Economies Of Mail

The Daily Mail - and its racy younger sister, mailonline - is often held up as a great example of how print media can adapt, and even flourish, in the digital age. But is it really the money-making behemoth we’re led to believe? We did a bit of number crunching and, well... something doesn’t add up.

Everyone has that friend. The one who, every time something from the Daily Mail gets shared on social media, feels compelled to reply almost instantly with “UGH. DON’T LINK TO THE MAIL. YOU’RE PLAYING INTO THEIR HANDS. THEY WIN IF YOU CLICK ON THAT LINK.” They’re the same type who habitually refer to it as the Daily Heil, or the Waily Mail, or the Maily Fail. The self-appointed community support officers who like to slip on their hi-viz tabards and pad around the internet telling other users to put that down and stop climbing on that.

If you can stomach the sanctimony, it’s actually kind of fun to watch them work. Seeing them get all hot and bothered by other people’s browsing habits can even be quite sweet, but it’s all predicated on this widely-held assumption that the Daily Mail (or, more correctly, its digital counterpart mailonline) is doing a roaring trade in tittle-tattle on the world wide web. When they announced their quarterly turnover earlier this month though, something struck us about the numbers. Because, for all its online omniscience, they seemed kind of small to us. Not the traffic itself, nor the number of readers, but the actual amount of money they’ve been able to glean off the whole racket.

So we decided to take a closer look.


We’ll do a bit of back-of-the-envelope mathematics to thrash out this theory, so here are some of the more pertinent numbers and what they mean.

160,000,000 - mailonline is currently racking up about 160 million unique users a month. What this means in actual, practical terms is that 160 million different electronic devices are logging on to at least one mailonline webpage each month. That’s either 160 million different people all using one device apiece; or, more likely, a smaller number of people logging in from their office computer, their home computer, their smartphone and possibly other tablets and laptops over the course of a month. (Still, the same is true of all website stats and, relatively speaking, this number is huge.)

26,000,000 - Every day, mailonline registers about 26 million page impressions. Simply put, you click on a link, it registers as one page impression. It is a tiny bit more complicated than that - but, again, the same holds true for every other website in the world, so these figures remain incredibly impressive.

20 - This (in pounds sterling) is the lowest advertised rate for advertising on mailonline. Their ratecard is here. Twenty pounds is the cpm or ‘cost per mille’. In layperson speak, this means that twenty quid will get your ad to appear on one thousand pages.

41,000,000 - 41 million is the revenue that Daily Mail & General Trust announced that mailonline made (in pounds sterling) last year to the end of September. That is not £41 million in profit; that is £41 million in revenue.


It may also be helpful for you to understand how the mailonline site is set out - so here is a diagram.


As mentioned, the sort of traffic that mailonline deals in is massive. 26 million page impressions a day works out, roughly, at 1.08 million page impressions an hour, or 300 a second. Their ratecard suggests that they are selling their cheapest ad space for £20cpm. With 300 page impressions a second, that £20 is burnt through in just over 3.3 seconds.

At that rate then, they should be earning about £6 a second in ad revenue. Expanding that out for an annual turnover we see that is £189 million.

Already that’s over 4.5 times what they make and that’s just with one ad per page at their lowest advertised rate. In practice, each page is likely to have a banner ad, a skyscraper, a couple of MPUs, maybe a background skin and perhaps an unskippable video ad attached to the front of any video content they're running. Totting up all of the ad opportunities they have per page, if they were true to their ratecard, they'd be clearing a billion pounds in annual revenue easily.

But they aren't. Their announced annual revenue is £41 million - just 4% of what they reckon they could (and should) be earning for the space they offer.

So what's going wrong?

Well, one of the biggest problems is the page impression itself. For years, it has been an industry standard unit for measuring an advert’s impact (and therefore charging clients). People have been prepared to use it because it seemed like a sensible metric, but recent research (by tech analytics experts comScore) has shown that as many as 77% of ads sold on a cpm rate are going unseen.

Partly this is because for a page impression to ‘count’, the ad doesn’t actually have to fully load on the computer’s screen (much less be looked at or interacted with). It’s also because we, as readers, have become very adept at filtering out adverts in our field of vision. We know that they will generally adorn the top of the page and the right hand column and, as such, our eyes are now instinctively drawn the centre-left of a webpage.

Advertisers are becoming increasingly aware of this and so are now unwilling to pay a rate that is based upon a thousand page impressions when only 330 of them are actually of any value at all.

Moreover, the value of those useful 330 is dramatically decreasing too. Consider it. If mailonline is getting 300 page impressions a second, to have any meaningful impact on the website’s hourly output - even their minute to minute output - you have to buy up a lot of ad space. A lot of ad space.

For every new page impression mailonline gains, the site will spawn roughly five new advertising slots. So the more popular the site becomes, the more available ad space they have to fill. As laws of supply and demand dictate, a surplus of advertising space means that its value drops. Ad agencies have taken advantage of this to drive down the price of the display inventory by trading it through an exchange, so its actual value sits closer to one pound per thousand views. A long, long way off anyone’s ratecard.

This problem isn’t exclusively the Mail’s - this is happening all over the internet - but if the page impression isn’t an entirely debased currency as yet, we are wading about in the wheelbarrows-of-cash-for-a-loaf-of-bread stage of hyperinflation. The people who are driving the problem are the link-baiters and page-views chasers (i.e. the Daily Mail). The people who stand to lose the most from it are the people who have built their entire business model on it (i.e. the Daily Mail).

Generating revenue is only one part of the equation though. There’s another issue at hand.


mailonline is a gargantuan operation. Huge. On a normal day, they will post about 750 new articles. That's 273,750 articles a year. Although some will be more popular than others (and therefore responsible for different amounts of ad revenue) each article, on average, will bring in about £150.

For the venture to be profitable, all you need to do is make sure that your cost per article stays under £150. Easy enough, right? Well, they get all the stuff from the paper for free, only paying a few people at night to stick it all online. But to churn out 750 articles a day, you need a lot of hands on deck – even if all you’re doing is ripping off other stories.

Employing freelancers (at about £40 per story) would set the business back 30 grand a day. So, instead, night and day, there are about 130 editorial staff members working in the mailonline office. That’s in the UK. Then another 80 in the US, a handful in Australia and a couple in India, so that they never need see the sun go down. In all we can guess comfortably at about 215 staff on mailonline’s books. If they’re all employed on a reasonable day rate (say, £120) that’s £25,800 for the working day’s wages; and £8 million for the year (paying for a reduced staff at weekends).

Now, pictures. The average mailonline piece has 7 pictures. Some of these will be sent from PR agencies (and so will be free) but a significant number are proper, agency-sourced pictures.

Agencies know their pictures are worth a lot to big enterprises like the Mail. Exclusive sets of photos can easily have a price tag reaching up to four or five grand. Clearly, mailonline isn’t paying this much per set though as that would be setting them back about £3 million a day – and not even the Guardian loses money that fast.

No. In practice agencies will strike good deals with them, but, accounting for some big-ticket spends every once in a while, we’ll say around £3 a photo. That's £20 per article…. So maybe £5.5m a year.

That's not where the picture costs stop though. One of the drawbacks of having so many images on each page is that the data consumption per page is pretty high, and bandwidth is not a cost simply to be waved away. Each seven-picture article weighs in at around 8MB. Annually, that spirals out to 72,403 terabytes - or 70 petabytes.

And this is all to say nothing of video, which is very data rich (and the good stuff is expensive to license too).

Then there’s the miscellaneous costs. Office space for 200+ people, technical support - that sort of thing. Oh, and legal fees. Plus, if you want to hire Liz Jones and Samantha Brick and other top-drawer trolls, you’ll have to fork out more than forty quid for their freelance fees.

Still, that should leave a fairly sizeable chunk of profit. So why are they being so shady when it comes to discussing profitability?

The revenue is being reinvested in growth, apparently. As Martin Clarke – the man at the head of the whole machine – told the Financial Times, "If we weren’t doubling down, we’d be profitable."

A portion of this 'doubling down' will be going into Search Engine Optimisation (commonly known as SEO). SEO is what causes to appear at the top of the page nearly every time you type anything into Google. This doesn’t happen by magic. The Mail are paying experts to hone their website and ensure that they get this top billing to attract more readers.

Which is a sensible idea - if you have a sensible business model. But if you’re paying someone to court an audience that you can’t actually make any extra money out of (and one that may even start costing you if they decide to stick around) then perhaps it's not a sensible business model.


Maybe you’re thinking this is all just what it costs to be a pioneer in internet media. It’s probably the same story all over the web, right?

Erm… well, no. Not really.

While mailonline’s traffic numbers are, superficially, impressive - when compared to the sorts of sites that are nipping at their heels in terms of traffic, other sites on the internet seem to be much better suited to making money.

Take Upworthy – that site which promotes all those feel-good, right-on viral videos. While Upworthy isn’t really generating revenue yet (it’s still working off investment money) the site gets 80 million unique users a month. Last October, their team of ‘curators’ published just 256 articles - a third of what mailonline publishes a day. So, with just 1% of the number of pages published (and about 0.1% of the total word count), Upworthy has been getting 30-50% of the monthly unique users mailonline does. What's more, the audience is very specific and very engaged - which is catnip to advertisers.

Or take BuzzFeed. They are currently clocking up about 130 million monthly unique users, but only publishing 120-150 articles a day (20% of the mailonline’s output; 80% of the audience). Their advertising model works on what is called ‘native advertising’ – where a brand buys out each page so their famous cats and listicles are brought to you in association with a company, rather than having ad banners just plonked on the sides. They’re quite tight-lipped about their figures but their projected 2013 revenue was $60 million. Almost exactly the same as mailonline’s £41 million - but with less content, fewer staff and a smaller audience.

Or take Vice, who produce branded content in conjunction with huge corporations and get them to bankroll their hugely-viewed trips to Vietnamese karaoke prisons or Colombian snuff cinemas. They get a fraction of the mailonline’s unique monthly users but their web presence generated an estimated 80% of the $175 million Vice Media turned over in 2012.

mailonline also face the very real problem of Facebook. For all it has become a repository for memes and clickbait, Facebook is working hard to reposition itself as a legitimate media source by fiddling with its algorithms to demote sites it deems to be soft, trashy or facetious. (They need to keep up appearances for their own advertisers). This might not sound like much of a threat, but a recent tinker to the Facebook algorithm demoted Upworthy links in people’s news feeds cost Upworthy and estimated 25% of their traffic.

Currently the mailonline is trading on the name and brand of the Daily Mail - which, for all its faults (real and imagined), is a proper, real-world news outlet. If mailonline’s editorial policy becomes any more distinct or divorced from the Mail’s however, they may well attract the attention of Zuckerberg and co. If they do, and they get themselves dropped down the pecking order, Facebook could cost the mailonline dearly.


In the same report DMGT also reported that their print advertising was down 2%, bringing in only £53million this year. This figure was kind of brushed over in favour of talk of website growth - played down almost - but it’s worth a quick look.

£53 million is £12 million more in ad revenue than the website generates. Yes, the website’s growth has been impressive - it has become the biggest newspaper website in the world - but it’s actually pulling in much less cash than its dead-tree equivalent.

The Daily Mail’s circulation is 1.6 million, about 1% of its apparent online audience. So the ad space they’re selling online is actually, relatively, worthless and it appears to be their only major stream of revenue.


Martin Clarke expects to be turning £100 million plus in digital revenue in three to five years. Clarke once also described mailonline as "journalistic crack". He said it like a man who has watched about two and a half seasons of The Wire, thinking it all seemed like fun and assuming that things will probably turn out quite nicely for the crack dealers.

As anyone who has seen the series can attest, crack-dealing is not the sort of business in which you can really make three to five year forecasts. Neither is banner ad-based journalism.

So next time you share a Daily Mail link and are shouted down by social media police, tell them this. All of this. Tell them that they are perpetuating a baseless half-truth about the mailonline’s profitability that might actually help the Mail weather the financial storm, because consumers, investors and advertisers will mistakenly perceive it to be more valuable then actually is. Tell them that by sharing these things on Facebook, you will bring about greater scrutiny on their content from our dark overlord, Zuckerberg, who is looking to stamp that sort of thing out. Tell them that in clicking on links to the you are helping to destabilise their primary source of revenue and might actually be expediting its demise.

And then tell them to get a proper fucking job.