You may not have heard of SmartNews, but the Japanese news discovery app has quadrupled its U.S. audience over the past 2 years and now drives more traffic to publishers than Apple News, according to traffic news referral service Parse.ly.
Yes, but: SmartNews' audience is still tiny in the U.S. compared to that of other news aggregators and it's not considered a strong partner for strategic news distribution.
"It's very much just sugar rush traffic," says one audience development manager.
Details: SmartNews is a free news discovery app that was created in Japan in 2012 and launched in the U.S. in 2014. It's raised $88.3 million to date, and at the time of its last funding in 2016 was reportedly valued at around $500 million–$600 million. It has an audience of roughly 15 million users, mostly from Japan.
- But the company is aggressively pushing to expand its U.S. presence, in part because audience and ad revenue opportunities are great here. It's hired 25 people across 3 offices in San Francisco, Palo Alto and New York City, the head of U.S. marketing Fabien-Pierre Nicolas tells Axios.
- The company has also been buying cable news ads across Fox, MSNBC and CNN. Its goal is to attract older news consumers in the U.S. across all demographics and political ideologies.
Be smart: In Japan, SmartNews is a market leader and considered one of the top news discovery apps, with roughly 3,000 news publishing partners. But in the U.S., it so far has only signed on 350 publishing partners.
- According to Parse.ly, SmartNews didn't start to really distribute traffic to publishers until the summer of 2017. Last March, that growth accelerated even further, and has been trending upwards ever since. Traffic referrals to publishers have grown by 125% over the past year, per Parse.ly.
How it works: SmartNews is similar to Apple News in that it selects traffic distribution partners to work with and helps them set up channels that users can follow. But when it comes to most traffic referrals, the app relies on algorithms to elevate news from vetted publishers in its feed.
Between the lines: Axios spoke with several audience development professionals and while most agreed that the added traffic surges from SmartNews are helpful, many argued that they haven't yet become a very strategic audience development partner for a number of reasons.
- It doesn't have a great sense of editorial strategy. News coverage from outlets that didn't actually break the news is alerted.
- Traffic spikes are high, but not as sustained. "Traffic shoots up but quickly wanes after it's moved from the top position on the SmartNews feed," says one audience development manager.
- Bounce rates are very high. People visit the article after it's pushed to them, but don't engage further with a news brand after that.
- There's no pitch process. It only ranks news algorithmically after a publisher is added as a curated source.
My thought bubble: SmartNews is starting to send a lot of news traffic to U.S. publishers, but there's no real mechanism to build an audience yet. For now, it's an added bonus, but not a platform that a company can really invest in strategically.
Go deeper: Read the full piece here.