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.
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.
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...
any different, right? [upbeat music] Welcome to the Rebooting show.
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.
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.
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.
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...
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?
What are you doing? Doing the consulting thing, yeah. That's been fun.
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.
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...
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.
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
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.
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,
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.
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.
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.
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.
I think there's a lot of people, really talented people, who want what I call upside with dental insurance, you know? Yeah.
They just wanna be able to participate in, in the upside, but they don't wanna have to do everything on their own.
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.
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.
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.
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...
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.
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.
[laughs] But explain to me, what are the structures of a mission-driven publisher beyond saying, "Hey, we wanna solve this problem"?
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.
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.
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.
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.
But- And just to jump in, that ad was bas- basically, there was a split screen of Applebee's with the invasion of Ukraine.
[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.
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.
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
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.
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...
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.
[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.
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,
to me, comes down to the gaps, the major, major gaps that exist in local news coverage. Yeah.
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.
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.
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...
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,
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.
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.
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.
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...
but that's the price you end up paying.
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.
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.
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.
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.
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...
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.
Like, a, a concept I've been thinking about ruminating on [chuckles] a lot lately is, like, the future of local journalism,
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?
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
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.
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.
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.
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?
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.
And then, of course, people say, "Well, people aren't gonna do that," and stuff like this. But
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.
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.
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.
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
for a hell of a lot more money than that. Like, it's... Some of it, it... You have to be specialized.
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?
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.
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.
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?
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...
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.
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.
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.
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.
I do not think you can be profitable in the way that you need to or you'd like to without them.
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,
smart, targeted ads that work.
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.
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.
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...
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.
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.
All of a sudden, because of the legalization of gambling, it opened up a massive opportunity.
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.
Yeah, I think something happened where sports and culture collided, right? It, it happened around fashion, it happened around sneakers.
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.
And, you know, 2015, 2016, '17, '18, '19, those were, you know, really interesting times.
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?
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
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.
And so in the beginning, that's okay because sports builds scale. Like, invariably, sports helps build scale.
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.
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."
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.
And that's why I, I, I wanna get your take on whether this was just a gold rush.
'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?
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.
It's a... The, the process of legalization is state by state, right?
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.
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.
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.
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.
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.
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.
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?
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.
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.
Yeah. [laughs] That's like step three. [laughs] How to make money.
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.
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.
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.
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.
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.
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.
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.
And I think you said something interesting, that publishers are not... They don't have their businesses set up to really address lower funnel.
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.
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?
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?
'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.
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.
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.
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.
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.
It's not what they do. It's not even the way the site's structured or the content is created.
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.
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...
Many of them are whizzes at lower funnel conversion, but they don't have content.
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...
Why? So that you can spend less if you're a large gaming company with publishers.
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
they're partners. Mm-hmm. You know, this, this, uh, the media companies and the sports betters.
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.
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.
That reminded me, you had a tweet recently that resonated with it. It was something like, "Every business wants to be a media business.
Unless you're a media business [laughs] you're trying to figure out how to be some other business." Yeah.
[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."
[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.
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?
And to me, it's pretty clear that when you look at where people are succeeding, it's more niche.
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.
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...
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."
And it's like, I would be a little bit more pragmatic about it.
'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.
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.
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.
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?
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.
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?
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.
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.
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
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,
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?
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.
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...
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.
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,
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.
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.
[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.
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.
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?
[laughs] Like, I remember Jane Pratt, like, telling me that the, the assumption- Mm-hmm...
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...
kind of quickly with some pass along.
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.
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.
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.
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...
the agent clients, it's a, it's an invirtuous circle, right?
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?
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.
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.
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.
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.
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.
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.
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.
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...
E- everyone's to blame. It's not publishers' fault. It's not advertisers' fault trying to get cheaper rates.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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...
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.
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.
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.
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...
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?
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]...
and all of a sudden started wearing On running shoes. Like, that's not an accident. Yeah. I know.
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.
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.
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.
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.
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.
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?
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.
And so I think we're in the yin phase right now. And there is, there is a yin phase happening.
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.
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.
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.
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?
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.
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.
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...
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.
So it's not like the Segway- Yes. [laughs]... didn't have an impact. Yeah. I was at, um,
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.
And it was, like, the most unbelievable...
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.
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?
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]...
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.
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.
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.
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.
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.
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.
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