Content aggregation drives viewers, but can it drive profits?

The news last week that the Huffington Post surpassed the Washington Post and LA Times in online visitors affirmed what many media professionals already knew: There’s real business in aggregation.

Whether there are real profits as well remains to be seen. In an interview with PaidContent, Huffington Post CEO Eric Hippeau said the company’s current focus is more on investing in growth than taking profits. “We’re going to continue to invest,” he told PaidContent. “At the same time, we want to make sure the earlier services we produce become profitable. That’s doable and I’m very confident we’ll get there.” 

Other aggregation-focused publishers are already there, albeit on a smaller scale. Watershed Publishing, for example, has created a profitable business around trade publications in three sectors: marketing/advertising, retail/e-commerce and defense.

'Value-added aggregation'

The publications – MarketingVOX.com, MarketingCharts.com, MediaBuyerPlanner.com, Retailerdaily.com, and Defenseindustrydaily.com – have built their respective audiences through what Watershed CEO Olivier Travers calls “value-added aggregation.”

“We aggregate more than we do original reporting,” he says. While the company does recruit writers and editors with journalism experience, the staff (made up primarily of contractors) focuses more on summarizing and contextualizing third-party stories than creating their own.

“We leverage what’s already out there, recognizing there might be more content out there than our audience might be able to parse through,” says Travers. “The added value is in filtering out a lot that is irrelevant or outdated. We don’t go after every headline. We’re trying to contextualize and put things in more of a historical framework.”

Watershed’s selling proposition to advertisers is its narrowly focused audience. While the sites’ traffic numbers are generally healthy – both MarketingVOX and MarketingCharts boast more than 100,000 monthly unique visitors, according to Compete.com – Travers says the emphasis now is on engagement.

“The top-line number of uniques is not something I obsessively look at for growth,” he explains. “I’m more concerned about trying to increase the behavior that leads to more repeat visits per month. Then I can put that in front of advertisers.”

A paid model for aggregated content

Travers maintains that increased engagement with a narrow target audience can also open up opportunities for paid content – even if that content is someone else’s intellectual property. Defense Industry Daily, for example, is selling monthly ($49.95), quarterly ($145) and annual ($550) subscriptions to Defense Industry Insider, a “knowledge base” of reports, chronologies and analyses of government defense programs. 

“Technically, that information is available somewhere on the Web,” says Travers. “But we can summarize and put it in context for you. We’re talking about defense contracts with billions of dollars at stake. What’s the value of getting that information to you in time for your next business development meeting?”

The success of Defense Industry Insider – Travers says it accounts for between 10-15% of the company’s revenues – has convinced Watershed to test additional paid models for its other publications. Travers admits that a marketing audience, for example, is likely to be tougher to sell to than defense contractors, who are more accustomed to paying for highly specialized content.

“We want more non-advertising based revenue streams,” says Travers. “We have growing confidence that we can do more there.”

Travers’ advice for publications looking to build a business around aggregated content?

“Narrow things down, make them more relevant,” he says. “There’s not enough differentiation in media. And there’s not a lot of value in seeing the same rewritten press release in 200 sites.”