guaranteeing “instant distribution” to an audience that totals up to 11 million business leaders.

A prompt to post a press release leads to online check-out, with a price tag of  $239 to $269 for three to 7 credits, includes newsletter distribution,  “lifetime” publication on the website, and a rotation in a sidebar on the website.  While not guaranteed, advertisers can assume that editors will at least look at the press releases coming in.

We counted three to five press releases a month for CyberSecurityDive alone.  Then we multiplied  $250 by 4 posts a month, by 12 months and  36 magazines, and came up with an extra $449,800  a year in incremental revenues, with virtually no cost of sales.

The press releases are hosted in a unique channel with a link in the top navigation bar.

Back to the virtuous cycle: Advertisers buying press releases are leads for high-dollar sales of sponsored content that StudioID creates – the ones that can be worth $500,000 to $1,000,000 on two-year contracts.

Finally, advertisers can purchase a PDF of any article Dive, including the editorial rights to print, mail, use on the website or take with them to conferences.

After reading the promotion carefully, we realized that  Industry Dive still does not have to print anything. It is selling a PDF of content it has already created for $500.

Learning from DIVE 

So, what lessons should niche publishers take away from the extraordinary success of the Dive model?