Don’t Write Off Digital Media Just Yet
An adapted email I sent to Mic’s team
“It will be very bloody. Bloody, and violent and depressing. Content makers will die.” — Josh Topolsky
“The transition from an internet of websites to an internet of mobile apps and social platforms … is a systemic change that is leaving many publishers unsure of how they will make money.” — John Herrman
The narrative surrounding the future of digital media has turned. Mashable recently laid off its politics and world news teams. BuzzFeed reportedly missed its revenue targets. Medium has decided to be a platform, not a publisher. The Huffington Post, Gawker, the International Business Times, the Guardian and the New York Times all cut staff.
Many are arguing that digital news companies are doomed. Everyone is pivoting to video on distributed platforms, but no one can make money there. Facebook and Google continue to eat up 40% (and growing) of all online advertising revenue. Digital upstarts are chasing scale at all cost. New media companies lack focus and are constantly chasing the next shiny idea. Publishers are producing commodity clickbait. Scarcity no longer exists in digital.
But these headlines fail to account for the nuances that will define the future of the digital news. Technology always evolves the fastest (now distributed, video, messaging, live). Media reacts quickly (distributed, branded content, short-form video production, live). Advertising lags slightly behind but ultimately follows audiences. Advertising is a $500+ billion global industry. Expect it to take a bit of time to adapt.
The transformation happening today has similar dynamics to previous platform transitions, except for one major difference. There’s more money in digital publishing than ever before. Advertising budgets have risen consistently and the ecosystem has matured to the point of supporting large dynamic publishing business. Average IO sizes are higher than ever.
Those who manage the current transition, build audience, and produce great journalism will thrive in the long run.
Just look at mobile video distributed over social. Facebook began emphasizing video in earnest in 2014, and it grew much faster than most expected. At Mic, a video we published just last week on gender confirmation surgery attracted 56 million unique viewers in seven days. The business model is not yet finalized, but I’m very confident that the reach and format will be very compelling for advertisers.
Central to Mic’s strategy is aggressively pursuing new platforms and distribution opportunities that create explosive audience growth. That usually means building before the business models have been fully developed — typically 12–18 months before advertisers get on board. This year, our revenue is coming from branded content partnerships and our Hero ad unit — which we built 12 months ago — and we’ve already booked more than the entirety of 2015 four months into 2016.
With so many new platforms and opportunities for growth, how do we decide where to invest? Video, social, email, messaging apps, 360-degree video, VR, newsletters, instant articles, AMP, notifications, events. At Mic, we constantly run smart experiments. We form SWAT teams who build, measure and learn. These teams include members from edit, analytics, engineering, design and video. We approach experiments with creativity and rigor, and either go all in or move on to new opportunities quickly. Teams get anywhere from six weeks to six months to test an idea.
Short-form video and Google AMP are examples of experiments that turned into core initiatives quickly. 360-degree video showed promise, but lacked real product market fit today. Bots, newsletters, Facebook Live and SMS are in progress. Some will work, and some will not, but Mic gets smarter after each experiment.
Our strategy has remained steady. We aim to become the most influential news outlet for our generation, shaping the conversation day in and day out.
To make that happen, we need to be the best at three things. First, being relentlessly relevant and smart for our audience — the 40 million college-educated millennials in the US. Our journalism needs to serve them better than any other news company. Second, winning on social, where our audience spends the majority of their time. Third, building direct relationships with our most loyal audience and engaging them every day. Our investment in Hyper is showing very real potential. And we’re seeing traction with our experiments in newsletters, SMS and notifications.
But having a solid strategy doesn’t mean this is easy or decided. Competition for traffic and attention is intense. The relationship between platforms and publishers is growing complicated. Producing great journalism is expensive, and making a sustained impact requires a great business to support it. Capital is harder to come by today than recent years.
Building an important news brand is a once-in-a-lifetime opportunity. Mic is well positioned, both with readers and advertisers, to become the dominant news company for and by our generation. In just four years, we’ve created reach and trust with the most coveted audience on the internet, affluent millennials. But success will require many more years of fighting smart and executing relentlessly.
