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[on-hold music] The thinking that a product company establishes at the core of their strategy really comes down to understanding who it is they're trying to sell to, what is their ideal customer profile, understanding those folks' jobs to be done and working to fulfill upon the needs of their customers.

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And in the world of publishing and media, those customers are the audience, right? The consumers of the content, the consumers of the information.

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And building a product that helps them meet their needs, first by understanding it and then fulfilling upon it and doing that over and over again, again and again, that is where the intention comes from, right?

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The intention to create something that's a mutually beneficial commercial relationship. Put simply, it's building something people are willing to pay for.

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[on-hold music] Welcome to the Rebooting show. I'm Brian Morrissey.

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Sorry for the spotty posting the last couple of weeks. I have some things in my irony now.

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We have several good episodes coming up, including one next week with NYU Professor Jay Rosen, who I always enjoy talking to about the journalism side of the media business.

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On this week's episode of the Rebooting show, I'm joined by Matt Cronin, founding partner of House of Kaizen, which works with publishers and other companies with recurring revenue businesses to align their business goals with audience needs through customer experience frameworks.

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That's a fancy way of saying that House of Kaizen makes sure that the needs of the audience are not forgotten.

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Matt and I are doing these quarterly to dig into the question of what it means really to be customer-centric for a publisher and how to put those needs at the center of business strategies under all the litany of pressures that we discuss on this podcast frequently.

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This seems obvious, but more often than not, the needs of the audience have been placed further down the priority list at many publishers.

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And I think the challenges the businesses face in some ways are a lagging indicator of that. House of Kaizen's been a great partner of the Rebooting. I've really appreciated Matt's support, uh, and everyone there.

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And I love discussing these topics, particularly with Matt, because he sees beyond publishing, and I believe the industry can sometimes be too insular and stuck in the belief that its challenges are completely unique.

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So hope you enjoy this conversation. As always, please send me your feedback and guest suggestions and any other comments at bmorrissey@therebooting.com. And please leave this podcast a rating and review and comment.

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I always like to read those. So onto the conversation with Matt. [on-hold music] All right. Cool. Matt, thanks for joining me.

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Talk a little bit about, I think, a major issue that is a recurring theme as publishing changes, and that's how to get more customer-centric.

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[on-hold music] So one of the things I just wanna start off on, just a couple, like, news items. One is BuzzFeed recently r-released their, their annual report, and it comes with a, a letter from Jonah Peretti, the CEO.

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Something that stood out to me, one, you know, BuzzFeed giving up on the idea that platforms are going to, quote-unquote, "cultivate a media ecosystem where quality f-publishers can thrive."

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It was always sort of betting on this, this notion that the interests were aligned between publishers and platforms and, and that didn't come to fruition. And he included one statistic that I just...

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I'm trying to wrap my head around. From twenty-twenty to twenty-twenty-three, BuzzFeed's Facebook traffic declined seventy-four percent. A-and, you know, they mitigated that with direct traffic growing twelve percent.

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Now, I'm not, like, a math expert, but that's, that's tough.

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But I think what it speaks to for me is a lot of publishers are waking up to this idea that they need to pivot completely in order to truly understand their audiences, and the reality is a lot of them simply don't.

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Is that something you see? [on-hold music] Yeah, you're

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gonna do the

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challenges to opportunities thing on me, aren't you? [on-hold music] I have to. [laughs] [on-hold music] We all have roles to play. That's good.

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[laughs] No, that, that, that's a great point, a-and 'cause I think a lot of the playbooks and a lot of the infrastructure and a lot of the processes that were built up around something completely different, and th-that's a sort of fundamental first principles kinda thing.

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And changing that on the fly is really difficult. You know, BuzzFeed itself is now presenting itself as an AI sort of tech-enabled [laughs] company- [on-hold music]... which, I don't know.

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I'm hoping to have Jonah on this podcast, uh, in a few weeks to discuss this.

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I like Jonah, and I, I'veI give BuzzFeed a ton of credit for a lot of format innovation that they have brought and it's gonna be fascinating to see if, if they can, you know, turn this around and become a different type of company.

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You know, but I, I think when I look around and I wish it wasn't the case, I really do I see a lot of major publishers floundering in this transition, this very fundamental transition to being audience-centric.

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It came up with Forbes just the past couple weeks Forbes was operating a subdomain that was not made for people. It was taking the articles- Yeah...

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on the regular Forbes site, which are, I'd say it's an aggressive UX [laughs] if I could be euphemistic. Troy Young on a fellow podcast praises it for its, its ad density. [laughs] It depends on what floats your boat.

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But anyway, they, they created a subdomain that they were using Taboola and Outbrain content rec networks in order to funnel traffic there, and it's a classic arbitrage game. Mm-hmm. I wrote about it.

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It, it was funny for me to read about this, you know, quote unquote, expose in, in the Wall Street Journal because I wrote about Cafe Mom doing literally the exact same thing. Yeah. This was 2013. [laughs] Yep.

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Like, these are... The, these, these tricks, these arbs are, are, you know, sometimes they change, but like sometimes they're just the same things again and again.

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And, and basically what they were doing was taking, taking the content and, you know, remaking it into slideshows, and you get- Mm-hmm... like 154 ad exposures for a 600-word article if you go all through that.

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Then they buy the traffic with titillating headline, I'm sure- [laughs]... in, in the content rec networks. I, I don't hate the player. I do sort of resent the game sometimes.

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I think with, with those kinds of things I truly believe we'll end up seeing the utility of that decline.

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And I understand in the short term a lot of publishers feel, feel as though it, they need to be doing these kind of things, but it's hard for me to see how...

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I mean, arbitrage by its definition, its function is short term. It should close. Right. [laughs] Yeah. That's a really interesting dynamic.

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I think we see a lot of these sort of hacks, as you've pointed out, happening in the shadows, in the environments in which the, the demonstration of what works and what doesn't work is only apparent in a spreadsheet, right?

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It's, it's only something that you can see and understand in a way that's disc- disconnected from the human experience. And because of that, it's a lot easier to do.

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[laughs] I think it's just easier to kind of like turn the dials, flip the switches, and manufacture something that looks good in a context that's somewhat undefined without actually taking a step back and thinking about it through the eyes of a human being and through their context and through their experience and what it is that they are looking to achieve through your product.

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That's a much more complicated way of organizing your business strategy, one that I think honestly puts a lot of fear in the minds of many publishing leaders.

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Unfortunately, the fear of embracing that kind of change seems to be stronger than the fear of watching the business decline.

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[laughs] But, you know, there is a real potential to look at this from a different point of view and to recognize that the spreadsheets aren't telling the whole story, that in fact there is the human point of view that can drive a more sustainable, more su- more healthy business.

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Yeah. Then they might just, they might just [laughs] not want the feedback, to be honest with you. I mean, anyone who's like, [laughs] you know, have you ever done one of those 360 reviews?

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It's like, [laughs] it's like, "Oh, wait. I, I like the reviews for the other people." [laughs] Absolutely. Yeah. It, it's hard to make sense of, you know, what, what humans are expressing and experiencing for sure.

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People are complicated without a doubt.

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And so for publishers to embrace the idea that their audiences are made up of many different groups of people versus one homogenous group, each of those groups has their own complexities and their own differences, it just makes things harder to do.

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And it's, I think, a, a real challenge to look at how a business can evolve and adapt in order to serve those complexities than it is to look at just manufacturing MFA type of sites that affect a spreadsheet that look good to advertisers.

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And I, and I will also say that the advertisers have a role and a responsibility in this as well, right?

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Like, advertisers need to get closer to their publishing partners in order to foster and cultivate a higher quality audience. Yeah.

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If they're gonna be buying that audience, then they have to make an investment in the publishers to help do that. I think that's really important. Yes, but again, [laughs] I, I want this to be true. I really do.

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[laughs] At the same time, you know, like I... There's a bunch of marketers who will be coming to Miami next week for this giant event Possible in Miami Beach at the Fontainebleau. Mm-hmm.

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And a whole circus will arrive, 'cause, you know, once the, when, where the marketers go, there's like an entire circus around it of like ad tech- Oh, yeah... tech.

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Like, everyone is nipping at the heels of the marketing people, which is- Mm... kind of ironic, because marketers are, are kind of disempowered within the organization, but then when they...

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You know, I understand why they go to a lot of events, 'cause, [laughs] at the events they're like, you know, royalty. Exactly. Yeah.

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Meanwhile, they go back, they go back to the office and they've got the CFO being like, "This is nonsense." [laughs] So it's a push and pull. This is true. But yeah. The...

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Look, marketers pour money into these MFAs, all right? And then they act shocked.

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And the reality is they've set up all the incentives with their agencies, with their ad networks, et cetera, to look good on spreadsheets, and MFAs can look good on spreadsheets. And so- Yeah...

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it, it's turning a blind eye. It's not caring. Mm-hmm. It's, it performs.

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And I think that the, the pivot to, to performance has led to a lot of these things that I'm sure a lot of marketers will be on stage, uh, you know, saying how terrible it is, and I'm kind of reminded, I'm like, "But you're like literally just about the only people who can change that, because you control the money that goes into the system," and that is...

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People respond to incentives, and money is the number one incentive in any economic system.So kind of it's up to you to fix it. Like, and I just see them- Yeah...

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dodging it because when you have the money, you don't have to be accountable, you know? Mm-hmm.

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I mean, you have to be accountable to your bosses, but they don't have to be accountable to building a sustainable media ecosystem.

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So I want it to sort of change, but I also believe in incentives, and until they're in the incentives, I'm not sure it will.

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But on the publishing side, it, I think the incentives are absolutely [chuckles] shifting, whether publishers like it or not, to, I guess, what you would call intentional audiences.

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I've heard controllable, which I think intentional is better, to be honest with you. Yeah.

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And this is basically, at least the way I understand it, the era of, quote-unquote, "traffic" is clearly over, and a lot of that was just fly-by-night audiences that arrive through, through search or through social.

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This traffic, leave search aside, social traffic was always crap. Like, it was bad traffic. But maybe other people- Mm-hmm... saw different things.

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I saw on our, our analytics that, like, the social traffic was the worst traffic. People would arrive from Facebook and spend, like, 14 seconds there because we had written some, you know, brand fail social media post.

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These people didn't convert into newsletter subscribers, but they looked good on some spreadsheet because we said, "Oh, we have, like, a million, like, visitors a, a month."

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Meanwhile, like, our addressable market is not that big. But leave that aside. [laughs] So explain to me what this, like, shift to intentional audiences means. Yeah.

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It, it's a matter of really understanding audiences more like consumers of a product, right?

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The, the thinking that a product company establishes at the core of their strategy really comes down to understanding who it is they're trying to sell to, what is, what is their ideal customer profile, understanding those folks' jobs to be done and working to fulfill upon the needs of their, their customers.

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And in the world of publishing and media, those customers are the audience, right? The consumers of the content, the consumers of the information.

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And building a product that helps them meet their needs, first by understanding it and then fulfilling upon it and doing that over and over again, again and again, that is where the intention comes from, right?

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The intention to create something that's a mutually beneficial commercial relationship. Put simply, it's building something people are willing to pay for.

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And at the core of that is also a matter of, in the media space, recognizing that the consumer is ultimately the customer, right?

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It's not the advertiser necessarily, because all of the things that the advertiser has valued for many, many years, as you just pointed out, are... they're disappearing.

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The volume and the scale of it all is disappearing.

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So now it's really necessary to recognize that what isn't going away are the people who truly want the product, the people who truly use and value the product, and embracing them, building for them, and approaching them in such a way that you can foster and grow that audience, that intentional base of people, is really where I think the sustainability in this space is going to come from.

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It may be a smaller scale, but it'll be more valuable. And, you know, to your point earlier about, you know, valuing something for its ad density, you know, advertising will never go away.

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It has to exist in this space for sure, but we need to value it more for its, its contribution and its yield, less so its density and less so its impression count, right?

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So creating those sort of environments where the intentional audience is more valuable because they purchase the product, because it helps them solve a problem, and we can advertise to them in such a way that the advertising enhances that experience.

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It actually does create something more valuable for the end user at the end of the day.

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And that might sound like a crazy, a crazy concept to a lot of people, but truthfully, you look back in the history of media, and people did enjoy advertising in certain publications, right?

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It was a part of the consumption experience to understand who was advertising there and to, to... You know, that's part of what made advertising such a glamorous business, is it was an enjoyable thing.

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We've definitely moved away from that, but I do think that there's the potential with looking at intentional audiences and building for the human experience, we can come back to that edge.

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I'm gonna date myself, but in college, like, people had, like, the, the absolute ads from the back covers- Yes... of magazines, like, up on their walls. Yeah, exactly.

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Maybe this is just Providence College, but [laughs] they did. [laughs] Yeah. Well, it might, might've been Corona in other places, you know.

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[laughs] But yeah, I mean, you know, nobody's doing that with the retargeting display ads.

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I mean, perfi- I always say, like, performance marketing ate media, at least on the internet, and that has benefited, you know, those who have the most data and are most...

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You know, I covered direct marketing for a while. I understand how it works, and what the tech platforms are doing is, is direct marketing for the most part.

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They've just rebranded it as performance marketing in order to, I guess, attract people [chuckles] to, to the field who wouldn't normally go into direct mail.

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But I'm like, "What you're doing is, is not all that different, to be honest with you." And publishers- Mm-hmm... have always, you know, tried, uh, uh...

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Most publishers have found their comfort level higher up the funnel in brand advertising, and it's squishier, and it's about purpose and making people feel things.

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And, you know, the reality is, within organizations, mm, the CFO loves, uh, direct marketing because they love to put a dollar in and get $3 out. And that, you know, that expectation is there.

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And so for publishers with ad businesses, they gotta figure out how they can perform and how they can look just as good on a spreadsheet, because there's a lot of options out there.

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The reason-- There is a reason that retail media is exploding, and that is not just taking shelf-taker-like money. You know, that's the- Right... the, the money, the end caps, and all the, the weird in-store marketing.

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Mm-hmm. I didn't, I didn't delve too much into that, but sometimes I would stray into... that, that world with it has entirely different jargon Yeah, it is an interesting dynamic.

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I think you're absolutely right that there's, you know, this retail media space is where the budgets are gonna begin to flow to a much greater degree.

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It, it-- and the CFO, I think, will see that media investments of the past are not yielding the same sort of volumes that they were before, at least in the media space, right?

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So purchasing media that appears in the, in typical open web media environments is gonna lose its scale. Yeah. So that money needs to go somewhere or it goes back into the business.

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Retail media is, I think, where it will likely head because of this performance heritage that everybody's kind of coming from, this idea that we need to get a certain s- you know, ROI that's very directly measurable, and retail media can meet that.

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I'm hopeful, though, that there is an element of this return to the squishy side of things, this understanding of the, the brand value, and I do see that time prior to the performance marketing in the digital space, you know, prior to this becoming kind of the dominant perspective on things.

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I, I do see that time in which advertisers were investing in the publications that they're working in, right? Mm-hmm.

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I think they knew that the prices they were paying to reach those audiences were probably inflated, but the value is still there because there was so much more going on around it, and it was hard to necessarily connect one-for-one dollars invested versus dollars returned.

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I'm not suggesting that we go all the way back to that dynamic, but I do think that the, the pendulum can swing back in that direction in such a way that we can value some more squishy metrics that are not just ROI.

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You know, things that can contribute to ROI through the contribution of branding and familiarity, frequency, those kinds of tactics that media was often used for- Mm-hmm... not just the direct sale, right?

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So looking at things like attention metrics and valuing media based on a punt's ability to deliver attention, I think will hopefully move us closer to that, that era where we weren't so totally focused on ROI. Yeah.

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You know, I admit I was fully a part of that. You know, I started my career in digital advertising at iTraffic, you know, first digital agency. We pushed hard in performance marketing.

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The heritage of iT- of House of Kaizen is very much performance marketing, but we've evolved ourselves into really embracing more of that human experience, embracing more of the qualitative data, because we're finding in the work that we do day to day that there are much bigger gains to be had by understanding the human experience and adapting to the human experience versus just the minute optimizations that occur within the spreadsheets.

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You know, at the end of the day, spreadsheet optimizations find relatively small gains, and that's okay. You know, a small gain every day adds up, and there's a ton of value in that.

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But you also have to look at shaking things up every once in a while and doing something that's much more innovative and much more dramatic, and those kinds of efforts come from investments that are less directly tied to a one-for-one ROI or a three-to-one ROI, whatever it is.

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Yeah. Well, AI is gonna come and shake things up. I don't know if it is completely yet.

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There's so many different challenges that have, have popped up on the publisher side that are not related to AI, but AI is clearly... You know, I think a lot of the focus is on search, right? And look, I get it.

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If, if 60% of your, your traffic comes through search, you gotta focus on that. I, I just see the publications that are being started are not, for the most part, focused on a, an SEO strategy.

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Yeah, y- you gotta do that, and you, you, you don't have control over distribution. You can get some kind of control over it, but you're never gonna have...

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You're, you're always gonna be at the mercy to some degree of, of some distribution choke point.

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But I think the, the question ends up being how can, how can publishers adopt AI in a way that builds more sustainable businesses rather than constantly trying to play defense? Yeah.

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You know, I was having a great conversation with somebody recently about AI and its, the fairly aggressive adoption that we're seeing in newsrooms, and how it's really, quite frankly, I think just the opposite of the way in which publishers should be looking at embracing AI.

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Again, coming at it from an org-centric point of view.

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I think if instead of looking at how AI can be used to produce things faster and cheaper than humans do and in a way to replace potentially humans, we should be looking at how AI can improve the experience for the consumer.

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How can AI be used to create more value- Mm...

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for the consumer so that it actually inspires the organization, inspires the media company, or even the newsroom itself to create sort of superhuman product experiences or content experiences, something that starts with that human being but is made even better because of the application of AI.

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And it's only through looking at the, the consumer's experience, the users, and what it is that they value, what it is they're asking for from an AI-empowered experience that you can get there, right?

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Very few organizations are actually talking to their consumers and saying, "How do you want AI to improve your experience with our product? How much more are you willing to pay?

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How much more time are you willing to spend if this product were enhanced with an AI component?" That, I think, is a real missed opportunity so far. Now, not everybody's missing it.

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We're working with a couple publishers that are approaching it from that perspective, and the level of insight that we're getting by understanding the consumer's behaviors relative to their interactions with AI, what they're feeling about it, and how they're using it is really informing- Mm-hmm...

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the potential future development of the product. But it's, it's coming at it from the opposite direction of what we typically see news organizations and media organizations doing. Yeah.

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So what are you seeing that, that can...

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Because I find this, I find it both a very attractive topic and a very challenging topic, and it, and it's attractive because it's like there's so many unknowns, you can go in like a million different directions, and it changes- Mm-hmm...

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so fast that nobody's gonna hold you accountable, and I like that. But it's challenging because it's, it's so theoretical to some degree at this, at this level.

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I don't see the applicationOf AI in, in ways that aren't just either like marketing speak. It's like, "Yes, we use AI." Like, I mean, yes, okay. Every single [chuckles]

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every single one of-- every single vendor out there all of a sudden, yeah, you use AI.

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I'm with you on creating better experiences and not just looking at it as a way, as an- yet another efficiency driver, 'cause the way, the way I've been seeing it implemented is like the way like a private equity firm would.

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No offense to the private- Mm-hmm... equity firms out in my audience. I love you all. But if you just use this as an, a yet another efficiency tool, I don't think it's gonna...

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It's not gonna put a dent in creating a more sustainable media ecosystem. So what specifically can- Totally... do, do you see publishers being able to do? I understand it when you have unique data sets, right?

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If you have a unique, unique data sets, you can use AI in order to produce some pretty interesting and valuable experiences and insights for your audiences. But what are some other ways?

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Because I don't think we know yet. For instance, like AI chat, like I don't know if, if chatbots are gonna be the way that we interface with these things. I still find it clunky and weird. Yeah. Well, you're right.

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It does start with, you know, what's unique about the content or the information that you have to offer.

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Because, you know, otherwise, Gemini and ChatGPT and Perplexity have already swallowed up and are regurgitating everything else, right? Mm-hmm.

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And people are beginning to build habits around going to those environments for rather generic content. Yeah. So the race for producing generic content- It's great for mediocre stuff. Yeah. Yeah.

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And, and look- Yeah, exactly... I, I don't mean that as like a total knock because, uh, um, hello, like 80-plus percent of the stuff out there is mediocre. And- Mm-hmm...

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even those of us who think we're creating like unique, differentiated stuff, a lot of our stuff is mediocre. So it's gonna be [chuckles] trust me, I'm not like saying this as, as, you know, in celebration. Yeah, exactly.

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Well, and that's the nature of generative AI, right? It gravitates towards the, the means and the averages. Yeah.

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So by default, it's better than half of everything that's out there [chuckles] but it's not as good as half of what's out there as well, and I think that's an important consideration for content producers who truly have something that's unique and a valuable point of view that they're bringing to the table that no one else is in using generative AI to capitalize on that full library of that perspective.

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There's so many ways that we don't yet know, but we do need to experiment around enhancing the experience of consuming that unique point of view, consuming that, that niche perspective, whatever it might be.

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And, and I would agree, chatbots are not the ultimate manifestation of this interface.

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It's the first kind of approach to this, keeping in mind that we're all coming at this from the perspective of our search experiences.

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But I don't think that search experiences are necessarily gonna drive AI interfaces forever. I think it's the way people are looking at AI interfaces now. It's just the next manifestation of search.

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But we won't just be asking questions of AI. It'll be serving us much more proactively in the future, and it'll be giving us more, more perspective on the information that we're- Mm...

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seeking, rather than maybe drilling in so deep, or maybe it's doing both.

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We don't yet know, but I do think that, to your point, it has to start with the most valuable and unique content environments and pre-presenting experiments around how people can engage with something that's valuable in that way, in such a way that it makes it even more valuable, right?

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It makes it something that the consumer sees as unique and different that they're getting only here, and therefore, they'd be willing to either pay for it more, or they'd be willing to engage in it much more frequently.

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You know, one of the things that we're seeing with the publishers that we're working with as we study how their audiences are using their AI interfaces, we're seeing a couple interesting things.

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One is that people aren't necessarily engaging with it as much as we thought they would, right?

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So there's a lot of hype around this technology for those of us who are in the business and in the industry, but generally amongst consumers, it's not such a big deal, right? No.

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They're, they're more, you know, slower to adopt these things.

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So the realism around- That nihilism that Dotdash Meredith is telling me is like, he's like the proportion of Bing search has actually gone down w-with AI, not up. Right.

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And I think I was at a dinner, and actually a private equity executive [chuckles] he, he, he told me... He's one of the good guys, though. Not like the other private equity guys. He was like, "Yeah."

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He's like, "I hear you on all this, like, AI stuff." He's like, "Do you know how long this stuff takes?" [chuckles] And he was like, he was like, "AOL is still a $400 million in EBITDA a year business."

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He's like, "People's habits don't change overnight." [chuckles] I'm like, "Good point. Good point." Yeah.

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I think, I think there is an element of, of those of us who are kind of at the tip of the spear of all of this recognizing that there's a whole lot of change that's going to follow the perspectives that we're developing, without a doubt.

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At the same time, this specific technology is changing fast- changing things faster than any prior iteration in the media space, any prior technology innovation or iteration of whatever else we've seen in the, in the media space.

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And we have watched time and time again- Yeah... as people have had that conversation with like, "Oh, the internet's not really a thing. Who's gonna consume a newspaper article on their telephone?" Yeah.

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So we are, we are the ones who are responsible for sort of shepherding the masses into an environment that is ideally better than the one they're in right now. Yeah. We have to experiment. We have to test it all out.

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We have to recognize that it may not move as fast as we want it to, but it will probably move faster than most of the other people expect it to.

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And so there's, I think, this, this recognition that when we do the research and we find that people aren't using it as much as we maybe assumed that they did, that's one thing.

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But the other thing is recognizing what effect it has on the things that they're using it for. It is actually increasing engagement.

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It is actually making people feel like they're getting more value out of it when done in certain ways. So I think there's a lot in this sort of...

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Like we were talking about this before, this, this complex sort of messy environment of understanding how human beingsInteract with things and how they extract value from those things there is so much potential in this specific moment to really understand that and to build around it by testing and learning and adapting very, very quickly so that, that's what makes me excited.

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I do think that there is a ton of potential in that.

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For those, those publishers that are willing to experiment and make those investments, who see themselves with a long-term future I think there's a ton of potential here in this very moment.

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The short-sighted folks, unfortunately, I think, are gonna try and squeeze as much as they can out of this, you know, this current traffic decline, and, and I think they're gonna end up missing the boat, quite frankly.

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Yeah. I don't know if you saw this, but Jim VandeHei, who I've always found to be a, a very perceptive both thinker and doer in this space, and also he doesn't hide behind, like, euphemisms, which I really appreciate.

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[chuckles] Mm-hmm. He, he had come out, he, he... You know, they're changing a few things up at, at Axios.

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But one of the things that he was, he was saying in this Times article is that we're in the middle of a very fundamental shift in how people relate to news and content, and it's gonna be as profound, if not more profound, than moving from print to digital.

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Fast-forward five to 10 years from now, and we're living in this AI-dominated virtual world. Who are the couple of players in the media space offering smart, sane content and we're thriving? It damn well better be us.

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And, you know, I think w- when you unpack what they're doing in response to that, a lot of it is leaning into things like events. You know? Jim said that, like, event, events grew 60% year over year in 2023.

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Introducing really high-priced membership programs around individuals, I think that is an opportunity that certainly exists out there, because I think when, when AI is commo- it's gonna be a great commoditizer.

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And, and if you're producing commodity content, it's by definition mediocre. It's designed to be mediocre, right? And a lot of the internet economy and the internet publishing economy has thrived on that kind of content.

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Evergreen content is usually fairly mediocre, it is also extremely profitable. You pay to create it once and it keeps... You keep extracting value. Maybe you update it a little bit. Mm-hmm.

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News content or, like, you know, a really creative feature or something, you know, the, the value plummets. It was never that high to begin with.

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So if anyone's wondering why there's so much commerce guides out there, I mean, it's just the math. Blame math. Mm-hmm. But the human element is definitely part of it. I harp on this a lot.

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The part that I wonder about is how larger companies can pull that off. You know? Like, the platforms, they want a mass of, quote-unquote, "creators," of individuals, right? You have a lot of leverage.

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I mean, I know this with, with what I'm doing. You know, I have a lot of people help me out.

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But, you know, being able to stay super lean and nimble is, like, a tremendous leverage in the marketplace versus having all of those fixed costs of, of people on staff.

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And I wonder how institutional companies will make that leap. Yeah, it's a great question. I think it's a really great question.

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And I, first of all, I just wanna say that the idea of blaming math for all of this is fantastic. [laughs] Yeah. I'm a lover of large math. I'm gonna use that again and again. I love it.

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Yeah, it's, uh- You've got a yes and hat on. I, I'm gonna have a blame math hat on the ne- on, on the next one. [laughs] Please do. 'Cause anyone who says, "Oh, this sucks," it's like, "Well, blame math."

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Blame math, absolutely. Yeah. No, math has obscured the human connection. And the other thing that VandeHei said was that it, it is about digging into the human connection, right?

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Whether that's in events or, or whether that's through the, the digital products, right?

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But putting that human connection at the core is a really important tenet to the strategy that he just laid out, and I don't think that we can overlook that.

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So, so events, yes, they are harder to scale than any sort of digital experience, but the question is, how can you build in what's valuable in events in a larger scale digital environment? I do think it's possible.

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I often think about the fact that these platforms, that news media or media in general are increasingly seeing now as the enemy whereas previously they were the ally, right?

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Th- these platforms did something that news media had the opportunity to do, right? It had the opportunity to communicate with masses in such a way that it feels more individualistic, it feels more authentic.

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You know, these platforms allowed individuals to create content and distribute that content in such a way that it almost feels like people are speaking directly to you, though that message and that experience is being delivered to hundreds of millions of people, right?

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Media companies continue to operate in a format in which they delivered their experiences and their messages in such a way that it was a one... It was always meant to be, like, a one-to-many.

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It was perceived as less authentic as social media is, perceived as less connective, and requiring a lot more of investment versus just, like, a, a, a brief sort of interaction.

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And, and the question is, how has that expectation of what these experiences are like in social media perceived to be more human, right? How can that be brought into these, these more traditional media experiences?

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Axios kinda did this, right? When they were the first to introduce their shorter format content, they kind of adopted a lot of these principles that we're just talking about, and they brought it into the news space.

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I see this as an extension of that.

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How, how are they going to adapt further into meeting the consumer's expectations for what a truly authentic and human interaction is by just simply changing and optimizing that sort of interface experience? Yeah.

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I mean, I... Yeah, you actually make a great point. I used to, I used to poke fun at, at the Axios format innovation being bullet points, but I think the, the more profound thing is they took the audience's viewpoint.

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A lot of the B materialAnd throat clearing in the typical news story. And, and Jim got this like immediately. It was like most of this stuff is not new or pertinent. Nobody gives a shit. It's just- Yep...

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it's being done to fill column inches they would say at the time, but also because, you know, the writers wanna write whatever. And so they came up with a very concise format, smart brevity- Yep... R in a circle.

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And to me it's very audience-centric because- Mm-hmm... when I read it as a, you know, as someone in this field, I'm like, "Oh God, this gets so dull and repetitive." Yes, but- Yeah...

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I'm like, "Okay, you're just shoving this stuff in the format." But the reality is it, it is a scalable way to give people what they need as quickly as possible. That is very...

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That's catering to the audience at the end of the day. Exactly. Yeah. You know, the, the... I think the standard rules, and I revere journalism. I have a ton of respect for journalists.

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My perception of the craft is that it, it hasn't changed to the degree that it could have, that there's a, there is a desire to preserve the quality of the craft of journalism, which is incredibly important.

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But I think what Axios did really well is they, they adapted it in such a way that it met the needs of the audience better than something that hasn't changed for so many years.

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I think they're more willing to still stand on what it is that makes quality journalism, while also shedding the elements of, of it that are no longer necessary, that just don't work in the context of the world in which we live in today, where people want a lot more information a lot more quickly, get to the point, you know, lead with the lead and then move on.

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And so yeah, I think, I think that's the key there is that they seem to understand, and I love what they're doing. They seem to understand that there is real value in adapting to the expectations of the audience.

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That's being intentional in my mind. The other thing that they're doing, which is fantastic, is they're leaning into subscriptions even more.

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So we've heard a lot recently about how some folks are moving away for sub- from subscription or, or believing that subscriptions are no longer the future.

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And while I wouldn't ever argue that subscriptions are the only way, it does require a balanced portfolio of revenue sources for media companies to be sustainable.

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I do love this example of Axios leaning further into subscriptions as their way into the future.

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I think again it just leads to this idea of building more intentional audiences and building products that people are willing to pay for. Yeah. I mean, to me subscriptions are, I don't know, like a consequence.

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They're a consequence of being audience-centric, right?

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So if you, if you reorient yourself around an audience and be like, "Okay, we're gonna be audience-centric, audience first," however you wanna describe it, that leads to subscriptions.

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But it now can also lead to a different like direct sold business. It can lead to commerce. It can lead to event. There's lots of different... But I-- There's lots of different ways that manifests itself.

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Subscription is just one aspect of it, and I feel a lot of times people were saying, "Okay, we're gonna add a subscriptions element." But it's like, no, that's a consequence of being audience-centric.

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Do you know what I mean? Yeah. I, you know, I think when you start with something that people- Like you can be audience-centric and not have subscriptions, and you can be subscriptions and not be audience-centric.

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[laughs] Yeah. Uh, yes. Not all rectangles are squares, but all squares are rectangles. [laughs] Blame math. You know, I, I think when you start with subscriptions though you are inherently more audience-centric.

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I think that's what you're saying, right? Like when you start with subscriptions or you lead with subscriptions, you have the ability to be more intentional with your audiences. You know them better.

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You understand them better. You're collecting more first-party data. But as a result you're able to better cater to that, you know, what we call in the product world the product market fit.

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You're ade- you're able to better adapt what it is you're providing to the consumers to ensure that they wanna continue to buy it and that that value equation exists sustainably.

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There was this great interview with Jason Fried from 37signals recently where he was talking about the concept of the minimum viable product, and he was saying it's kind of, kind of a silly idea because what we're looking for is not necessarily something that's min- minimally viable.

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We're actually looking for something that's minimally buyable. Yeah. We need to create something that people are willing to pay for.

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And then when you've cracked that nut, you have the opportunity to really build more and more value. I used to...

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I, I'm laughing because I used to hear the MVP be thrown around as like an excuse for not spending any money or for something being shitty by design. [laughs] Yeah, exactly. It's like, "Oh."

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I've heard like, "This is awful." It's like, "Oh, it's an MVP." I'm like- [laughs] "... Oh, okay then. It's fine. It's fine." [chuckles] Right.

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But if we hold ourselves to the standards of creating something people are willing to pay for, it changes everything. Yeah, for sure.

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And I, I guess what I was thinking about is like you can have subscription programs and be completely... not completely, but you can be very antagonistic almost to the audience, right?

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I, I keep harping on the call to cancel stuff.

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I mean, don't tell me you're audience-centric a- and then tell me that I have to call between the hours of 9:00 and 4:30, uh, Central Time in order to cancel a service that I signed up for on the internet.

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You can clearly process this. This is twen- 2024, yeah? 2024. Mm-hmm. Yeah, you can- Mm-hmm... you can do that.

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And that's why we've talked a lot about like when you get into optimization land, a lot of people end up going into adversarial tactics. Adding more friction absolutely will lower your churn rate.

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If you require- Mm-hmm... people to show up at your doorstep in order to cancel, you will have fewer cancellations. [chuckles] Mm-hmm. Yep. I've sat in those meetings. Everyone has sat in the meetings.

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Like can we add a little friction? And like- Mm-hmm... yeah, it's very tempting to add friction to...

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One of the things that came up at one of our dinners, I wanna get your take on this 'cause I think it's AI related in some ways, is around dynamic pricing with subscriptions, right?

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The discussion revolved around whether that was really audience-centric and how it rubbedSome people the wrong way, this idea that you're going to be crunching the data and giving different offers to different people.

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Like, I mean, there's always some aspect of it, but when it gets scaled and when you apply AI to it, you can imagine it... I don't know.

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What is your take on dynamic pricing as, as a strategy, like, on, on a, on an individual level? Because some people say, "Look, I-- one person's dynamic pricing is another person's price discrimination." I don't know.

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[chuckles] Yeah. I think there's, there's two ways to look at this, you know, from, from opposite perspectives that are equally fair.

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One is, you know, from a consumer point of view, if I were to find out that the price I'm paying for the exact same product that my buddy is also buying and paying half the price for, I'd feel, I'd feel screwed.

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I'd feel like that's not fair. And in the consumer world, people generally come at it from that point of view. In the business-to-business world, it's a little bit different, right?

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I think businesses recognize that they pay different prices for the same product than other businesses do, but people generally pay the same thing for the same product as anyone else might. So- But not airline tickets.

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That context- The person sitting next to me is paying a different price than I'm paying. Yeah, that's a great point. That's a great point.

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So, so that gets to the other side of the perspective, which is this concept of value-based pricing.

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If the person's willing to pay for it, regardless if it's more or less than the other person, then why does it matter, right?

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If they value the dollar amount that they're exchanging for the product and they're okay with that transaction, then fair game. That's great. There's no problem in that.

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But I think where-- the way I look at it with regard to dynamic pricing in the, the case of media is that I really wonder how significant the gains truly are, to be totally honest with you, right?

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Because what we're typically talking about in this case is that we're trying to maximize the price paid by the most loyal customers. Again, that sounds kind of dirty, [chuckles]

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but in truth, the most loyal customers are also generally, like, a very small segment of these businesses right now, right?

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So if we're really trying to maximize the value that we get out of this segment, how much are we really contributing to the bottom line? Is the, is the...

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I hear this phrase all the time in this space, but is the juice really worth the squeeze?

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I think that's the question that needs to be asked about this tactic because the reality is that it may be much, much more ad-advantageous to again be focused on building a product people are willing to pay for, enhancing that experience to the degree that they're willing to pay more and more for that product versus just trying to get a bigger slice of a shrinking pie.

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Yeah. Let's look at growing the pie overall. Yeah. Amen. I, [chuckles] I used to have meetings where everyone's talking about all the kinds of crazy optimizations we could do to squeeze, like, an extra two percent.

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I'm like, "How about, like, we stop this meeting, I go and try to help a bunch of other people create better content 'cause that's [chuckles] gonna make a bigger difference?" There it is. Yeah.

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And that, that to me is just, like, just another example of how, you know, we all kinda have to recognize that so much of what we try to do to make our businesses better is derived from an organization's, organizationally centric point of view, right?

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It's a hell of a lot easier to apply dynamic pricing to eke out a couple extra cents or dollars from certain customers than it is to rethink the product altogether and to better understand the audiences and their jobs to be done.

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So we tend to default towards those sort of knob-spinning and lever-moving tactics that seem to show performance on a spreadsheet versus actually doing the work of understanding the audience- Yeah....

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understanding the consumer, understanding their jobs to be done so that we can better meet their needs. Yeah. It feels more complicated and harder, but it's, it's where the bigger gains will come from- Yeah....

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especially as we move into this next era. And just a final point on the audience point. And, and it's important to understand that it's not like a monolithic audience. There are- Yes.

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There are different segments of the audience that have different needs, and they have different jobs that you have to do for them.

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So I mean, just a simple thing to me is how do you create products that accomplish those jobs for different segments?

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And you have to start by understanding those segments and understanding what their needs are and how you can fulfill them. And obviously, you have to have a, a coherent product.

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You can't have a trillion different variations on it. But to me, that, that is a very basic thing that, that publishers need to start with. Yeah, I completely agree.

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You know, and again, looking at the product world for inspiration and examples of how important this is, earlier today, I learned of this, this application for the iPhone and for the Apple Watch that's used to track walks when people are pushing strollers, right?

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So if you use Apple Fitness at all, it's really interesting to see all the different activities that you can record, that your watch is programmed to measure because it, you know, measures your arm swing as you're walking or as you're running.

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But when people are pushing strollers and their arm is not swinging, it's not tracking their watch. It's not, not tracking their walks as accurately as it should be.

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So somebody developed an app specifically designed to track walks while pushing strollers, right?

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Now, you might think, "Oh, that's crazy niche," but at the same time, why not think about the fact that Apple thought of almost everything already? Yeah.

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But they didn't think of this thing, and it took an understanding of the users and the community to recognize where this gap exists, and anybody who's ever marketed to the parent segment will tell you that this is no small gap, right?

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This is a huge opportunity. Yeah. So- I don't know how defensible the app developer's [chuckles] market is gonna be because Apple is gonna be like, "Oh, that's a great idea." Yeah. Yeah. Swipe. That looks good.

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Thank you. Appreciate it. Yeah, no doubt.

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But I think it's just a really great example of the fact that when you think you know your audience already, there are opportunities lurking in the shadows that should be sussed out.

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So, you know, we, we often talk about how it's great to look at dashboards of data. We've all become accustomed to this high-velocity quantitative data that we can use to optimize the performance of our businesses.

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And in looking at that, we've, we've overlooked the fact that the qualitative insights and really understanding consumers' experiences, it just doesn't get the attention that it deserves.

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And fortunately, we live in a world today where we can gather that human intelligence almost as fast and almost as cheap as the quantitative intelligence that we have.

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So we should embrace that, that feedback loop as well. We should make that a part of our thinking, make that a part of our process.

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In fact, we should lead with that first so that we can begin to find new opportunities to unlock new growth to better serve the needs of our customers through that intelligence.

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That, to me, is where we're moving forward. And as, as things become more automated, more robot-driven, that connection to human beings is gonna be what's most valuable and most sustainable over the long term. Amen.

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Awesome, Matt. Thank you so much. Really appreciate the conversation, and I look forward to our future ones. Likewise. Thanks, Brian. Cool.

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