If you’re going to be at Adexchanger’s Industry Preview event today, come to my session with Dotdash Meredith CEO Neil Vogel. We’re going to talk about leading into a headwind, culture change with the acquisition of Meredith and whether AI is going to screw with search-reliant business models (Neil will say not a chance).
This week, I spoke to Sinocism’s Bill Bishop, who holds the designation of being the first Sustack newsletter. In addition, some thoughts on optimism, AI and backlashes and Penske strikes a deal for a big chunk of Vox.
First up, a message from House of Kaizen about an upcoming AMA session. I did one of these with HoK last year and found it a great group.
The most valuable aspects of events for me are breakout sessions where people share their common challenges and approaches they take to solving them. I’ve always found that peer-to-peer learning is most valuable.House of Kaizen, which works closely with publishers to build sustainable revenue growth through research-based performance optimizations, has built a community of subscription professionals to learn from one another. SubscriptionWorks offers access to best practices and product-specific consultation backed by over 20 years of subscription growth experience Customizable packages include access to a private community of executives from the world's leading subscription companies, featuring AMAs, product teardowns and live A/B test reviews. Upcoming AMA's include : Micaela Shaw from Embodied, Corlyn Jeskey from AARP, Nicole Orders from The Washington Post, Eric Hellweg from One Medical.
The original Substacker
Bill Bishop likes to make clear he’s not a journalist. Instead, he’s a China analyst who brings his deep understanding of the country to an English-speaking language through his newsletter, Sinocism. In 2017, Bill became the “original Substacker” after teaming up with Substack’s co-founders to be the first newsletter on the platform.
On this week’s episode of The Rebooting Show, Bill and I discuss his independent path, and how a subscription model has created different dynamics as opposed to his experiences in the dot-com era as a co-founder of Marketwatch. What’s telling to me is that Bill is also now considering advertising. The Substack model of “only ads” doesn’t make much sense long term for most writers. Even if they convert 10% of their audience, they’re making no money from 90%. Most businesses don’t operate that way.
Note: Due to a production mishap, this episode will be uploaded later today. Good excuse to subscribe to the podcast for it to appear in your feed when it’s finished. Subscribe to The Rebooting Show on Apple or on Spotify.
Optimism, AI and backlashes
The pendulum is also swinging back in the direction of optimism. On the latest episode of People vs Algorithms, I tried to make the tricky case that we need more optimism and fewer optimists. Optimism is like freedom: who can oppose it? And that’s why it’s often used as a hand-waving device by self-proclaimed optimists who operate on the bullshit continuum, which stretches from marketers to con artists. It’s a short walk from sunny optimism to toxic positivity. I can remember Lance Armstrong on the Champs Elysee in 2005 saying to “the cynics and the skeptics” that he’s “sorry you don’t believe in miracles.” He was using optimism – who doesn’t love a fairy tale? – to avoid the critical questions.
Maybe it’s because we are now into February, the worst month of the year, that I’m attracted to signs of optimism. At The New York Times, David Leonhardt has returned from book leave and taken stock of what’s changed in the past four months and found a lot of positive developments. Leonhardt has banged the drum of negativity bias in news for some time, but this isn’t just an industry affliction. People routinely perceive a more negative view of the world than that painted in statistics. We see this in the unemployment numbers, which themselves are part of what Derek Thompson calls the yo-yo economy. Despite record low unemployment, bosses in many industries are seeing the power shift back their way. They’re wielding that leverage to enforce return-to-office mandates and rein in perks in what Meta boss Mark Zuckerberg has called a “year of efficiency.”
The rapid advances in artificial intelligence is one area of optimism. ChatGPT has reached 100 million users already, and perhaps even sparked a return of the search wars. I hope to use this time to roll out fuzzy memories of AltaVista, Lycos, paid inclusion, Overture and that time I went to a launch party for a Chinese search engine that rented Bill Clinton to give a talk during his post-presidency cash-grab phase.
One tangible immediate impact is the VCs are activated. There’s already an explosion in AI startups, enough to have their own landscape chart. Naturally, we should expect an AI bubble to form, as expectations get far ahead of reality. There’s plenty of hand wringing already over the impact this will have on humanity. It’s good to remember that fear of tech dehumanizing us isn’t new. Back in the 1960s, school children were asked to imagine life in 2000. One boy’s fear rings true for today: “People will be regarded as statistics rather than actual people.”
My bet is AI will both thrill and disappoint, and continue to produce milquetoast “content” in every sense of the word that will be average in every possible way, as Kyle Chayka believes. That might threaten SEO copywriters and cause publishers to consider opting out of algorithmic systems, but surrounded by mediocre, lifeless robot media, people will seek out the artisanal. “Curiosity is not like an appetite that can be sated with ‘content’; it is a process that seems to renew itself by seeking obstacles,” notes Rob Horning.
Sara Fischer was nice enough to give me the kicker quote in her piece about media preparing for a still mostly unknown era of AI. I’m a near term realist about how many of these advances take longer than we anticipate. How long ago was Jeff Bezos talking about drone delivery on 60 Minutes? What happened to redesigning cities around the Segway, and what was that Microsoft thing that made Scoble cry again? Even the big headline numbers aren’t too crazy in perspective. Google is vowing to plow $300 million into an AI firm and is plowing ahead with its own answer to ChatGPT.
In the long term, AI will undoubtedly have a big impact on the generation of content, without a doubt. In the end, replacing humans is a natural fear we always have of technology, and humans are quite practiced in adaptation. That’s how we got this far. I’ll be speaking to Dotdash Meredith CEO Neil Vogel later today at Adexchanger’s Industry Preview event. Neil is a skeptic of AI’s impact on digital content, even going so far as vowing to Sara that Dotdash “will never have an article written by a machine.” At a time of record unemployment, AI will become a tool to boost productivity of humans – this is the Year of Efficiency, after all – more than idle all of us in the laptop class, at least I hope.
The backlash against algorithms and AI can be traced back to people feeling a lack of control and a fear of manipulation. There are already cautionary tales of young creators burned out from the relentlessness of feeding algorithms. The race-to-the-bottom in digital publishing happened suddenly, then all at once, as the only way to make ends meet became the optimization of algorithms. Despite the Reign of the Optimists, I can understand the pessimism of such robot journalism – and note that those most jazzed about it tend to have “business-to-content” models in which the tail is wagging the dog.
Even MrBeast isn’t safe. His video showing him pay for surgery for blind people is easily caricatured as another excess of the endless culture wars. But part of the backlash is because this type of content was fed into the MrBeast algorithmically optimized machine, complete with the surprise-look thumbnail to drum up engagement. On TikTok, there is a rise of “de-influencers” (The WSJ has specialized in making up a lot of words lately) who are exposing the vacuousness of algorithmic-driven overconsumption. That’s why David Brooks has a point when he advises that in the AI era, it’s best to “major in being human.”
Nothing in publishing is set-it-and-forget it, and that goes for affiliate content too. The industry loses an estimated $5.5 million monthly due to link rot, the catch-all terms for broken links and those pointing to out-of-stock items. This is money publishers are leaving on the table. Trackonomics by Impact.com’s LInk Scanner is a handy tool to hunt down link rot on your pages that’s costing you revenue. Claim your 25 free link scans today to see how you can save thousands of dollars in commissions every month.
Penske Media’s $100 million investment into Vox Media, at a $500 million valuation, is another sobering indication of the lowered expectations for the big digital publishing companies of the previous era. The valuation is just half what it was when NBC Universal invested $200 million in 2015, making PMC the largest shareholder in Vox. PMC has been a quiet success story of the sector for years, with Jay Penske known as a shrewd operator. The collection of assets PMC has assembled, from the leading Hollywood trade publications to Rolling Stone, SXSW and Dick Clark Productions, offer an intriguing alternative model to the much more ballyhooed big digital players like BuzzFeed, Vice and Vox. Side note: I snarked about this being nepo baby fallout, but a more serious issue is whether Vox’s organized workforce of journalists will love being part-owned by the Saudi government, considering the sovereign wealth fund of Saudia Arabia owns a chunk of PMC.
Aging Media’s John Yedniak lays out a case for remaking the trade show business with a creator focus. It’s a compelling blueprint. I believe the industry events business is do for a reset. The vendor-driven models are tired. B2B events are about creating a marketplace dynamic, but the way that’s done – whether at conferences or trade shows – is dispiriting. There’s a need to get out of the same drab, over air conditioned ballrooms with sales pitches few are paying attention to. In the media industry, there’s a need to cut down on the boondoggle element where executives are comped free vacations to create leverage to match them with sellers. Lots of rackets in media.
There’s a good case to eliminate the hairy chest war talk from business. It’s always laughable. Running around the office saying “lock and load” in reference to a marketing email is simply idiotic. Everyone should take their jobs seriously, but also have a grip. The IAB’s I’ll-fight-everyone-in-the-bar approach is an interesting test of just how effective the Full Trump is for a trade group, as it uses the type of over-the-top language usually associated with professional wrestlers and fringe politicians.
If you’re one of the people who snarks “What does Salesforce do anyway?” there’s help from The Martech Weekly, which deconstructs Salesforce’s business model and product set.
Misaligned incentives aren’t unique to the media business. The airline industry is by most measures in the best condition it has been in several years, with rising profits and travel continuing to boom. And yet its customers have never been unhappier.
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