Stagwell CEO Mark Penn is a veteran of politics. In this discussion, he examines how shifting audience behaviors and trust patterns are reshaping where Americans get their news. The conversation delves into the thorny challenges of advertising on news content and why brand safety concerns are usually overblown. Penn outlines how news organizations can build sustainable businesses by adopting lessons from political campaigns, while warning that chasing ideological audiences risks further eroding media's broader cultural influence. 

The Rebooting Show

Mark Penn on the state of the news business

AI-powered search engines have clawed a foothold in the critical search market that controls distribution on the open web. Media management consuling firm Activate estimates 15 million people are using these answer engines rather than Google, which is adding AI summarization to its results. By 2028, Activate expects that to rise to 36 million. The open question is whether publishers can stem this tide. Michael Wolf, the CEO of Activate, sees a fundamental shift in the search market, as generative AI can currently handle about 40% of searches as an open web discovery tool. He expects the rest of searches will follow suit over the next five years as the fundamental nature of the open web changes. This will lead to search becoming the front end to what Wolf calls "gated web discovery" and eventually "discovery-led transactions."

The new search wars

Blockworks CEO Jason Yanowitz discusses how Blockworks has evolved the company from an events business to podcast network to news provider to becoming a data and information play with media, events and franchises feeding the core data and research business. This kind of shift is hard to pull off. Among the issues we discuss:Using podcasts for broad reach and affinityNews as a credibility driverPulling back on B2C events to focus on B2BUsing media to drive “negative CAC” for information servicesImplementing a “house of brands” strategy

The evolution of Blockworks

Defector Media, the sports and culture publication launched four years ago by former Deadspin writers, is an example of the mixed picture for the future of the media business. On the plus side, it is a profitable, employee-owned publication with 42,500 paying subscribers supporting a $4.6 million business. At the same time, the company saw revenue growth drop to 2.2% from 18% last year and 16% in 2022.Defector's Jasper Wang joined me to discuss Defector’s plans to expand its ad revenue, the inevitable challenges of fast decisionmaking in an employee-owned business, the “lean stack” approach of outsourcing as many publishing and corporate functions as possible, and the growth of its Normal Gossip podcast and diversification of Defector’s audience.

Defector’s Jasper Wang on slow growth

I was joined by Reid DeRamus to discuss the strategic and tactical decisions that go into building an independent media business. We discuss everything from choosing a business model, using the leverage of individual reputation, the value of consistency and authenticity, the mistake of over-reliance on optimization techniques, and the challenge of growth as tried-and-true methods wane in efficacy.

Building independent media businesses

In this Spotlight episode, Josh Brandau, CEO of The Rebooting partner Nota, discusses how AI can be a critical tool for newsrooms in a more-with-less era. osh is a publishing veteran having been CRO and CMO at the Los Angeles Times. That informed his decision to create Nota since like other publishers he saw legacy media struggling to adopt technologies that underpin sustainable businesses. We discuss the inefficiencies inherent in a lot of newsrooms that end up taking scarce resources away from the actual news reporting, and how tasks like versioning, content optimization, SEO and tagging can be sped along with an AI assist. We also take a big picture view of where journalism goes in an AI world, licensing as a growing revenue source and how AI could create other new revenue streams as publishers inevitably move beyond efficiency and begin to create new products that improve the customer experience.

AI in the newsroom

Fitt Insider, a media brand for the fitness and wellness industry, is a good example of the type of media brand that hits on many of the current trends in the industry:Niche. The fitness and broader wellness industry is a growing area that will only expand.B2B.  The most robust media models are B2B or targeting influential audiences with similar approaches.Direct. Fitt relies on podcasts for engagement and its 100,000 email subscriber list for audience data and a direct connection. Organic. Too many newsletters are growth hacked. Fitt Insider has traded slower growth for a quality list that has open rates near 75%.Expertise. Fitt Insider’s founders, Anthony and Joe Venare, are fitness industry experts, having owned gyms and invested in the space.Media flywheel. The best media models tend to make most of their money in media-adjacent areas. For Fitt, this is through its recruiting and consulting arms.Anthony Vennare joined me on The Rebooting Show to break down the Fitt Insider model, and how he views media more expansively. That’s led him to forgo the typical ads and marketing heavy approaches to monetization. 

Fitt Insider's Anthony Vennare on niche media models

This week, I was joined by one of my favorite media entrepreneurs, Adam White. Adam has built Front Office Sports from a college project to the $10 million in revenue mark, with backing from Jeff Zucker's Redbird IMI.Some of the topics we covered:Why investing in creative strategy is critical to break through with big brands. The “faces and franchises” approach. The limits of built-if-sold projects. The decision to put off subscriptions. 

How Front Office Sports went from college project to $10m in revenue

Adam Mendelsohn operates at the nexus of sports, media, business and culture. Adam is a longtime advisor to LeBron James and his business partner Maverick Carter. He’s a communications advisor to many athletes and companies. And he’s recently rolled out his own sports platform, OffBall, which is something of a throwback to a pre-algorithmic era where Drudge report and other curators reigned supreme.We discussed:The genesis and vision behind OffBall, a new sports media ventureThe long-term impact of "The Decision" on sports media and athlete communicationsThe shift towards human curation in content discoveryThe evolving landscape of sports journalism and brand partnershipsThe rise of women's sports and international leagues in the U.S. marketThe importance of storytelling and character development in sports media

Why sports are winning

This week marks an important moment in the history of digital advertising as the U.S. Department of Justice presses its case that Google is a monopolist in ad tech. The seeds of this case were planted in 2007, when Google bought DoubleClick, a critical piece of internet advertising infrastructure that was widely used by advertisers and publishers in running ad campaigns. With DoubleClick in the fold, Google methodically grew to dominate all phases of digital advertising by piecing together a full stack solution for ad tech, supplying the tools used to both buy and sell ads as well as the exchange used for transacting. And Google was the biggest source of demand for the exchange. The go-to comparison of this situation is if Goldman Sachs owned the New York Stock Exchange.On this week’s episode of The Rebooting Show, I spoke to Ari Paparo, a former DoubleClick executive and ad tech veteran who now runs Marketecture. Ari, in addition to being the funniest person in ad tech, knows the history. We go back in time to when the Google-DoubleClick deal took place, just as programmatic advertising was becoming a reality, and get into the weeds about why controlling the plumbing of digital advertising created an unavoidable set of misaligned incentives.

Google on trial

Scott Messer is founder of media advisory firm Messer Media and former svp of media at Leaf Group. Scott is in the weeds on the digital ad ecosystem, and he broke down the current state of play for publishers. We discussed why traffic declines are still the No. 1 challenge for publishers, why publishers are shifting from traditional monetization mechanisms, retail media as potential allies, and why “curation” is the latest hot new trend in ad tech, even if it sounds quite a lot like what ad networks have always done. 

Scott Messer on publishing’s “pivot to everything”

In a spotlight episode of The Rebooting Show, I spoke with Affinity Global CEO Lavin Punjabi for his view of how publishers adapt their affiliate operations. Affinity operates NucleusLinks, an affiliate operations platform that serves as something akin to Google Ad Manager for affiliate operations. Some takeaways:Many publishers are playing catch up. Affiliate marketing is one of the oldest internet business models, with its growth turbocharged by the ease and rise of e-commerce. Many legacy publishers were behind in adopting affiliate models, seeing performance ads as scraping the bottom of the barrel compared to impression models. “The biggest publishers in the world are scrambling to compete in this area that they kind of ignored for a generation,” Lavin said.Affiliate stresses silos. The entire idea of affiliate runs contrary to the notion of church and state. At one of The Rebooting’s dinners focused on commerce, I heard a large publisher lament how the editorial team would battle to control personal finance reviews rather than the commerce team. They were basically working against each other internally. "Some publishers it's the main thing, but for a lot of marquee publishers, it's a department, and they have to figure out where it fits because it's not really editorial, but it's not really sales."Dotdash Meredith is an anomaly. Dotdash Meredith is the manifestation of these worlds colliding, with the internet-native Dotdash taking over the legacy Time Inc publications. It’s telling that as publishers sound the alarm over AI, DDDM has weathered this storm and returned to growth. "They came from a commerce first angle, which is operated with CPS for a large degree. And then eventually with Meredith, which was CPM, they tried to find middle ground."

Winning at affiliate

On this week’s episode of The Rebooting Show, I was joined by Ana Andjelic,  a veteran brand executive and writer of the Sociology of Business newsletter. I wanted to try an episode with Ana because we focus on different ends of the media ecosystem. Among the issues we discuss:The internet’s impact on brands. “It forces you to compete on everything other than on brand. You compete on price, convenience, product recognizability, speed of your supply chain."​Product-led branding. “It’s starting with that iconic original product, using different wear stories, wear scenarios, different subcultures, to give it identity."Why DTC brands were really performance marketing companies. “A lot of brands, especially in the DTC era when money was free, thought they would build demand by buying Facebook ads, Instagram ads, search and so on."The limits of performance marketing. "Performance marketing is not going to build your demand. There needs to be something else that tells people to search for it or click on the ad.”

A confusing time for mass brands

This week, we are wrapping up a series on The Rebooting Show that examines the role of product at a time of distribution and monetization shifts. The twin themes that emerged are that publishers are increasingly focused on direct relationships with audiences and are in a back-to-basics mode of focusing product resources on critical business objectives, which often rely on loyalty. And the looming question: How will AI be used to make these businesses more effective while not losing their distinctiveness in a sea of artificial slop.Brian Alvey, CTO of WordPress VIP, discussed with me how AI’s impact on publishers’ day-to-day operations will be felt first and foremost on mundane tasks that end up eating up a lot of resources. The early efforts to embed AI within the publishing process were predictably ham-handed. Using ChatGPT to create AI slop is hardly innovative – and unlikely to be very effective. I’m very skeptical of creating much value out of using AI to churn out tons of aggregation newsletters, for instance.The most immediate opportunities in the content process lie in areas like tagging, inserting links to related articles, testing headlines and the like. As Brian warns, there’s no point in using AI in a way that eliminates the competitive advantage of having a distinct voice.Some highlights from our conversation:On the site as a requisite for an independent path: "If you want to be around in five years, I think so. Don't you like why would you has nobody ever learned that building up and like no offense to any of these, you know, what I call bastard gatekeepers that take your audience away from you."On where AI’s impact will be felt: "People probably overestimate the amount of things that AI is going to help them automate of what they do today. They underestimate how many things they're just not doing because it's so hard that AI is going to let them do."On AI’s use within the content creation process rather than creating content: "Some parts of that [process] can absolutely be handled by modern generative chat, GPT-style, LLM AI."​On distinctiveness in an AI era: "Be remarkable, No. 1. That's how you'll stand out from a sea of junk."On being product-minded vs a tech company: Publishers “should be product minded. They are creating a product for people to consume. They should have product talent. If you are the New York Times, you have a thousand product people. If you are somebody else, you have 10. But no, they shouldn't be a technology company."​

How AI will impact publishing

At the Media Product Forum earlier this month, I spoke with Gannett head of product Renn Turiano, Hearst Newspapers chief commercial officer Bridget Williams and Millie Tran, chief digital content officer at the Council on Foreign Relations. The conversation revolved around the shifting product priorities at publishers at a time when the weight of most publishing businesses is shifting from catering to the whims of platforms to a more independent path. That requires a change in focus to satisfy user needs, as well as the need to identify and serve various audience segments. We spoke about how all three organizations are tackling this. Thanks to WordPress VIP, which partnered with The Rebooting on the Media Product Forum.

Post-platform product development

The Rebooting Show gets into the weeds with those building and operating media businesses, giving an open view into how the smartest people in the media business are building sustainable media businesses. https://www.therebooting.com/ (www.therebooting.com)

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