Investing.com goes mobile, proves that paywall-free content can be hugely profitable
Private investors have no shortage of sources of information on stocks. Most of these tools fall into one of two buckets: Free products, like Yahoo Finance and CNBC, which offer a limited amount of detail, creating a false sense of confidence and placing the individual trader at a significant disadvantage from the professional. And paid products, like Bloomberg and Reuters, that narrow this information gap significantly but cost a lot.
Investing.com aims to deliver an alternative, offering consumers free real-time access to data and premium content. It relies on a hybrid business model consisting of advertising, which represents 85 percent of its revenue today, and the sale of investing tools (like financial calculators, economic calendars, and charts) that comprise the remaining 15 percent.
This week, the Cyprus-based company took this strategy a step further by launching its first ever mobile product, a freemium Android app that provides the full functionality of its desktop Web product in an on-the-go fashion. The free version of the app will be advertising-supported, while the paid version will be ad free.
The decision to launch on Android app ahead of an iOS one is not typical. Nevertheless, CEO Dror Efrat believes it gives Investing.com an advantage.
“There’s a vacuum within the Android ecosystem [because] there are no decent solutions in the financial space,” Efrat says. While Investing.com plans to launch on iOS by the end of the year, "we see an opportunity to be the clear leader on Android.”
Developing the app was no small feat, according to Efrat, who said his company spent more than $1 million and 18 months on the app’s design and development. At launch, the app supports 18 languages and covers all asset classes on a global basis – tracking more than 30,000 financial instruments traded on more than 70 global exchanges – something that many paid apps can’t claim.
Efrat said in a statement:
We found that of all the finance apps on the market, not one offered the tools investors needed on a real time streaming basis to move just as fast as the markets do yet with a simple and friendly user interface. We're handing Ferrari keys to people who were driving tricycles.
Investing.com was born out of a predecessor site called Forexpros.com, where a team of professional currency traders began sharing their insights with the public. When the site expanded into other asset classes – today it consists of 30 percent equities, 30 percent commodities, 20 percent forex content – the initial name became a limiting factor and the company sought a more universal brand.
Getting the Investing.com domain cost $2.45 million, which at the time (December 2012) was the 26th largest amount ever paid for a domain.
“It sounds like a lot, but we think we got a great value,” Efrat says. “The seller was less pleased. He only made a 15 percent annualized return over four years.”
Today, Investing.com counts between 750,000 to 800,000 daily page views and approximately 400,000 daily unique visitors. Forexpros, which was founded in 2007, grew traffic and revenue at an average of 200 percent per year over its lifetime, but was hobbled briefly by the name and domain change to Investing.com. The company lost 15 percent of its traffic in 2012, but has more than made up for that in 2013, Efrat says. Today the site attracts nearly 4 million unique monthly visitors. This places it among the Top 30 financial websites globally.
Investing.com generates $20 million in revenue, with a profit margin of “roughly 50 percent,” according to its CEO. And while advertising rates (CPMs) are undisputedly the highest in the US, only 8 percent of the company’s revenue comes from the US.
The goal at Investing.com is to use the newly launched mobile app to grow overall reach while better engaging its existing audience. When the company released a beta version of its app to a thousand users, it found that 65 percent of them opened the app daily, with an average of 12 sessions per day and three pages visited per session.
That's healthy engagement, although it remains to be seen whether these metrics will hold over a broader audience.
Long-term, Efrat’s vision is to become the Bloomberg and Reuters for non-professional traders. To do this, the company will continue to offer investing data and tools for free, while layering in additional original and aggregated premium content.
Investing.com has demonstrated that it’s possible to build a large and highly profitable media company without a paywall. The company benefits in this regard from its highly targeted, overwhelmingly affluent audience which command premium advertising rates.
There is no reason to believe that consumer appetite for premium financial content will decline any time soon, and free is a price point that’s hard to argue with. Investing.com’s biggest risk is that another well-funded competitor, such as Bloomberg on the premium end or Yahoo on the lower end, chooses to meet the company in the middle in terms of content quality and pricing.
Given the value of this market, it would be foolish to expect the competition to lie down without a fight. But innovators dilemma being what it is, it’s unlikely that these companies will truly disrupt their current models.
From its beginnings as Forexpros, Investing.com has been a product build for traders, by traders. The domain expertise and attention to detail is apparent in the end product and in the response from consumers. With an ultra-premium domain, the company may be positioned to challenge the largest companies in financial media.
[Original image via Thinkstock]