Commentary

The Multi-Levered Revenue Strategy

Charlie Kammerer, CRO, The Slate Group; Steve Smith, VP, editorial director, events, MediaPost

Smith: “What is the State of Slate?” 

Kammerer: “Our audience is bifurcated. Two platforms are important for us, the written word and podcasting. People still read, thank God. Podcasting is growing. But ou can’t have it all. It came at the expense of video. It was too expensive, couldn’t monetize it, we’re too small. Instead, we put our money into podcasting, that’s where we really see our growth. Our audio audience is big, we had 150 million downloads this year. We were hit in the head by Facebook like everyone but not nearly as bad as some. Both of our audience segments are growing.

“We have a premium scale plan. We’re not running after scale. We want to get big while delivering a premium audience.

“Slate Group started on Washington Post’s campus. Microsoft created Slate. 7 - 8years ago WaPo bought it.”

Smith: “What are your revenue streams?”

Kammerer: “The business of journalism is an oxymoron, it’s friggin hard. Video’s the hot thing out there these days. It’s really important, mission driven, important for us to figure out how to make news a self-sustaining business. We need a free press, democracy, it’s important for country. We need to figure out way to make money. Trying not to be too precious here. There is not one answer. You have to pull a lot of levers. 

“Our audio business will represent 28% of our business this year. We are doing next year’s budget; it will be 35%. One, it’s growing, two, it delivers a supreme audience. Three, we can win. We have the muscles for podcasting.” 

Smith: “What about display and programmatic?”

Kammerer: ”Programmatic is 41% of our business. Taboola. We put it at the bottom of page, not a ton of people get to the bottom of the page. They’re a great partner. Kind of third-party player is just one lever you pull in your programmatic business. Our private businesses triple, quadruple this year. 

“The marketplace is looking for an audience that is premium. 

“Video Is way too expensive. The food business has long tail. Our video is usually topical, no long tail, it didn’t pencil out at all. Journalists want to use every medium to talk to viewers and listeners in every way possible. You can’t pull every lever. It’s hard to walk away from. It’s a great medium for journalists. Having to say no to this to invest in another medium is hard.

“Custom ads. Everybody is sort of custom now. It’s hard to make money. It’s a low-margin business. We do it, we do it well. We do it to help make big deals, push eyeballs to our custom business. A lot of what we do now is audio custom. We produced nine custom podcasts this year. We embraced audio, we’ve been doing it for several years.”

Smith: “What have you learned about making paid content grow and acquisition and what is its ceiling?”

Kammerer: ”We look at what’s driving Slate Plus members, what kind of content they come from. Some covert in a better way than others. By far, far, far, our best conversion assists are podcasting. Create podcast only for Slate Plus members. Important part of our conversion.

“Slate Plus is growing 30% YOY, it’s still small. It’s a decent business for us. Accounts for 8% of our top line. We have 20 million users a month, real opportunity. Pricing structure is low. 

“We break some news but we really don’t break a lot. We’re a content analysis site. Value proposition has a bit of a ceiling. There are expectations with the Times, Journal and Post, you need to be there. Not as much urgency coming to Slate for understanding it. More of a ceiling on our content.

”Because our podcasts hold such a value proposition to these users, it’s a tool we can use over and above the written word. The more value we can create in different pieces of content, the better.”

Smith: Drill into podcasting, area of key growth, challenge for me. Slate was early on this.

“We create good content. We ... toggle between what is journalistically important and what we think can be commercially viable. We’re known for our tech business voice. We have four studios in our office in Brooklyn, two in Washington. Text journalists do a lot of our podcasting. They bring a voice and understanding that is differentiating. Frustrating part of it for now is it’s one revenue stream. Bifurcated between direct response and brand. Brands coming in aggressively, which is fun. Great to be a consultive brand in that space. It is an advertising-driven medium for now. A lot of revenue streams in audio right now that we don’t see in text. 

“Ad rates are really good mostly because brand guys coming into it now. Host reads more effective. Put in recorded ad, not nearly as effective. In podcasting, there are a lot of folks running after huge scale. Sister company, Panoply, is a scaleable network. Wanted Slate to be premium. Panoply would stop selling their advertising product, running after audience-based product. Can sell across-audience targeting. Not a lot of data in audio. Annoying. Panoply has seen ability to going to marketing with singular strategy. Ten years ago, ad networks came, run after scale. They’ve seen the opportunity to sell to a targeted audience that they hope will scale. What happened to digital ten years ago. If you just want scale, they‘ll run after it.

“Hit-driven business? Or network? For us it’s a portfolio, we want hits but we’re not hit-driven. Our strategy is portfolio driven, fluent, educated, super-engaged, Slow Burn helped build hits. I don’t want scale for scale’s sake. I need focus scale. Put Slow Burn into the feed and, bam, the next day.” 

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