This week, I decided to write a bit about scale and why it’s needed no matter what kind of publishing business you’re building. Also: some thoughts on the return to the office and how work will change. If you’re not already a subscriber, please sign up.
These days, it’s cliche to declare “scale is dead” and follow with something about “riches in niches.” The unbundling of publishing is undeniably being driven by a few key factors:
- Power shifting from institutions to individuals
- Value growing in narrow and deep vs broad and thin
- DTC business models beat intermediated models
And yet, scale still matters, only it’s different. Often when speaking of scale in the publishing business, people tend to use extreme examples, the venture-backed digital publishers ostensibly seeking to “compete” with Google and Facebook. (BuzzFeed is touting this as a main rationale of its public listing.) The problem, of course, is the scale achieved by Google and Facebook is unimaginably large, covering basically everyone on the planet. A recent breakdown of Facebook’s business model that got them to being a $1 trillion company noted that three key factors make it such a powerful ad business: 1. Scale; 2. Valuable audience; 3. Positive ROI.
I like this simple framework because that formula applies to just about all media businesses, including the first part: scale. Competing with Google and Facebook on scale within the context of “all of humanity” is probably a losing proposition, but every publication needs its own scale, not just in overall audience size but data about those people. The numbers can be far smaller based on how thin you slice the content, as Dave Nemetz has written. But you still need a sufficient number of your target audience to be loyalists of your brand. When people talk about “niche,” they sometimes apply it too liberally to very large groups. I don’t think a publication targeting women is niche. That’s over half of humanity. The more narrow you get the lower the scale threshold, but every publication needs to reach its own version of scale.
For niche publications, scale is a different proposition. Niche publications need some amount of raw numbers, but the audience must be the right type. What’s more, you’ll need more data about your audience. At Digiday, we focused first on the basics: email addresses. This is the foot in the door for audience data. Asking for too much info upfront comes at a cost: people drop off the more fields they need to fill out. So only collect the information you absolutely need. After we got an email address, we tried to attach more information to audience members by getting them to take actions that would fill out their profile. Some tactics:
- Ask for work email addresses. People will more likely give it vs Gmail.
- Look for shortcuts. Run basic matching to segment. For Digiday, the buckets were publisher, brand, agency, tech platform.
- Provide value for new data. We’d use reports and guides that would tell us something more. A person downloading the Guide to Programmatic is, at the very least, programmatic curious.
Only then can the other two factors come into play. The audience you’re attracting has to be of specific value. Are they very difficult to find elsewhere? Do they make buying decisions directly related to the content you’re producing? Assuming you get to whatever scale is for you and have a valuable audience, you can complete the formula for a sustainable business by delivering outcomes. When I first started covering advertising at Adweek, I learned about the difference between “above the line” and “below the line.” The former was the sexy stuff, the TV commercials (sorry, films) and print spreads. The latter was the sketchy direct mail and cheesy infomercials. But that’s over. Google adopted direct response advertising, as did Facebook. (Rebranding it as performance marketing certainly helps it sound better.) Every publisher needs to compete on outcomes, because Google and Facebook have set the bar there. Figuring out to deliver outcomes at a price that yields positive ROI is the challenge.
Job alert: Managing Editor, SellerCrowd Daily
One of the experiments I’m going to run is in job listings. In coming weeks, I’ll work with Pallet on incorporating their jobs board. In the meantime, I’m helping out SellerCrowd to find the next person to run their daily newsletter and make it the must-read for all those in the ad sales. SellerCrowd has built a vibrant community of ad sellers, and the opportunity is to embed in this community in order to provide valuable reporting to help this group succeed at their jobs. The posting is here. Get in touch if you want to find out more.
Meetings and busyness
The other day marked nine months since I’ve been on Slack. I can’t say I miss it. I thought I would -- it was, as Shareen put it in our “user guide” for team members, “the beating heart of the newsroom,” but it was also, in retrospect, a waste of time. The last nine months has given me some needed perspective on what’s important and unimportant in work. Some possibly unsurprising revelations:
- Most meetings are pointless. This is one I knew. Companies are filled with people who go from meeting to meeting. They’re “back to back,” they’re “rolling calls,” they’re looping in their assistant who can try to find a time. These must be very important people, I thought early in my career. They’re not, of course. Meetings are a means to an ends, not an actual ends. If anything, they’re unfocused and undisciplined. Everyone needs time to think, and much of the revolt over the workplace is that thinking time is sacrificed because company bosses like the control afforded by an office setting.
- The office isn’t going back to normal. Forget the tough guy hard asses who are trying to jam people back in those dreary open offices, with days interrupted by sad desk salads, waiting in line for a urinal, fights over who left dishes in the sink. We would have continued on like this if not for the pandemic exposing the utter ludicrousness of the modern office.
- Writing is a core leadership skill. I used to take writing for granted. It’s something learned around age 5 for most people. Many 12-year-old children write as well as the average adult. For most people, writing becomes an afterthought as they focus on building “real skills” in a specialized areas. But soon you find much of business is around communication. The office perpetuated meetings culture that benefits the charismatic types, the ones who use unnecessary technical jargon and speak with great confidence, if not commensurate substance. The hybrid future is going to put a premium on clear communication. Take it from Jeff Bezos: You should write it down because in writing your logical fallacies will be bracingly obvious.
- Underinvest in people at your peril. One of the scams of the modern company is this idiotic notion that “we’re like family.” All families are different, but I’m happy to say mine is nothing like a company. Most employees, at least in publishing, roll their eyes at the kumbaya stuff, since they know that if the business goes sideways they’ll get thrown overboard. We’re now in a situation of labor shortages, as people rethink how they want to live and signs emerge of a spate of spontaneous quitting. The bill always comes due. If companies take their people for granted when the companies have the leverage, they’ll suffer when the leverage shifts to the labor side, as it has now.
The Information is going vertical, sorta. The tech publication is spinning out a standalone publication, The Electric, focused on electric cars. I’m curious to see how this goes, since to my mind technology isn’t a vertical but a horizontal. There used to be a “tech industry” when it was computers, semiconductors, networking. But what industry isn’t tech now? The decarbonization of industries is a major story with nuances specific to the industries and their business models and regulatory frameworks. Starting from scratch is always an advantage to build from the POV of where an industry is going vs being mired in where it was.
Crypto makes me feel old. The metaverse makes me want to put my affairs in order. Matthew Ball has become the go-to explainer of the potential of the metaverse to change not just media but society. It’s somewhat out there, but so too was a lot of the promises of the early internet. For more on the potential, check out Kyle O’Brien’s Startup ROI from today.
Speaking of crypto, Mirror closed a new funding round led by Union Square Ventures, which has been early and right about many faces of the digital economy’s development. Mirror is a fascinating attempt to build a new kind of publishing platform that’s -- I don’t know if I’m using this right, haven’t micro-dosed -- crypto native. The details are messy in a typical crypto way -- each URL doubles as an Ehtereum wallet and there’s, of course, an anti-censorship angle -- but what I find potentially powerful is aligning value created with ownership while enabling new ways to shift audiences into participants.
I saw a quote by the Outside Media CEO saying he’s targeting 10% of visitors to Outside’s properties to convert to Outside+ members, forking over $99 a year. I termed this “insanely difficult.” I’m sure there are some edge cases, particularly in very niche areas, where a 10% conversion rate to paid is doable. But not outdoors enthusiasts, no way and no how. We hear about outliers all the time with subscriptions. A more typical funnel is one shared by Mario Gabriele, who has attracted 38,000 free newsletter subscribers that have yielded 750 paying members, or a 2% conversion rate.