How "Inshorts" can get to $100mil ad-revenue?💰
The silent advertising warrior is doing a lot of things right.
Weeks ago, we talked about Amazon killing Meta + Google's ad business. Today we explore our very own Inshorts that’s ticking all the boxes to grow its ad business. We under-appreciate Indian internet stories, this is one of them.
The origins of Inshorts 🗓
Inshorts started in 2013 with just a Facebook page to provide news in a snackible format. By the end of the first month, the page garnered 20K followers. This was one of the keys to building PMF for the founders.
The next phase was the launch of their app, which got 1M downloads in just 6 months, and in 2015 it was ranked as the #1 app on the PlayStore. This was a refreshing idea with a genuine problem to solve at scale. Byte size news (Indian & Global) in just 60 words.
It currently has more than 20M app downloads with a monthly active user base of more than 8M, with a more than 78% user base in the age group of 18 to 35 who lack time and attention span to read detailed news.
Yet, Inshorts was not running any ads on its platform for 3 years.
They were not building their platform for ads.
In the initial days, the Job to be done (JTBD) of the platform was to provide personalised news in 60 words in the form of facts rather than adding any of their views. One of the key metrics to judge the stickiness of the platform is its engagement, i.e. an average number of shorts read by a user is 80 per day.
Each app defines their north star in their own unique way.
Thus, news read per user is far more superior than the usual MAU/DAU.
An interesting fact to judge user satisfaction is that 70% of their app downloads come organically, and almost 35% of the short news consumed in India is done on Inshorts.
Inshorts enters advertisement ($$$)
In 2016, Inshorts launched its first ad on its platform with Airtel. By 2018 the platform was able to partner with 100+ top clients. The likes of Netflix, Maruti Suzuki, MRF, Audi, and Inshorts now have 500+ brands under their kitty.
From Day 1 the principle of the platform remain.
Active & Engaged User » Ad Revenue - Metric to be measured for the company is shorts read per day by a user. Inshorts user comes to the app almost 15 days in month i.e. almost every alternate day.
Be transparent with Advertisers - No false promise of conversions. Ad formats with clear demarcation for brand awareness & engagement.
Innovation is the key - Do not limit with just a plain vanilla approach of display ads via banners. Think native, think engagement, and personalise the solution for every industry. Result - More than 6 ad formats and multiple others in the experiment phase. We will cover this in detail below.
Inshorts reached $10 million in annual revenue from ads in 2019,
and would have surely crossed $30 million annual revenue by 2022.
So how will Inshorts could become a $100 million product?
First, zero tolerance in user experience
Providing the option to personalise your feed, provide a relevancy score to every single short being shown to the user, and giving an option to snooze the push notification for a specific time shows how much the platform wants to keep the user experience at its core even if it comes at the cost of some $.
Inshorts ability to customise feed with shorts read per session, engagement with previous ads, bookmarking habits, and feedback on the relevancy score puts it in a sweet spot. for each card.
Second, ad formats & placement that stand out
The ad format followed by Inshorts has been phenomenal. Most of the time it doesn't feel to a user that they are reading through an ad. Sometimes when the user knows it's an ad they are so engaged with the ad content that it's creative that they prefer to engage with them.
Third, innovating the category
Be it city based targeting or solving specifically for a highly grey area client (say crypto trading platform), Inshorts make interesting tweaks that solve for brand top of the funnel. Even the them acquiring retention.ai for user behaviour understanding is smart move.
Fourth, being the premium & staying there
When compared to similar news aggregator platform apps like daily hunt, which has almost 5 to 7 times the MAU as Inshorts, they are charging almost 1.5X to their client. The best part is that it is being done at scale. Doubling down on this & creating a innovative ad category will help it charge 500+ CPMs (cost per thousand ad impressions) for most of it’s ad inventory.
Fifth, expanding DAU & TAM - Bharat + Global expansion one at a time.
Going beyond english + hindi combination (truly and not just translation) will get this to penetrate further inside tier 3/4 towns. Plus, it eyes the category of Curio.io for global expansion. But, only time would tell if they can really crack the code on more savvy audience & how good the feed recommendation engine could work.
Lastly, client diversification
Move beyond companies that are focussed on awareness. Is there a way Inshorts can find a path to work out formats or placements that lead to conversions at scale? This will open up the gates for smaller brands and recurring revenue. Currently, the majority of revenue is coming from big FMCG, Automobile, or OTT clients. This is seasonal.
That was the Inshorts story.
If you are building an advertising business and struggling to solve for the right monetisation levers, checkout the new GrowthX experience.
Featuring Ayushi (Director | MX player) from GX8.
From moving to Texas at 23 to working in management consulting for seven years before joining GrowthX to now owning New Businesses and Monetization at MX Player. This is one of the exponential stories at GrowthX 💙