Entertainment Company Uses Emotions To Grow Annual Revenue

Topix, an entertainment company, developed a strategy to profitably drive readers to the site using content based on four emotions to create relationships with readers through a programmatic ad channel.

Chris Tolles, Topix CEO, describes the four emotions as history/nostalgia, schadenfreude, humor and pride of knowledge. The strategy helped him build an entertainment media site with 30 employees. Six are writers producing between 2 billion and 3 billion page views monthly.

“The revenue per employee is about $1.8 million,” Tolles said.

“For most media companies, the revenue per employee is about $200,000; and for tech companies like Google and Facebook, the revenue per employee is about $1.5 million,” he said, adding the key is harvesting the efficiencies of the model.

The company, which has been profitable since 2015, estimates annual revenue of nearly $50 million for 2018 -- up from nearly $40 million in 2017.

“We’ve done this by harnessing six emotions and using data to understand what people want to read,” he said, adding that Topix -- which generates more than a terabyte of user data per day -- made about $1 million from a quiz.

Machine-learning technology looks at every click, leading to an analytical approach that informs the creation of every piece of content, resulting in the best experience for users and the bottom line.

It cost about $1,000 to create a "high-engagement" story based on images and text, he said. For example, 23 Hilarious Hipster Wedding Trends That Need to Stop Right Now  used the emotion Schadenfreude. The revenue from this piece drove 5.4 million visitors — about $782,000.The majority of the money made from the piece comes within the first six months. 

“Rather than creating editorial copy and flying blind, we harness the emotions to figure out the type of content people will come to the site to read,” he said. “It tells us how much revenue we can generate per piece of content.”

The content gets promoted on MSN, Yahoo, Tabula, Facebook and other sites, which drives that traffic back to Topix. It is monetized through programmatic advertising.

In analyzing the top 50 highest-grossing stories, Topix determined that four key emotions engaged readers the most: history/nostalgia, schadenfreude, humor and pride of knowledge. Not all of the emotions prompt engagement equally well.

Stories classified with the emotions of history/nostalgia and schadenfreude consisted of 60% of the top 50 stories. About 50% of the top 50 stories were classified as also having a second emotion.

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