WEBVTT

1
00:00:00.220 --> 00:00:09.320
So let's talk more about this mission-driven publisher. I like this as a framework, right? But the old me would be, like very cynical about this and skeptical and push you, Howard.

2
00:00:09.380 --> 00:00:18.140
But I'll dip into this a little bit because I'm trying to be more optimistic- Right... these days. But how is that- This is the new... This is the Miami you. [laughs] Yeah. Yeah, this is the Miami version of me.

3
00:00:18.240 --> 00:00:27.130
Um, I mean, it was seventy-five and sunny this morning- Yeah... and I just went on a, on a run along the, the water. It's amazing. It's hard to get in a bad mood. But explain to me how this is- Yeah...

4
00:00:27.180 --> 00:00:44.660
any different, right? [upbeat music] Welcome to the Rebooting show.

5
00:00:44.700 --> 00:00:54.020
I'm Brian Morrissey. I appreciate all the notes and the ratings and reviews on Apple. Please do leave one if you're feeling generous. Thank you to Trip F., who left a very nice review.

6
00:00:54.060 --> 00:01:04.220
He went all caps, called this a great show, and then added, it was, and I quote here, "Highly enjoyable, timely and nugget-rich." Thank you very much, Trip. So if you do have a chance, leave a review.

7
00:01:04.260 --> 00:01:13.920
They're always fun for me to see, and supposedly they help people find the podcast. This week, I'm talking to Howard Mittman, um, who I frequently turn to for his perspective on where the m- media business is going.

8
00:01:14.340 --> 00:01:25.320
Um, Howard was the CEO of Bleacher Report and a longtime Conde Nast executive. Howard, welcome to the show. Thanks for having me, Brian. I appreciate it. I, I- Yeah...

9
00:01:25.360 --> 00:01:33.340
I feel like I'm what happens when you have to start booking your own talent, you know? [laughs] No. That's not true at all. What are you focused on now, right now? Like, you're doing the consulting thing?

10
00:01:33.520 --> 00:01:36.300
What are you doing? Doing the consulting thing, yeah. That's been fun.

11
00:01:36.360 --> 00:01:46.660
I have a handful of private clients I'm working with, and, um, a lot of, lot of strategy work, obviously some in and around revenue, some in and around corporate branding, and a decent amount of sports betting conversations.

12
00:01:46.680 --> 00:01:53.620
So that, that's been keeping me pretty busy. Yeah, it's always good when you're fighting day to day. So give me your sort of overview, 'cause it...

13
00:01:53.830 --> 00:02:05.980
I, I've written a lot about how I feel like we're at, like, a bit of an inflection point when it sort of happened, but we're moving to a new era when it comes to digital publishing in particular. Yeah. I, I think so.

14
00:02:06.020 --> 00:02:20.460
I mean, I, I think our lives, n- not just publishing, but our lives will be defined by pre- and post-COVID. That seems pretty clear. And if you just think about the arc of Twitter conversation, right? We've gone

15
00:02:21.540 --> 00:02:33.200
in and out of a number of bubbles over the course of COVID, all that seem to propagate and be proselytized [laughs] on Twitter. Um- Yeah... NFTs. Clubhouse was a really big thing for a while.

16
00:02:33.340 --> 00:02:43.680
Um, the creator economy was huge, now we're reading about burnout. Um, I, I, I think it's, it's fascinating to see how that's happened, and I think it's, it's interesting for me because I,

17
00:02:45.060 --> 00:02:54.000
while I know that, you know, the middle class and everything is being pushed to the margins, um, I think we will find ourselves returning back to the middle.

18
00:02:54.060 --> 00:03:17.540
And when I think about publishing, I think about, um, purpose-driven versus mission-driven, and I think, uh, purpose-driven publishing is about ad dollars, and it's about collecting affiliate revenue, and it's about sort of like filling a gap and a need that consumers have based off of a Google search or a quick flick through social media.

19
00:03:17.620 --> 00:03:29.500
I think mission-driven is where I'm most interested right now, and I think that is... You can see that happening around things like the environment. You can see that happening around news.

20
00:03:29.510 --> 00:03:41.910
L- Look at what the Smiths are doing. Y- You can see that with Defector. And I, I think those brands that have mission and that have... are figuring out that I don't think everyone wants to be a creator on their own.

21
00:03:42.180 --> 00:03:49.600
I think there's a lot of people, really talented people, who want what I call upside with dental insurance, you know? Yeah.

22
00:03:49.620 --> 00:03:54.640
They just wanna be able to participate in, in the upside, but they don't wanna have to do everything on their own.

23
00:03:54.860 --> 00:04:07.880
And so I, I think some of those mission-driven publishers, to me, that are emerging, have emerged, will continue to emerge, will find a really nice niche outside of the aggregate affiliate world. Yeah.

24
00:04:08.260 --> 00:04:17.260
So let's talk more about this mission-driven publisher. I like this as a framework, right? But the old me would be, like very cynical about this and skeptical and push you, Howard.

25
00:04:17.420 --> 00:04:25.980
But I'll dip into this a little bit because I'm trying to be more optimistic- Right... these days. But how is that- This is the new... This is the Miami you. [laughs] Yeah. Yeah, this is the Miami version of me.

26
00:04:26.280 --> 00:04:35.219
Um, I mean, it was seventy-five and sunny this morning- Yeah... and I just went on a, on a run along the, the water. It's amazing. It's hard to get in a bad mood. But explain to me how this is- Yeah...

27
00:04:35.240 --> 00:04:43.240
any different, right? Because people would slap missions on... Anyone who's been part of a mission statement exercise knows what a freaking disaster it is.

28
00:04:43.460 --> 00:04:54.640
I mean, none of them, none of them are actually, uh, generally- Yeah... mission statements or are grammatically correct sentences because they're, they're made with, like, 30 people's input. Word salad. Yeah, for sure.

29
00:04:54.650 --> 00:05:01.340
[laughs] But explain to me, what are the structures of a mission-driven publisher beyond saying, "Hey, we wanna solve this problem"?

30
00:05:02.200 --> 00:05:14.140
I think there's a lot of room and space right now, I think there's a lot of people rooting for news, objective news, local news to come back.

31
00:05:14.620 --> 00:05:27.890
And I, I think a lot of people, particularly in and around media and marketing, advertising, recognize their role in, in pushing us maybe perhaps to where we are and maybe even recognizing the ability to help save us.

32
00:05:28.420 --> 00:05:37.330
Applebee's was the latest example [laughs] on CNN. Yeah. Right? I, I don't know how that ad got there. It may not even have been bought on CNN.

33
00:05:37.380 --> 00:05:44.560
It could have been bought as a larger corporate cluster that filtered down to, you know, fulfill some sort of, of ad target. I have no idea.

34
00:05:45.080 --> 00:05:51.640
But- And just to jump in, that ad was bas- basically, there was a split screen of Applebee's with the invasion of Ukraine.

35
00:05:55.680 --> 00:06:09.212
[sirens wailing] [upbeat music] And a little bit of chicken fried.Get five bonus wings for $1 with any handcrafted burger. Only at Applebee's Right.

36
00:06:09.292 --> 00:06:21.952
So when that happens, I think that's the ultimate example of the challenges that news and information have right now as a business that is to be supported by advertising, you know.

37
00:06:22.052 --> 00:06:36.951
Um, how do you protect your brand if you're a marketer from being put in that situation while also supporting quality journalism? It's a conundrum. I don't know that I have a problem for it. I mean, I think back to like

38
00:06:38.552 --> 00:07:12.972
how many make good conversations I've had in my career, and I, I, I hope, I think that some of these modern publishers, I think Puck is a great example of one, I, I'd like to believe, I think what The Smiths are, are gonna be building will be another, um, have a chance to reinvent news and information and do it in a, with an ambition, a, a sort of level of quality and a level of objectivity that we, we don't get to see when you're chasing scale, which is sort of where most of the major players are right now, unfortunately.

39
00:07:14.012 --> 00:07:26.472
Yeah. So let's unpack that a little bit 'cause you talked about, and I think we both maybe feel this, is like that a lot of news publishers have sort of gone to extremes, I feel like. I think it's just because it's...

40
00:07:26.502 --> 00:07:36.882
Some of it is just, it's audience driven, right? Like, when you follow the audience, like, our society is more divided, like, than ever, and fewer people seem to be playing between the 40-yard lines.

41
00:07:36.902 --> 00:07:47.472
[laughs] Everyone's in the red zones, literally, on both sides of the field. Yeah. Right. Um, it'll be interesting to see whether... I mean, I, I believe that we're go- Red or blue, I suppose. But Yeah.

42
00:07:47.572 --> 00:07:58.522
I, I think we're gonna end up having, like, a, a return to, like, the middle because everything can't be extremes. That's the hope. I mean, I, I think a lot of this,

43
00:07:59.752 --> 00:08:05.692
to me, comes down to the gaps, the major, major gaps that exist in local news coverage. Yeah.

44
00:08:05.752 --> 00:08:31.392
In an era where the biggest and most traditionally most important city-based newspapers, like the Times, The Wall Street Journal, The Washington Post, have seemingly just abandoned geography or geographically oriented focus for national platforms, I, I think the wider subscription base which comes with it, I, I think, you know, the market is, is wide open for local news, and the long slow death and hedge fundification of newspapers is not helping.

45
00:08:31.552 --> 00:09:07.332
But I do honestly think that there is something out there outside of the Patagonia-clad finance bros, and I do think that, um, and I hope, I believe that we're, we're gonna see a, a reemergence of, of interest in local news coverage, and I think, I hope that brands, I think Axios is doing this, Patch has been trying to do it for a while, um, wi- wi- will recognize the, the sort of opportunity inherent in building, fostering verticalized local community s- and then assembling, um, you know, opportunities to sort of hit them up nationally.

46
00:09:07.392 --> 00:09:18.092
And- Yeah... it's, it's no different than maybe Si Newhouse did 75 years ago, right? Or his father did 75 years ago, and he did 50 years ago. But I think we're starting to see it, and I, I really...

47
00:09:19.772 --> 00:09:32.812
Someone has to hold power accountable on a local level because there's too many important things that happen, um, that go unchecked and uncovered. And I, I, I'm pretty optimistic about, um,

48
00:09:34.972 --> 00:09:48.822
the resurgence of, um, of local news and the ecosystem, and I think that more coverage of school board meetings and city council meetings, particularly with what you see going on in your new home state of Florida or Texas, these things matter.

49
00:09:49.002 --> 00:09:57.992
And without local journalists holding them to account, we, we will see less and less incentive for some individuals to do what's right to represent their, their citizens.

50
00:09:58.372 --> 00:10:10.292
Yeah, I see it up close here in Miami, in the, the Herald, the Miami Herald has a storied history, right? And, um, and they still do some great work, but McClatchy has gutted it as far as I'm concerned as a consumer.

51
00:10:10.572 --> 00:10:19.222
Just a mile north of me, the Champlain Towers collapsed. That should have been uncovered well before. Yeah. That shouldn't have happened. I don't know if you can tie it to the demise of local news- Right...

52
00:10:19.232 --> 00:10:20.842
but that's the price you end up paying.

53
00:10:21.112 --> 00:10:31.371
It required The New York Times in retrospect to do the reporting that should have been done ahead of time about how all these buildings, not all of them, but many of them, are so overdue on maintenance that they're dangerous.

54
00:10:31.652 --> 00:10:41.512
And that was never done, and I think that's a direct result of the lack of investment that's gone on as private equity has taken over this industry. Yeah.

55
00:10:41.672 --> 00:10:51.692
I just don't know if the existing players are gonna be able to do it. And then I do have some skepticism that people operating an aggregation newsletter are, are not going to the school boards, but it's a start.

56
00:10:51.732 --> 00:10:59.992
It's a start. And I think, look, we, we live in a world where all politics are still local, but all news coverage is national. And I, I hope there's a compromise.

57
00:11:00.022 --> 00:11:09.222
I believe there is a sort of subscription-based compromise. I suspect we're getting closer to finding it. I, I also think, I'll throw something else out there that- Okay...

58
00:11:09.222 --> 00:11:18.252
I, I've been sort of kicking around, is I don't know that local journalism is, is always going to be defined in its most traditional form.

59
00:11:18.312 --> 00:11:24.012
Like, a, a concept I've been thinking about ruminating on [chuckles] a lot lately is, like, the future of local journalism,

60
00:11:25.112 --> 00:11:34.872
it, it may not simply be about local news and information, and maybe local journalism is about decreasing the proximity between the content creator and the reader, right?

61
00:11:35.032 --> 00:11:46.752
Like, maybe in a paid newsletter-driven ecosystem, you can create local means, how close you can get to the actual creator. And again, Puck and others- Yeah... are, are doing that. I think

62
00:11:48.372 --> 00:11:56.512
it, it, you know, look at like even like the podcast system, how many have evolved into live events, right? Where those live events have e- evolved into salon style convos.

63
00:11:56.552 --> 00:12:09.692
Those convos then reduce the friction between the creator and the user, and I think those direct connections people will pay for in pretty intense ways if you have the right talent, if it's, you have the right sort of topic matter and the right sort of credibility.

64
00:12:09.732 --> 00:12:15.968
So I, I think all of those things are happening at the same time. To me, those are the most interesting things going on.Yeah.

65
00:12:16.828 --> 00:12:25.368
S- so let's talk about the, the creator economy for a little bit because I think I mostly agree with you in that everyone goes to the extreme, and Sub Stack is sort of the extreme, right?

66
00:12:25.508 --> 00:12:37.308
It's like people breaking off, going on their own, doing it all themselves, charging money, even though you can run ads. I run ads. But it's mostly subscription focused, and that's the extreme.

67
00:12:37.368 --> 00:12:41.418
And then, of course, people say, "Well, people aren't gonna do that," and stuff like this. But

68
00:12:42.368 --> 00:12:51.928
I think it speaks to a trend of trying to reduce that distance between the people formerly known as the audience and the person who is informing them. Mm-hmm.

69
00:12:51.938 --> 00:13:00.008
And I think, to me, the big opportunity, that's why Puck is really interesting. I d- I do some work with Puck. They're trying to take the best of both worlds, right? Yeah, I think so.

70
00:13:00.048 --> 00:13:10.408
There's a lot of pricing inefficiency in the creator economy. You, you, you can't pretend that there's not. There is. You have to really value the writer in order to pay for it.

71
00:13:10.588 --> 00:13:26.208
Imagine subscribing to The New York Times print edition and receiving an entire universe of coverage, whatever you think of The New York Times, but an entire universe of coverage for $3 a day, or subscribing to a Sub Stack of your favorite local writer or just favorite writer

72
00:13:27.328 --> 00:13:32.418
for a hell of a lot more money than that. Like, it's... Some of it, it... You have to be specialized.

73
00:13:32.528 --> 00:13:44.068
I think the thing that, like, Puck has done a really nice job at, and I g- give John and, and his team a lot of credit, is they've found areas to focus on that people are willing to pay for, you know? Hollywood, right?

74
00:13:44.078 --> 00:13:55.528
That's a great place to focus. Business of Hollywood, you know? Um, y- y- if you, if you find the right target audience, I think you can sort of, like, build out from there, and you can build that base.

75
00:13:55.568 --> 00:14:10.528
I think they've done a really nice job of it. That's where I get a little worried on broader news products. Um, and I get, you know, a little worried about the high barrier to entry for news, paid news products.

76
00:14:10.668 --> 00:14:19.588
Are we really just making it easier for QAnon to feed the masses when [chuckles] you have to pay $9 a month to read someone who has a measure of objectivity?

77
00:14:21.088 --> 00:14:27.408
Yeah, and we both know, like, the pendulum keeps swinging back and forth in this industry and probably in the world, but, like, the pendulum has swung...

78
00:14:27.548 --> 00:14:38.688
I can remember 20 years ago, like, ads were everyone's business model. Not just publishers, but software. Yeah. Like, Office was going to be ad supported, and it was all ads, ads, ads.

79
00:14:38.728 --> 00:14:45.708
Every- [laughs] Yeah You know, I would talk with people from Silicon Valley, and they would talk about turning on the revenue st- spigot, which [chuckles] meant starting an ad network.

80
00:14:46.188 --> 00:14:56.998
Obviously, the pendulum now has swung decidedly against ads. I've heard people that's like, they talk to venture capitalists, they're like, "I'm never investing in an ad-based business model," and stuff like this.

81
00:14:57.148 --> 00:15:11.768
But ads are still fine. They enable access to content, and particularly to news, it's important. To me, they are absolutely critical part of a healthy news ecosystem.

82
00:15:12.288 --> 00:15:18.488
I do not think you can be profitable in the way that you need to or you'd like to without them.

83
00:15:18.888 --> 00:15:31.248
I, I think turning off one side or the other, going all in one way or the other, doesn't feel to me to be the, the best recipe. If I were launching something today, I would heavy on subscription and, um,

84
00:15:32.668 --> 00:15:35.608
smart, targeted ads that work.

85
00:15:35.728 --> 00:15:48.248
I wouldn't start jamming pre-roll into things, and I, I wouldn't be arguing with my content team about the size of the banners above the fold, but I, I do think elegant sponsorship has to be a part of it because you're just leaving too much money on the table.

86
00:15:49.208 --> 00:16:00.448
Yeah, I think when... And I think sometimes, particularly with investors when they hear ads, like, they think just the programmatic backfill that arguably has taken over a lot of generalist news sites.

87
00:16:00.488 --> 00:16:11.588
I mean, you go to some of these sites, and it's really difficult to find the content under the dueling pop-ups to turn on notifications you had. I, I think one yesterday, there was... I've never seen it, it's like a...

88
00:16:11.628 --> 00:16:18.588
I wanna come up with a term. It's three different autoplay videos going on at the same time. It, it was a UK, I think it was The Independent. They really go for it. Yeah.

89
00:16:18.948 --> 00:16:29.988
So let's talk about, um- [laughs] That sounds more like Fox or CNN to me, but yeah. [laughs] Well, they're taking their cues from The Independent. The sports publishing industry became really interesting, right? Yeah.

90
00:16:30.388 --> 00:16:38.068
All of a sudden, because of the legalization of gambling, it opened up a massive opportunity.

91
00:16:39.428 --> 00:16:46.368
Talk to me about that 'cause, you know, y- you, you were at Bleacher Report when this was happening, and it's really been kind of stunning to see.

92
00:16:47.288 --> 00:16:55.288
Yeah, I think something happened where sports and culture collided, right? It, it happened around fashion, it happened around sneakers.

93
00:16:55.368 --> 00:17:05.888
It, it, it just happened where, you know, Instagram and other social mechanisms gave fans a look at what was happening with their favorite athletes beyond the court of play.

94
00:17:06.288 --> 00:17:13.368
And, you know, 2015, 2016, '17, '18, '19, those were, you know, really interesting times.

95
00:17:13.408 --> 00:17:24.488
Revolutionary, really, in terms of the way that even casual fans were able to connect with athletes and, and ultimately with the sports that they play, sometimes sports that they love, sometimes sports they don't love, you know?

96
00:17:24.528 --> 00:17:41.048
My wife follows a handful of, of athletes 'cause she just thinks they're cool. She's not a big sports fan per se. So I, I think all that was going on and then the, Instagram specifically, but many of the social sort of

97
00:17:42.228 --> 00:17:53.588
networks realized they were leaving a lot of money on the table because we were building branded content and posting it there for free, and they didn't see a cut.

98
00:17:53.808 --> 00:17:59.728
And so in the beginning, that's okay because sports builds scale. Like, invariably, sports helps build scale.

99
00:18:00.308 --> 00:18:20.228
But once they were able to sort of arbitrage that moment and extract the scale from it, a lot of publishers, a lot of media companies were making a fair amount of money inside of Instagram, and the algorithm gets tweaked, and you can see a lot of the organic views have plummeted.

100
00:18:20.308 --> 00:18:30.316
Why? Because the way that they can get you to, um, uh-Spend money is not by sort of easily saying, "We want 20% cut of what Ford Motor Company runs."

101
00:18:30.356 --> 00:18:38.536
It's, "Well, if you wanna get the scene, you're gonna have to pay us for the eyeballs." And it- it's what I would do too if I were them. Yeah.

102
00:18:38.556 --> 00:18:42.376
And that's why I, I, I wanna get your take on whether this was just a gold rush.

103
00:18:42.416 --> 00:18:58.456
'Cause you had a very unique situation in which sports gambling, which has existed for forever, was becoming legalized, and there was a ton of money going into onboarding a lot of people onto these platforms, right?

104
00:18:58.526 --> 00:19:11.616
And that's unique and so- Yeah... there was a bit of a gold rush, right? I mean, this is a picks and shovels situation. [laughs] Yeah. I think there still is. I think [laughs] yeah, for sure. I think there still is.

105
00:19:11.696 --> 00:19:16.936
It's a... The, the process of legalization is state by state, right?

106
00:19:17.036 --> 00:19:25.296
So particularly if you think back to a year ago where the valuations on, on these companies were sitting at, they, there was a lot of money to be spent.

107
00:19:25.816 --> 00:19:39.436
And I think what's ultimately happened is they're not just planting flags state by state for legalization, but they started planting flags for association with companies. So we wanna own basketball at X publisher.

108
00:19:39.556 --> 00:19:54.456
We wanna own the NFL on X network. And to me, that feels like an extension of the land grab that's happening. Well, land grabs die, right? The valuations have come back down on some of these companies.

109
00:19:54.516 --> 00:20:09.956
The reality of most traditional media companies, it's not publishers, it's not TV, but just most traditional companies, is that they're not set up to deliver lower funnel conversions, and those customer acquisition costs are very high.

110
00:20:10.076 --> 00:20:21.616
So I think what we'll find is that this first wave will be just that, enormous, crazy three to five-year deals that seem almost incalculable based on the CPM.

111
00:20:21.896 --> 00:20:29.856
I, I don't suspect most of them will get renewed, not to the same levels where they're at, because the needs of the publishers will have shifted, the market will have matured.

112
00:20:29.896 --> 00:20:41.536
And so in this early land grab stage, if you're a betting company, you're focused on the tip of the spear. Like, how do we get people who are already betting illegally to bet legally?

113
00:20:42.456 --> 00:20:53.076
Then you move into how do we get sports fans who don't bet? Then it'll move to how do you get non-sports fans to bet? And that's where iGaming and other things will come in.

114
00:20:53.176 --> 00:21:04.536
I bet we'll have a, a bunch of game shows and things that'll start popping up. And so I think in this first wave, you're trying to get noticed, and then everyone's gonna have to figure out how to actually make money.

115
00:21:04.616 --> 00:21:09.236
Yeah. [laughs] That's like step three. [laughs] How to make money.

116
00:21:10.096 --> 00:21:18.916
Also, I think the thing that's fascinating to me right now is everyone talks about the sports betting landscape as if the game is won and the race is over.

117
00:21:20.216 --> 00:21:29.676
From where I sit, it's far from over, and I think we will go through a consolidation phase. It seems like we are already. You know, WynnBET's for sale, and there are others that are, you know, backing out.

118
00:21:29.716 --> 00:21:42.116
But I've never seen a market in the history of the world that only had one or two or even three entrants. You see a lot of markets that have, you know, two or three brands that eat up 80% of the profit. Yeah.

119
00:21:42.136 --> 00:21:52.116
But then you still have successful, profitable, healthy businesses in that long tail, and so I, I think a lot of those kind of things, specialty gaming companies will emerge.

120
00:21:52.176 --> 00:21:59.386
I think there's gonna be a lot of companies that they make 200 million, 300 million, 500 million. They can be successful, healthy, profitable businesses.

121
00:21:59.436 --> 00:22:06.016
They're, they're not going to be DraftKings, they're not going to be FanDuel, they won't be Caesars, but they can be profitable and they can be interesting.

122
00:22:06.036 --> 00:22:18.056
And, and every market in the history of the world, every industry has those kinds of players, and I think it'll be interesting to see how those evolve outside of whoever the big two or three ends up being. Yeah.

123
00:22:18.065 --> 00:22:25.076
And I think you said something interesting, that publishers are not... They don't have their businesses set up to really address lower funnel.

124
00:22:25.136 --> 00:22:36.436
Like, generally the industry is focused on brand, quote unquote, and then performance is the, the stuff they used to call below the line, and it's massive. It's what drives Google- [laughs]... and Facebook's businesses.

125
00:22:36.446 --> 00:22:47.496
It's very data heavy. But h- how do publishers get better at that lower funnel? Because ultimately what these sports betting services see is they need to lower their customer acquisition costs, right?

126
00:22:47.526 --> 00:22:53.706
And media can be an efficient way of doing that. Yeah. I'm not sure if it will continue. Like, how do you reorient a publisher?

127
00:22:53.746 --> 00:23:05.675
'Cause I think publishers with the start of affiliate, they, they got a taste of being able to in, in some ways control their, I hate the term, this is like a sports term, control their own destiny, 'cause it doesn't make any sense.

128
00:23:05.766 --> 00:23:16.456
But they got a taste of that rather than going out and trying to get IOs with ads. But I wonder how much publishers are truly set up to address that lower funnel. Not many.

129
00:23:16.796 --> 00:23:26.196
Some are, but in reality, most of them were created and exist for upper funnel, you know, brand. That's, that's what they do. That's where they are.

130
00:23:26.296 --> 00:23:34.816
Look at what, uh, Dash is doing and, and Bustle and some others that are figuring out ways that they can be set up for lower funnel conversion.

131
00:23:34.896 --> 00:23:45.736
But most publishers that I've seen, if you actually run a lower funnel conversion study with them, you're gonna find that you're not moving the needle on very much directly. It's just not what they're built for.

132
00:23:45.836 --> 00:23:49.416
It's not what they do. It's not even the way the site's structured or the content is created.

133
00:23:49.756 --> 00:23:58.786
So as it relates to sports betting, I think you're gonna have to find a new paradigm, and what's fascinating to me is everyone comes at it from a different place, right? So publishers have scale.

134
00:23:59.236 --> 00:24:10.076
They might not have lower funnel conversion, but they have scale, and they have to figure out how to represent themselves with sports betting. Um, big gaming companies have money, right? And are...

135
00:24:10.276 --> 00:24:13.396
Many of them are whizzes at lower funnel conversion, but they don't have content.

136
00:24:13.916 --> 00:24:34.534
And so what everybody's trying to figure out is how do you blend the chocolate and the peanut butter, and ultimately how do you lower lower funnel conversion costs by, um,Creating media, media extensions, um, lifestyle components that, that allow you to have consumers spend more time with you so that...

137
00:24:34.744 --> 00:24:39.824
Why? So that you can spend less if you're a large gaming company with publishers.

138
00:24:40.064 --> 00:24:50.144
You'd rather- even if you're spending the same, you'd rather have it in your ecosystem, 'cause then you're selling the ads against it, you're creating the content, you're licensing the shows to Netflix. So, um, right now

139
00:24:51.584 --> 00:24:56.784
they're partners. Mm-hmm. You know, this, this, uh, the media companies and the sports betters.

140
00:24:57.564 --> 00:25:11.184
This next round when these deals expire, they, they will be competitors, and they'll either get gobbled up and bought by them or they're gonna find that their deals are not as rich as they are as these other companies launch their own media companies internally.

141
00:25:11.224 --> 00:25:22.004
Because it's really about that funnel. Some have the bottom, some have the top, some have both, some have the middle. Nobody has all three yet. Yeah. That's the race. How do you get to own all three parts of it? Yeah.

142
00:25:22.104 --> 00:25:26.684
That reminded me, you had a tweet recently that resonated with it. It was something like, "Every business wants to be a media business.

143
00:25:26.744 --> 00:25:31.014
Unless you're a media business [laughs] you're trying to figure out how to be some other business." Yeah.

144
00:25:31.014 --> 00:25:41.844
[laughs] David Carey, who I worked for at Conde Nast for a while and was, you know, former president of Hearst, said something to the effect of, "If you wanna make a small fortune in media, just start with a large fortune."

145
00:25:42.304 --> 00:25:55.584
[laughs] And most of the, most of the businesses are, are like that. It's not easy for to be profitable. It's not easy for restaurants to be profitable either, but they look cool and you can get a corner table. Yeah.

146
00:25:55.624 --> 00:26:03.844
I've written about this idea of primary engagement media, 'cause we've been going on about the scale era for five years, so it's time to move on from that. The question is what comes next, right?

147
00:26:03.854 --> 00:26:09.884
And to me, it's pretty clear that when you look at where people are succeeding, it's more niche.

148
00:26:09.924 --> 00:26:21.624
If you're looking for quadrants to occupy, there's probably a lot more opportunities when it comes to going narrow and deep to find a niche, an underserved one, and to just being the sort of lifeline to that.

149
00:26:21.684 --> 00:26:32.084
Sort of always been a good business, but I think it's more important now. There's clearly a shift from institutional brands to, like, individual brands. And then there's clearly- Mm-hmm...

150
00:26:32.144 --> 00:26:42.144
I don't think anyone is coming up with a monolithic business model these days. Like [laughs]... I mean, some people still are. I don't know why. They- it's mostly for PR. It's like, "We're only doing subscriptions."

151
00:26:42.184 --> 00:26:44.493
And it's like, I would be a little bit more pragmatic about it.

152
00:26:45.074 --> 00:26:54.904
'Cause wh- when you're thinking about all of these concepts, the idea that the industry is set up in such a way to make these kinds of transitions incredibly difficult.

153
00:26:54.944 --> 00:27:05.564
So while everyone might go out and, and ta- say- Yeah... "Oh, scale era is over," and stuff like this, well, wait a second, the entire advertising ecosystem is built around scale.

154
00:27:05.604 --> 00:27:14.804
You can say that ad targeting had its day. Yeah. But wait a second, everyone's built the rails. If you built the rails, you're gonna run trains down 'em. That's over. Programmatic is gonna remain.

155
00:27:15.164 --> 00:27:29.113
But it seems like that's the point where I get is the way the industry is structured as such is gonna make any transition to a new era incredibly difficult. I think so. I think scale is often an enemy, right?

156
00:27:29.144 --> 00:27:41.664
It's a, it can be an enemy of quality. [laughs] It can be an enemy of efficiency. Um, you mentioned a s- a small focused publisher, right? Mm-hmm. That's a great business.

157
00:27:43.144 --> 00:27:56.004
Where it gets challenged, in my opinion, is around growth. So take magazines. If you buy a magazine today, what's the first thing you're gonna do?

158
00:27:57.084 --> 00:28:16.224
You're gonna evaluate the health and vitality of the subscription file, the circulation file, and you're gonna determine either we need to rightsize the subscription base from 2 million to 200,000, which is, you know, in range with what it probably should be, or you're just going to fold it because it's easier.

159
00:28:17.264 --> 00:28:26.904
Now, why did those magazines get that large when it's well beyond what the actual readership should be? It's not because the magazine's not quality.

160
00:28:27.404 --> 00:28:37.344
It's not because there aren't a fair amount of people that want to read them. It, it's because the easiest way to juice your numbers [laughs] year over year if your CPMs are going a little flat

161
00:28:38.384 --> 00:28:51.904
was to increase your subscription. So if we add 30,000 subscribers this year by whatever means, because it's been 20 years since any agency person really understood how to read an, an ABC statement,

162
00:28:53.004 --> 00:29:03.704
or many people knew how to read it, yeah, we have a ton of growth. We're adding 30,000 subscribers. Wow, that's great. Yeah. This brand's crushing it. People love us. Where are those coming from?

163
00:29:03.964 --> 00:29:16.484
Eh, you know, they're coming from our website. It's great. It's really efficient and healthy, whatever. Do you wanna see the ABC statement? No, no, we're good. Fine. So that's it. There's no regulatory body in media.

164
00:29:17.154 --> 00:29:28.004
That's the biggest problem we have. You can say whatever the hell you want. Yeah. I'm not saying I do or that I, I say that people should, but you can, and a lot of people do. And so- Oh, yeah...

165
00:29:28.044 --> 00:29:36.324
when you're pushing up those subs, what happens, right? You're getting more expensive, you're getting bigger, you're watering down the quality of the audience.

166
00:29:36.684 --> 00:29:43.084
You're, you're starting to then have to tell stories for a bigger audience that may not even actually exist. And so, you know,

167
00:29:44.224 --> 00:29:54.044
scale, growing the brand, you know, hitting your 5 or 10 or 20% growth, you know, metric every year, it's not just gonna come easily.

168
00:29:54.384 --> 00:30:05.324
And so I think the scale ends up sort of like becoming a drug that you can't get off, you know? Yeah. In the same way like ads at the bottom of the website become a drug. Right.

169
00:30:05.724 --> 00:30:15.244
[laughs] I, I'm reminded- You'll never guess what Tootie from Facts of Life looks like now. Yeah. [laughs] Cool. I'll s- I'll click 50 times to find out. I would actually, I would, I would click on that. Kim Fields.

170
00:30:15.714 --> 00:30:26.604
The, i- it's funny- Good call. Good call... 'cause they re- I know. [laughs] I, I, I have encyclopedic knowledge. My parents sat me in front of a TV for all of the 1980s. Um, sorry, Mom. My mom listens to this podcast.

171
00:30:26.684 --> 00:30:31.824
I think a lot of times people think these growth hacking things are, like, new and, and they're not. They're just slightly easier to pull off, right?

172
00:30:31.844 --> 00:30:34.854
[laughs] Like, I remember Jane Pratt, like, telling me that the, the assumption- Mm-hmm...

173
00:30:34.854 --> 00:30:46.188
uh, for Sassy was that if, if one person got Sassy in the sorority house, she shared it with every single other, uh, girl in the sorority house. [laughs] It's like-One sub becomes sixty subs, uh- Okay...

174
00:30:46.198 --> 00:30:48.008
kind of quickly with some pass along.

175
00:30:48.448 --> 00:31:06.708
So none of that is, is quietly new, but it's funny because for everyone to talk about niche and stuff like this, there has to be a comfort with smaller numbers because if you wanna have a system that rewards people creating real content that has not only just real audiences, but a real community behind that, you're gonna have to get comfortable with the numbers being smaller.

176
00:31:06.768 --> 00:31:19.368
If you want the numbers to be bigger, you can- Yeah... you can go to those arbitrage sites that are getting tons of traffic, uh, by being good at SEO or by running on Taboola or whatnot, the, the Kim Fields, uh, stuff.

177
00:31:19.428 --> 00:31:27.648
I'm sure she looks great. Exactly. But yeah, they have to get c- more comfortable, agencies, advertisers, everyone has to get more comfortable with smaller numbers as far as I, I can tell.

178
00:31:27.708 --> 00:31:38.478
Otherwise, it- nothing's gonna change. But it makes their job harder too, right? A- agencies play a role in, in this. Th- that, that can't be discounted, Brian. So- Yeah...

179
00:31:38.508 --> 00:31:42.238
the agent clients, it's a, it's an invirtuous circle, right?

180
00:31:42.268 --> 00:31:52.728
The clients, the procurement officers primarily at big companies have squeezed agency margins, so agencies have had to go and find other ways to make money, right?

181
00:31:52.808 --> 00:32:02.428
That's how trading desks evolve and, you know, all the other sort of things that can then happen off of that. And, um, but one of the things that happens is they can't staff these accounts the way that they used to.

182
00:32:02.468 --> 00:32:11.508
And so what, what happens, right? You can't... There's nobody there... When I first started selling ads in a magazine, there were, like, multiple assistant planners.

183
00:32:11.608 --> 00:32:22.508
Then there were plan- multiple planners, then there were a handful of supervisors. Then there were, like, two AMDs. Then there was a, you know, a media director. You had big teams for singular accounts.

184
00:32:22.858 --> 00:32:37.668
They can't afford to do that anymore. And so, um, what happened is nobody can take the time to really understand, really truly understand, the products that they're buying. This is where the RFP process comes in.

185
00:32:37.928 --> 00:32:47.348
It's an easy way to keep people at bay, and what do you end up doing? You do a run. Okay, who are the top five biggest sites or the top ten biggest sites, and let's just evaluate those.

186
00:32:47.648 --> 00:32:58.428
The world that you and I are talking about is one that involves, um, a lot of evaluation and, you know, deep understanding of the market and focusing on lots of smaller brands.

187
00:32:58.488 --> 00:33:09.288
It's a hell of a lot easier to have an, you know, a big account run by three or four people that used to be eight or ten people and just buy the five biggest because you can just spread the money out and move on.

188
00:33:09.348 --> 00:33:25.788
It creates less incentive for media brands to, to, um, always sort of present themselves the right way. It creates less incentive, um, for, you know, a lot of things. And so th- this invirtuous circle has, has sort of...

189
00:33:26.108 --> 00:33:30.708
E- everyone's to blame. It's not publishers' fault. It's not advertisers' fault trying to get cheaper rates.

190
00:33:30.728 --> 00:33:36.228
It's not agencies' fault that are trying to get m- more dollars or keep their profit margins 'cause a lot of them are public companies.

191
00:33:36.808 --> 00:33:54.728
The net result, though, of this is that ultimately, smaller, more focused publishers that have stronger audiences cannot, will not get the mind share required in order to make the connections they need to grow. Yeah.

192
00:33:54.817 --> 00:34:05.848
And so you, you just get a lot of same. You know, like, 20 years ago, people would say, "Nobody gets fired for a media plan that, that buys people." Yeah. You just, you couldn't... That would, that made sense.

193
00:34:05.908 --> 00:34:18.888
You, you didn't have to justify why 60% of your ad budget went to people. You could just do it. Well, now insert who? I don't know. Insert what network. Insert what social company. It, it's insert what search engine.

194
00:34:19.068 --> 00:34:27.788
It's just easier to put all that money there because it requires less evaluation. Yeah. And I think it's an important point that a lot of this begins with the marketer.

195
00:34:27.928 --> 00:34:40.028
I mean, at the end of the day, like, there's a lot of misaligned incentives in, uh, the media system, and those are, those start with the marketer because historically they've sort of called the shots at the end of the day.

196
00:34:40.188 --> 00:34:47.628
Now- I talk to my friends in marketing, they'll turn to the procurement team and say, "I fight..." They'll tell me they fight with them more than they fight with anyone else.

197
00:34:47.688 --> 00:34:56.608
Th- it's not the, you know, it's not as if they're in control, you know? They can only do what they're tasked to do. And so I don't think anyone's at fault.

198
00:34:56.748 --> 00:35:04.738
I just think we're in this weird cycle, and I think it makes it harder for publishing brands. I think it makes it harder for content. I think it makes it harder for storytelling.

199
00:35:05.098 --> 00:35:15.328
I just think, you know, ultimately, um, the model isn't working. It's not servicing anyone properly. Yeah. I, I understand the procurement. Everyone likes to, to blame procurement.

200
00:35:15.348 --> 00:35:23.098
Uh, I think with the one confession we didn't end up doing that I always wanted to is with a procurement officer. [laughs] It's like, 'cause the poor procurement people, it's like- Yeah...

201
00:35:23.128 --> 00:35:31.888
everyone shits on them [laughs] and, and like you never hear from them. [laughs] They're never like- Right... these poor, these poor people. They're just- Yeah... they're just trying to do their job.

202
00:35:31.968 --> 00:35:40.028
Uh, but I do wonder, like, when- But like it's, they're just doing their job. What's their... Their job is to save money, right? Yeah. It's, it's gonna be interesting.

203
00:35:40.108 --> 00:35:50.468
I wrote this week we're coming out of a bit of an era with ad targeting. Like, ad targeting is not going away. Data's not going away. But s- inflation is coming, you know? Right. We already see it.

204
00:35:50.808 --> 00:36:01.458
It's way more expensive for m- marketers to just dump a lot of money into lower funnel. Like, it's just more expensive, and that's gonna have- Mm-hmm...

205
00:36:01.458 --> 00:36:14.888
a lot of effects on all those DTC brands that have been all over your Instagram. Like, life is a lot harder for them now. I, I think that's an area where I think social networks probably don't get enough credit, right?

206
00:36:14.948 --> 00:36:25.378
Like how many- Yeah... businesses are, are supported by, built by, reliant on them for that? Every guy our age over quarantine was buying Vuori sweatpants, Mack Weldon underwear- [laughs]...

207
00:36:25.388 --> 00:36:31.028
and all of a sudden started wearing On running shoes. Like, that's not an accident. Yeah. I know.

208
00:36:31.188 --> 00:36:41.188
You know, a lot of people root against Facebook and, and, and Google and, and see them as an enemy, and I think some of that is okay, but some of it is completely misplaced.

209
00:36:41.368 --> 00:36:58.384
What Facebook was able to do is they created an ad machine that was unbelievably powerful a- and that helped a ton of people level the playing field when it comes to competing with far larger and entrenched, um, incumbents.Last thing, 'cause I think, I think you're a bit of a skeptic.

210
00:36:58.464 --> 00:37:12.724
I've been going down various rabbit holes recently. Web3, the crypto world, you seem like you're a bit of a skeptic. I'm not a skeptic. It, it's funny, I, I, I actually think... I'm not a skeptic. I, I believe in it.

211
00:37:12.844 --> 00:37:21.643
I don't think I believe in it as much as some of the folks you and I follow on Twitter do. [laughs] I spent a lot of time at Wired. I spent a lot of time in technology.

212
00:37:21.864 --> 00:37:36.484
And there is always, at the introduction of any great technology, a utopian phase, right? Technology will bring about a brighter, better tomorrow, and all we see is the good. And I think we're in that stage right now.

213
00:37:37.264 --> 00:37:52.484
And inevitably, it will be co-opted for more nefarious uses. How many years ago was it that we were all posting colored photos in our social feeds because of the social-led uprising in, you know, the Middle East?

214
00:37:52.684 --> 00:38:04.484
Like, what could be better? Sh- Facebook shining, Twitter shining a light on the world, and oh my God, the good that this will do. And it has done a lot of good, but there's a downside, right? Every yin has its yang.

215
00:38:04.514 --> 00:38:10.524
And so I think we're in the yin phase right now. And there is, there is a yin phase happening.

216
00:38:10.964 --> 00:38:20.884
Um, I think a lot of folks believe it to be a panacea for too many things, and I think we just have to wait to figure out where it, it's really going to be applied.

217
00:38:20.984 --> 00:38:34.304
I don't believe that tokenizing writers and creating up DAOs that will lead to the future of media and publishing companies and, like, ugh, you know? I just, I can't, can't go there. I think some of that will happen.

218
00:38:34.344 --> 00:38:46.084
I think some of it will be true. I also think that, like, yeah, there's a real take that, I don't know, maybe cryptocurrency is exactly the worst possible thing we could do to destabilize our national security.

219
00:38:46.144 --> 00:38:56.224
Like, that's a real possibility. And how many of the people do we hear proselytizing it and talking about it have deep-rooted financial incentives to push out that information?

220
00:38:56.284 --> 00:39:07.404
Because where you stand is always in direct relation to where you stand. So I'm not against it. I think we will absorb and use and, and really greatly benefit from some of the very good things that it can do.

221
00:39:07.524 --> 00:39:17.324
I think we're just starting to understand some of the negatives and downsides of it, and I think just like every other life cycle, it's gonna have to run its course, and we're gonna have to figure out where we are. Yeah.

222
00:39:17.564 --> 00:39:27.564
It's gonna be interesting to see whether it's a true new technology paradigm shift or whether it's sort of like the Segway. [laughs] You know? Like, there's...

223
00:39:27.854 --> 00:39:38.124
I remember, like, it was like, oh, we're gonna remake cities and stuff. [laughs] Seems a little silly in retrospect. You know, you know, so I was- But the Segway, I still see, I see cops in Miami Beach on the Segway.

224
00:39:38.204 --> 00:39:42.504
So it's not like the Segway- Yes. [laughs]... didn't have an impact. Yeah. I was at, um,

225
00:39:43.924 --> 00:39:54.444
I was I think the ad director at Popular Science, I don't even know, 18 years ago when this came out, 19 years ago when the Segway came out, and we got one at our national sales meeting.

226
00:39:54.474 --> 00:39:56.324
And it was, like, the most unbelievable...

227
00:39:56.384 --> 00:40:06.724
We were, like, so excited 'cause nobody had ridden one, and it was like our editor in chief had to get it, and we flew it out to, you know, wine country, where, where we went for our sales meeting, back when you would do those kind of amazing things.

228
00:40:06.844 --> 00:40:21.084
And a bunch of us took rides around it, and then this one girl took a ride on it, hit a curb, flew off, and had to go to the hospital. And I remember we all sat there being like, "Oof, that's not good," you know?

229
00:40:21.324 --> 00:40:30.053
And I, I think sometimes with technology, you don't realize the downside until it throws you off the device and onto the curb. And with Web3, it's the same thing, man. It's like- [laughs]...

230
00:40:30.064 --> 00:40:42.524
everyone's trying to loop a Ukraine tweet into the prism of something they know, crypto, sports, whatever. It's just, it's maddening. And- Yeah... I think that's where it, there's a lot of good that will come from it.

231
00:40:42.584 --> 00:40:47.904
There's a lot of good that has come from it. And I, I think- Yeah... um, we're starting to see some of the great benefit.

232
00:40:48.064 --> 00:40:54.044
I think we'll see some of the downside, and I don't know that, um, it's quite the panacea that people want you to believe. Yeah.

233
00:40:54.784 --> 00:41:05.644
I mean, people like our age are like, "Yeah, it's not gonna get 100% there, but if it gets 20% there, great. That's a win." [laughs] Yeah. Howard, thank you so much for joining me. Thanks for having me, Brian.

234
00:41:06.164 --> 00:41:15.604
Thanks for nodding along, uh, attentively, Jay. I appreciate it. [laughs] Yeah, thank you to Jay Sparks. He's our producer and makes this sound great. Thank you all for listening.

235
00:41:15.824 --> 00:41:25.174
Again, if you can leave a rating or review, it'd be great. Shoot me a note, uh, with any feedback. It's, uh, bmorrissey@gmail.com, and we will be back next week with a new episode. Thanks.

236
00:41:26.594 --> 00:41:37.344
[outro music]