Vox Media, which is launching a new venture called Project X that will be helmed by former Washington Post blogger Ezra Klein, says it wants to help Klein and his team reinvent the news by providing more context and background for news stories. But Vox is also going to have to reinvent something else at the same time: namely, advertising — since that appears to be the primary revenue model for the new site, according to recent interviews with Vox CEO Jim Bankoff.
Just to recap, Klein left the Post recently, after his pitch to run a standalone site funded by the Post was turned down (although Bankoff says the rumored amounts involved in this pitch — which some sources had reported would involve $10 million in funding and up to 35 staff — are “way off and way high”).
On Sunday, Klein announced that he would be building the new site as part of Vox, which has been expanding rapidly over the past year by adding staff to its technology-news site The Verge as well as by buying the Eater and Curbed blog networks. Vox closed a new round of funding last fall worth $40 million, and Bankoff said he isn’t planning to slow down any time soon. He told Ad Age:
“We’re already the fastest media company we know of in terms of growth. We have aspirations to grow even more quickly and even bigger.”
Vox says the future is display advertising
And how does Vox plan to fund all of this growth, apart from venture financing? According to Bankoff, the company is staking its future on developing new forms of advertising that perform better than the current crop of digital display ads — which bring in pennies per thousand for all but the largest and most credible media entities, and are continuing to decline in value thanks to pressure from the “programmatic” or algorithm-driven advertising offered by Google and other advertising networks.
Bankoff told Ad Age that he has no intention of “tricking anyone” with alternative forms of advertising such as sponsored content or “native” ads — which other new-media growth stories such as BuzzFeed have said they believe are a key part of the future of content. Instead, the Vox CEO said he is counting on Vox’s ability to produce better-quality display ads that will bring in more revenue than the standard banner or site takeover. As he described it:
“We really are in the process of reinventing what brand advertising can be on the web… we believe it can be engaging and beautiful and well integrated [and] fully transparent — we’re not trying to trick anyone like some native ads do… we can create high quality media products at large scale, and we can create high value brand advertising at scale as well.”
Custom advertising is a crowded market
One of the experiments that Vox Media has been working on are so-called “fishtank” ads, which take up the entire horizontal space devoted to a story, but show up partway through the story as a user is scrolling. But as Ad Age pointed out in a piece on the “fishtank” concept and other innovations, there is a hurdle for anyone like Vox to clear when it comes to trying to convince advertisers to develop a custom ad that they can’t re-use on some other site or app.
“Eye-catching as Vox’s new ads are, they face the same challenge that all publishers do when trying to convince advertisers and agencies to make custom ads that they can’t replicate across the web. AOL faced this problem with its media-rich Project Devil ad unit.”
Bankoff said the company will also be rolling out “several new types of ad products” over the next few months, and is putting more resources into its in-house creative services group, which works with brands to create custom ads. The Vox CEO told CNN’s Brian Stelter that he believes “premium brand advertising (as opposed to direct response oriented standard ad banners) is an enormous growth opportunity.” He also said Vox would be generating revenue through “experiential marketing and sponsorship models such as live events.”
With more and more media companies focusing on these same targets — high-quality brand advertising and live events — as a way of boosting their flagging online revenues, Vox is going to have to run twice as hard to stay ahead of the pack, regardless of how good Ezra Klein’s team is.
Post and thumbnail images courtesy of Shutterstock / Gl0ck and Vox Media