Some digital media startups aspire to reach every millennial with their content. VinePair just wants to reach the millennials who care about wine and spirits.
Focusing on a niche audience – and the advertisers and products that appeal to it – is why the site turned a profit this year for the first time, according to co-founder and CEO Adam Teeter.
Five years ago, Teeter and Joshua Malin launched VinePair, a self-funded website that takes an unpretentious look at wine. After their initial $30,000 investment, the partners have raised $2 million in funding through two seed rounds with investors that include Gary Vaynerchuk and Joanne Wilson, the angel investor behind Food52 and Eater.
But to keep telling stories “through the lens of the glass,” VinePair is shutting the door to more funding.
“We will never raise again,” Teeter said from his office packed with boxes of wine and products from VinePair’s commerce ventures.
Though the site grew from 500,000 unique visitors in its first year to 3.2 million readers in May, VinePair doesn’t expect its steep growth curve to continue. Taking on further investment would force it to dilute its coverage.
“I’ve seen explosive valuations in the media space, and I don’t think they’re realistic,” Teeter said. “Because they’ve raised too much and need to give investors a 10X valuation, they are chasing traffic that’s nonsustainable and basically fake.”
Instead of expanding and losing what drew readers in the first place, VinePair will write about adjacent topics, but only as they relate to drinking.
On the revenue side, VinePair likewise aims to go deeper, not broader. Its success with sponsored content has led to agency-like relationships with some clients. On the ecommerce side, it’s experimenting with selling trips, not just cheese plates and wine glasses.
VinePair may dabble in other kind of buzzes, but not within VinePair.com. It piloted Janest.com, a site about cannabis, and it’s considering writing about coffee.
Teeter talked to AdExchanger about how he’s cultivating VinePair to succeed in the tricky terroir of digital media.
AdExchanger: Do niche publishers have a better shot at revenue diversification than others?
ADAM TEETER: When you’re a publisher that’s focused on one thing – wine – and then you start writing about entertaining, travel, you become Yahoo. I don’t want to become Yahoo. If we happen to write a travel story and it goes viral, and we write about more travel, our readers will say, “What is this publication anymore?”
I think we’ve seen that happen as people have looked for new ways to grow. I want VinePair to be the most influential site in the country about wine.
You teach a class about the future of digital media at Columbia Journalism School. How are your students thinking about that future?
When I started teaching there five years ago, I would ask, “You’re being paid more. Would you write sponsored content?” No one in my classes would raise their hands. Now all of them do. They realize that’s the game. By writing sponsored content, you become more invaluable to the publication because you help them make revenue.
What does programmatic advertising mean to VinePair?
Programmatic means a guaranteed monetary stream that allows us to take some risks. Having a guaranteed average of X dollars a month [that] we can rely on with programmatic means we can make investments in other parts of the business.
Do you see much demand for display advertising sold directly?
No, only packaged together with sponsored content, throwing in 500,000 impressions gratis as part of the buy. For some larger companies, yes. We got an RFP recently for a big liquor brand that was all display, and I was surprised, though I wonder if that’s bigger agencies coming around to sponsored content more slowly, especially with recording measurement to the client.
What are you doing with sponsored content?
We are hyperfocused. We specialize in advertisers who are interested in reaching influencers in wine, beer and spirits, as well as hotels, airlines and credit card companies. We are not trying to go after mass CPG brands or taking any money that we can’t authentically create campaigns for. And we don’t put money behind our sponsored content to deliver results. Our No. 4 story of the week last week was a piece of sponsored content about Italian wine for a client that wanted to promote Italian wine and tourism.
Is that why you say you have an 83% client retention rate?
It could be that. Also, we never delete the content, because it’s good content. Thanks to how influential our site is, the articles continue to deliver.
We also don’t have a traditional pricing sheet. You come to us with a budget, and we will create the best campaign possible within your parameters. That’s also why the business evolved and we started acting as the agency of record for some of our clients. They said that the content we created was better than what the agency did.
You have a background in audience development. What does it mean to lead a company knowing all the tricks out there to grow audience?
Because we know the tricks, we know when they are tricks and when they lead to long-term audience growth.
Our three largest drivers of traffic are Facebook, search and Apple News. Our email newsletter has almost 300,000 people and a 25% open rate.
We have been cautious about being all over Facebook because even when people read the article, they don’t know what publisher wrote it. We want you to know VinePair.
On search, we are in the top three for terms like “best wine,” “best bourbon,” “best cocktails.” Our editor-in-chief saw someone at Whole Foods last weekend buying beer while looking at our article.
We are trying to make Pinterest work – we get a lot of saves for our buying guides and traffic guides. Twitter drives nothing, even when a huge person tweets your story.
Why is VinePair profitable?
Relying on advertising revenue alone is not sustainable. We are very lucky in that we are a lifestyle platform that is focused on drinking, so we are aligned to give you products you could buy. We don’t sell alcohol. We never will. Our model is Food52: We are going to do advertising and, secondarily, we’ll go into commerce.
Why no wine club?
Regulationwise, [selling wine online] is the worst. You have to pay for a signature. Wine bottles are heavy. Startups and wine clubs will try it, but you have to play a lot of tricks to sell alcohol online and make a profit. You have to sell $80 to $100 bottles or closeouts or open a winery and bottle the wine yourself, which is what Winc is doing. We see more potential in other sides of the business.
We had a club approach us, and we did it for one and a half months. I didn’t like the wines. If our readers are buying wine from us, it has to be amazing.
What else have you tried to sell to readers?
Right now we are doing a reader trip to Barcelona. For 20 people, $2,500 a piece, to two different wine regions, where you travel with our editor-in-chief and me. We’ll make $10,000 from that trip.
Any affiliate links?
We don’t play in the affiliate-link world. How many publishers made lists during Amazon Prime Day? We didn’t. They basically gave Amazon a free ad on the internet for a few days. You can’t tell me that 6% affiliate fees are going to support your business, unless you’re The Wirecutter. There’s only one, and The New York Times was smart and bought them.
Alcohol advertising comes with restrictions and regulations. How does that affect your advertising business?
The advantage we have is that 95% of traffic is over the age of 21. The alcohol business has set the barometer at 70% over 21, which is why they don’t want to play with Snapchat and why we are not on Snapchat. I think it’s only risky for people who create content that celebrates overindulgence. We don’t joke about getting blacked out, for example, and that’s where advertisers get nervous.
What challenges are ahead?
Making sure advertisers understand it’s time to move from print. You don’t know if the ad isn’t performing well in print. We can change ads in real time. The wine industry is still heavy in print.
This interview has been edited and condensed.
This post was syndicated from Ad Exchanger.