Apartment Therapy Restructures Commerce and Relaunches Dorm Site; Sees Growth in Direct Ads

Apartment Therapy Media restructured its commerce department last week in response to Google algorithm changes. It also relaunched Dorm Therapy, geared toward college students.

Both moves are, in essence, in response to Google; in the case of commerce, algorithm changes hurt traffic, and in the case of Dorm Therapy, well, you’re not going to get far from one-off visitors.

The commerce team is now known as the shopping team and has been shifted to work under the editorial division with a mission to not chase affiliate dollars but to serve readers in helping them find what they need, Apartment Therapy Media President Riva Syrop told AMO. That was done after traffic began to dip as Google updated its algorithm to prioritize content that demonstrates expertise, authoritativeness and trustworthiness—a move that tanked traffic at websites of all kinds.

With Dorm Therapy, AT Media made a misstep. The company has always been run with an audience-first attitude (give readers what they really need, don’t just click bait them), but this time, they decided to chase page views (the more the better) when Dorm Therapy went live in 2023. In less than a year, they saw that they’d made a mistake.

“It was sort of slogging along, and we were like, ‘This is not what we’re here for,’ and we really refocused Dorm Therapy around this idea of utility, right? We’re here to provide a service. We are here to help students feel at home at school,” Syrop said. “We got all the way back to work, and then that resulted in the relaunch last week, where we have a much bigger focus around these guides, so that people can go into a topic area that’s of interest to them, and really go very, very deep.”

It’s a bit of a rare stumble for a company that gets 30 million MAUs and 80 million monthly page views and expects revenue to grow upwards of 15% this year, in part thanks to a very well-received direct ad sales program. It has a strong and organic audience without any paid traffic and a cracking good direct sales division. The key there is connectivity between departments.

Case in point: A chatbot created in tandem with Home Depot to create room makeovers with furniture was developed with the content team.

“There’s just a huge trend towards contextual alignment and integration, which is brands really wanting to be next to hyper-relevant content that actually aligns with the audience,” Syrop said. “So we have a client, we know the need. We take it to content, we work together. They want to make sure that it’s in the audience’s best interest, and we bring this content forward.”

That’s not to say the editorial team’s probity is ever to be compromised.

“I would never go to the content team and be like, ‘Hey, we’re trying to win this advertiser, could you cover them editorially,’”Syrop said. “Editorial integrity is everything. You’re going to start losing your audience if it feels swayed or paid for.”

The results have been solid, with direct sales giving advertisers a “huge return rate,” and prompting them to return for more, Syrop said. 

“We can make things work for a client in a way that also works for our audience, which I think is very rare,” Syrop said. “With a lot of the other media companies, things are very, very structured, and you can’t move outside of the parameters of that. We can do just about anything.”

What has helped, even as the structure has grown, is the ability to be flexible, nimble and audience-first. Syrop credited being privately owned—by Maxwell Ryan, who founded the business in 2004 with the help of his brother—and not having to answer to investors who want to see topline revenue growth. It also helps not having to cut a lot of red tape when taking action and trusting colleagues to make the right choices.

Syrop said:

We can make decisions quickly, and we can make changes really quickly. We can launch things and sunset things, we can test very quickly, see what works. We can throw a lot of spaghetti against the wall, and that’s ultimately been the dominant driver of what’s differentiated us in the media space, this flexibility paired with a hyper focus on audience needs first.

AT Media wouldn’t divulge its revenue but did say the company’s EBIT was just shy of 10% and is climbing, with this year set to be stronger largely as a result of the relationship with direct advertisers.

“We’re just bringing forward completely differentiated programs that clients are getting very excited about. So we are, at this point, with our direct bookings and our verbals already about 50% to our goal for the year, which is far ahead of where we’ve paced historically,” Syrop said. 

Deal sizes have also gone up “remarkably.” 

Revenue streams

AT Media has five revenue streams: direct sales, programmatic, shopping, distribution (the distribution of content to portals like Yahoo and MSN) and licensing (licensing the Apartment Therapy property names in partnership with brands like Aera, Yamazaki and Bamboozle).

The majority comes from the first three, with distribution growing quickly—it’s a business they started pursuing over the past 18 months or so, and that already represents about 3% to 4% of revenue. They had already been distributing via Apple News, and started working with Yahoo and MSN.

Breakdown of revenue:

• Direct: 40%
• Programmatic: 40%
• Commerce/Shopping: 13%
• Distribution: 5%
• Licensing: 2%

“We have a massive, deep evergreen video library, so also looking to partners for distribution opportunities there,” Syrop said. They recently closed a deal with house tours playlists on Spotify. Not that they’re banking that much on distribution. Syrop points out that it’s not a controllable revenue stream, though the upside component of the deals is they have turned out to be “significant” traffic drivers. 

And there’s more to the AT Media story. It’s looking at doing a video series, a streaming show on The Design Network, launching an app and significantly expanding on how existing platforms are monetizing—not via a paywall, per se, but something akin to that that will provide “deep value” with community, content, services and tangible components that could include access to journalists.

“Part of it is a tools component. Part of it is interior design services,” Syrop said. It’s all still in the works. 

When you think about services, does that come only from an expert or from a service provider? Could it come from within the community? What we want to make sure of now is that we don’t sort of expand out of content just to expand out of content to check the box and say we did it. But where can we go next that serves real audience value? Our tagline is we overwhelmingly serve and everything has to pass through that test and rigor before we put it into market. Like, does it actually serve the audience?