Jarrod Dicker on Record Labels & Renaissance Creators

Jacob Cohen Donnelly: Pretty sure my girlfriend mocks me now when I tell her that we’re talking because we’re in each other’s DMS multiple times a day. For everyone else out there, who are you, and what do you do?

Jarrod Dicker: [chuckles] I feel like I’m in a lot of people’s DMS lately, but you are definitely– I feel like you’re one of the most common DM conversations I’m having lately. Hey, thanks for having me on. Who am I? I’m Jarrod Dicker. Currently, I work at the Washington Post. My role at the Washington Post continuously evolves and my responsibilities are pretty deep. I’d say the main focus of myself and the teams that work within my purview is how can we build a better business for The Washington Post.

By building a better business for The Washington Post, how can we also set the standard for how the media industry, and interestingly so the tech industry, can also be building into this future? Just to give some numbers. I oversee the commercial group at the Post. Quite literally focused on how we drive business across advertising, subscriptions, events, and other things that we do on Washington Post proper. Because of the way we’re structured, we’re also the R&D team.

I’d like to say we’re a practical R&D team because as we come up with ideas or products or new business solutions that transcend the opportunity on the Washington Post, we spin those out and create new businesses out of those. Many of your listeners, I’m sure are familiar with Arc Publishing, which was our first stab at building a business by leveraging the reputation of the post but building it outside of the Washington Post.

Most recently, we’ve launched another business, Zeus, which is really focused on advertising technology, and building a new advertising infrastructure for the media industry at large. The team’s big. I think we’re north of 100 people, very engineering heavy, hence our ability to be able to come up ideas ship, and then bring them to market. It’s a blast. I boomeranged at the Post, I love the Post and they’ve given me the keys to drive the car in many different directions as I see fit.

Jacob: How did you find your way to working in the media industry because I find most people either know they’re going to be in media because they want to be a journalist, or have no idea they want to be in media and just fall into it.

Jarrod: Yes. I’m definitely an accidental media executive, I’d say. I know that’s somewhat cliche because I feel like the most interesting people in media do take a rather strange course to get to where they are because I do think that in the media industry, the most interesting people are actually non-experts in the area that they’ve now become experts in. I wanted to be a music journalist.

I still, a decade later, really want to be a music journalist. I actually co-started a blog called Stay Thirsty not the Doseki’s version [chuckles] unfortunately, but staythirsty.org where we started blogging and interviewing musicians and going to shows. I really always wanted to be a rock star but I’m a very amateur musician, I’d even say shitty across a variety of instruments. I thought that the closest way that I could get into being into the music scene or “trying to be a rock star” was writing about it.

Started the blog, did a lot of work there, interviewed a lot of huge artists, Bill Ward from Black Sabbath, Dave Davies, from The Kinks, My Morning Jacket, Animal Collective, a ton of record label executives from decades ago to current and it was really a blast. Anyone who works in that space knows that it’s not a very lucrative business, I’d say. Eventually, I had to find a real job on the side. I applied for a job at the Huffington Post, the blog on Craigslist.

I was really just looking for anything where I could leverage my editorial background to get a paycheck. They wouldn’t hire me for an editor role. I think it was an associate lifestyle editor role, but they did come back and they said, “Look, we’re looking for people who have editorial and creative backgrounds to think about how we could start building products around our business, which was really interesting because at that time, I was like, sure if you’ll pay me a little more, I’ll do it.

I think a lot of media operators do think that way. It was really like the start of something really interesting throughout my career, which was this understanding that so many creative people feel that working on the business side, is restrictive to their ability to create. You find at least within media companies a lot of people who are “creative” want to work in the newsroom or want to work in design or want to do things that are really tied to editorial.

I found that on the business side, there really wasn’t a lot of competition for being able to come up with new ideas, being able to test things. It was really an amazing venue to really do whatever you wanted because if you were able to make money while doing it, then everyone lets you run. If you were trying to do new creative stuff on the editorial side, it had to go through an editor and designer, and everyone had an opinion on the homepage.

On the business side, they were like, “Hey, look, if you could bring in 50K or 100K, go do whatever you want or build it with whoever you want or build it through whoever you want.” That was the start of it and Huff Post. I started native advertising there, which at that time, we called social marketing. It was this idea of how can we leverage software to better tell brand stories because display advertising was pretty shitty and we really wanted to lean in on what made us unique, which was our CMS and our software, and really thinking about what that meant for brands and driving revenue on the advertising side. That was it.

That was the explosion of me realizing the opportunity that I had on the business side of media and how it was very, very open to risk-taking as long as these were calculated risks and helped drive a lot of attention and value for the brand. Since then I’ve been hunkering down going back and forth throughout many industries, but really focusing on the business side of media tech, and new ventures because I just find that from a creative perspective, it allows for a lot more creative flexibility than I think any other area within a media company.

Jacob: What’s interesting about your career is you came of age at the same time many of these VC-backed media companies were really getting all the press in media about media. In many respects, the Huffington Post was the originator of the idea or the thesis behind many of these VC-backed media companies. In the end though, they’re all really struggling to just break even and become profitable businesses. In your opinion, where did it all go wrong?

Jarrod: It’s really interesting because the Huffington Post was a VC-backed media business with a very good exit. I think it was somewhere around $315 million cash acquisition to AOL at the time. At that time, when the Huffington Post was acquired, the way that we thought about media and building a media business was very different than the way that we think about it now.

I currently work at the Washington Post. I remember being at the Huffington Post and not even acknowledging the Washington Post, not even thinking that they were going to be around in the next five years. We quickly drove past New York Times. We drove past CNN in traffic and it was really just a game of how can you distribute content further? How can you be more discoverable? How can you be more socialized?

We literally built the CMS to do that. That any writer or editor was able to simply put in a headline that then transcoded to an SEO headline to a social headline and connected around the web links, and then deep linked within the article itself so that we wanted SEO and we wanted social and it was less about the reputation of the brand and more about being the first linker URL to reach that user. It’s crazy to think about it.

A decade ago, if you would Google something. I don’t know how much you focused on the URL that you were clicking on or even the brand within the URL that you are clicking on. You looked for something or your friend shared something and you clicked it. Now especially, around 2014, 2015, 2016, that totally reversed. Media started to become a reputable business.

You made sure that anything that you clicked on was from a source that either you knew about or that you trusted, and the game completely changed. I think that it only focuses on one component of where venture-backed media went wrong, but it highlights a critical point, which you and I talk about often when it comes to brands, is that reputation is long-term. Building a media company that distributes content and chases clicks and views is a good high short term, but in order to really grow a business, you have to have brand affinity, you have to have reputation.

The consumers have to wake up every morning and want to engage with your content or if your brand went away, they’d severely miss it. I remember at one point, I think it was in 2017, I was thinking about, well, if you close your eyes and you woke up and you didn’t have that Buzzfeed listicle or, you weren’t able to watch a Vice video or ripmec.com, you weren’t able to get that content. Do you really care?

I’ve never come across anyone that was really so hung up on the idea that if those brands didn’t exist, that would be a problem, but when you think about the Times or the Journal or CNN or Wash Post, through decades of reputation building and value that they’ve delivered to society and readers, they’ve built that credibility. I think venture-back media came in at a time where advertising was a very lucrative business that dug in on scale.

I forgot who originally came up with the term, but venture storytime is a really interesting theory, which is basically when you build a business, you know that as you achieve and grow scale, or you knew I should say, that you’d be able to monetize that scale and attention via ads. $100 billion business, emerging platforms like Facebook and Google totally dominating that idea.

When VCs were looking at the idea of investing in media companies, the notion was, okay, we’ll give you this money upfront knowing that you’re going to do whatever you can to drive scale, and then we’ll be able to turn on the ad engine and the money will start coming in. Well, that stopped happening. That really stopped happening this year, but signs were really showing, coming up to it when Facebook and Google started dominating the advertising business, it was a lot better for brands. It drove more value for them, and media companies controversially, but I believe this, really became a nice to have, so you had to focus a bit more there.

Now more than ever, programmatic CPMs are low. There’s changes in cookie legislation, the ad business as we knew it is essentially crumbling and is going to be redefined. What VCs invested in from a media perspective is completely different. Now, some I think were smart, right? Buzzfeed, I think for investors, they thought about new ways to do advertising. They even doubled down on native ads and ignored programmatic advertising during its peak. Then they came to it later unfortunately when it’s become somewhat too late.

There are other companies that have thought about subscription models in venture, but I think the biggest miss when it came to venture back media was this idea of venture story time that, well, if we invest and put money behind this, and if scale is achieved, then we’re really going to be able to rake the cash because that’s how the internet business works. Now, the internet business has turned around and the consumers have turned around and the brands have turned around. Essentially, every element of that economy has said, no, sorry. We’re changing the game and the value exchange is completely changed, thus the investment in those companies and those assumed outcomes have completely changed.

Jacob: I want to spend a little bit more time on your career and then we’re going to dive into the ad business because I think you and I talk a lot about ads, but before we do, at one point in your career, you decided that you wanted to try and run a crypto company, and while PoET ultimately didn’t really work out the way we all thought it might have, what about blockchain technology intrigued you and made you think it could be applicable to the media business?

Jarrod: Blockchain came to me. I didn’t necessarily seek it out, but it was a serendipitous time when I was going through some philosophical thinking about what the media business looked like today or at that time, 2018, and what the media business should look like tomorrow. It’s really interesting. At the Post, at that time because again, I worked– I created the R&D team at the Post and ended up leaving and The Post PoET came back.

What was really interesting in all of the conversations when we spoke to readers or when we’d strategize internally about our business is that people should subscribe to the Washington Post because they should support the effort and the work that journalism does and that it’s necessary. While I believe that personally when I think about where consumers spend their money, it’s usually not in the element of support, it’s usually in the grouping of need.

Like, I don’t support Spotify. I need Spotify in order to listen to music offline when I’m on the subway or when I was on the subway and I don’t support Netflix, I need Netflix. Frankly now in this creator economy, there’s some parts of– there’s some creators that I do feel I support, but there’s some creators that I essentially need. I felt like it was very interesting to hear readers respond that way.

Hey, do you subscribe to the Post? Of course, I support the Washington Post. It started to jog my mind a little bit to say, well, journalism is important and our product is valuable, but we need to start thinking about how we put attribution against that. How we start to really make journalism a business that is quantifiable to that consumer where it starts to move away from just being something that you consumers support and move towards something that you consume or need or value, and that is more so critical.

As I started thinking about that, and also at that time as we just discussed, the advertising business was starting to evolve and the Post was very dominant on the advertising side of media. We were, fortunately, able to see trends a bit sooner than I think of l a lot of other media companies. I started to think about how we started to put value and attribution and quite literally quantify the business behind journalism and the business behind creative work.

At that time, I was approached by PoET rather aggressively. At first, I was like, fuck no. I’m not going to blockchain. Then they came back and they came back and I started really thinking about what that software did as an application and whether or not blockchain could be an interesting approach. Again, PoET’s original thought process was really around attribution. Being able to put creative works on the blockchain, being able to show its permanence, and being able to essentially have a catalog of information that was immutable on the Bitcoin blockchain at that time.

I went over to PoET and that’s really what we started working on. We started working on this idea of whenever someone creates something, how do we create an immutable record of that creation? What comes after that became even more interesting. When you start to think about how creators manage the distribution of their work, when things are on the chain and when the creator has a bit more control as to how that gets distributed there’s a wealth of opportunities that start coming to your head.

One example which I always use is when you’re on Twitter and when you post something on Twitter, say– this is a shitty example, but say I’m in the streets of Manhattan and I take a selfie with Kim Kardashian and I post it on Twitter, I basically do that for my friends to see, but all of a sudden you’ll see TMZ app mention me or People app mentioned me and say, “Hey Jared, I’d love to use this. Can you grant permission or can I use it?”

At PoET, I was like, well, if we’re able to stamp this IP on chain, well now the creator gets to develop a contract that starts to say, “Sure. You could use it, and here’s the contract for use.” You think about the wire service and media and how that’s completely dropped in this new digital economy. When you start to give more control to the distributors of that information, then you start to bring that value back to content.

There’s a lot of different things that work through there that frankly, I’m still obsessed with and working on I’d say on the side and thinking through on the side, but in short, you think about the media business, and you think about how so much emphasis has been put on content and how commoditized content has really become. I don’t have to tell you how much you and I are talking on a Saturday.

I don’t have to tell you how much work you put into creating this content and all the sweat equity and all the thinking and all the distribution for that content to just be commoditized or ripped or misused, or misattributed. I think there’s still big business there and that’s what attracted me most of the PoET. I still think that that’s a huge opportunity today, and one of which even at the Post where we’re thinking about how to build products for– not just for our own business, but also for the larger market.

Jacob: Let’s talk about advertising now because while everyone else is really excited about subscriptions, you’re one of the media executives out there still saying, wait a second everyone, there’s a big business here let’s pay attention to that. Brian Morrissey, formerly of Digiday, which is still going to take me a little time to get used to saying formally, says that the original sin of internet media was separating the audience data from the media impression because ad inventory ultimately became commoditized.

However, as you’ve said to me, in many of our DM conversations, ad agencies only want to buy via programmatic channels. How do we correct for this sin when the major buyers only want to buy it one way?

Jarrod: I think there’s never been a more obvious moment of disconnect between publishers and advertisers than as we’ve seen when Coronavirus hit. I think when Coronavirus hit and media agencies and brands paused campaigns, there was a bit of a slowdown in response to that, but also for the campaigns that we’re running, brand safety, which has always been around and important for advertisers and brands to know where they’re running and what they’re running alongside.

It started to become amazingly obvious that publishers who were creating this content and much of which at that time was about Coronavirus because that’s what society needs to be informed about, 80 to 90% of that coverage was being blocked by advertisers. On one side, on the advertisers and brand sides, they create block lists of words that they do not want to be advertising alongside or advertising against and they’re really generic.

It’s like Coronavirus, or COVID-19, or whatever, but on the publisher side, sure, there is some content around COVID and COVID-19 but there’s also hey, here’s 10 things that you should be cooking during COVID, or here’s five children’s books to read to your kids while you’re home during COVID and publishers weren’t able to monetize any of that via ads because of these blocklists.

I had a ton of conversations with a lot of ad tech companies because from a publisher perspective, advertisers say they want to support quality journalism, advertisers say they want to advertise alongside of it and we as publishers, we really focus on two major thing. One, how can we drive the best user experience for our readers, and two, how do we drive an amazing advertising experience, both for our readers, but also that’s beneficial to brands?

While we think we’re working towards achieving a goal, which in the end should be to get and attract more advertisers. In fact, by doing that, we also start to recognize that, okay, a lot of these advertisers have different sorts of structures and setups that they need to do in order to deliver on their business. Ad Tech has always gotten a bad rap and usually, they’re in the acronym world, like the SSPs and the DSPs, and the middlemen, and why are they involved and why are they distributing this way and what data are they collecting? It’s all bottom of the barrel.

Through my conversations with ad tech companies, what’s most interesting is they’re like, hey, we represent the brands. We’re not just coming in and trying to intermediate, even though I don’t necessarily buy that I think the last ad tech loom escape was 7000 fucking companies. It’s absolutely insane how much goes through that chain for ads to get to the publishers, but it wasn’t interesting point of view because you often think of the ad tech companies as the problem, but they are also representing the needs of advertisers not to say good or bad, but there is a relationship there.

We want to as an industry, and I think we’ve always had a desire to, on the publishing side create native and unique, and valuable advertising products, on behalf of advertisers that drive user experience. You’ve seen that with native advertising, and the creation of brand and content teams. You’re seeing it right now in the newsletter business where it’s very clear what ads are coming programmatically via alive intent and then what ads are native and fluid and look very, in fact, beautiful and unique within that user experience.

It’s hard. It makes the business harder as you try to think about things that are more unique to you as a publisher and more native. Even though they drive a better user experience, it starts to become another line item, it starts to become another creative, it starts to become another direction that the advertiser and the agency needs to work for. You think about programmatic, we talk about this often, but when people talk about programmatic, they’re usually talking about the creative.

They’re saying programmatic advertising sucks, I hate those programmatic ads. Andy Wiseman mentioned me the other day and asked me a question. What are those horrible– the worst ads on the internet are the ones the products that I’ve already bought and that follow me. Those are retargeting pixels, usually from Corteo, or Amazon, and they’re usually broken. They’re supposed to know that you purchase this, and they should recommend something new, but 99% of the time, they don’t work and it’s broken.

That’s what we think of when we talk about programmatic advertising is the creative, is that experience, and it’s brutal but programmatic advertising is really just automated buying, and Facebook which is 98.9%, advertising revenue in their business is a programmatic advertising business. Brands log in, agencies log in, they choose their format, they choose their targeting, and then they execute and deliver.

Same with Google. All of those search ads is brands, advertisers log in, they could bid or they could do it right through an auction, but programmatic as a buying mechanism is not only the future, it’s here. It’s how things work. The struggle for publishers constantly is, you want to build something that’s unique because you want to have a direct relationship with your consumer, you want to build something that’s valuable for them and that’s native for your platform that drives a great user experience because we know that that could drive results.

Advertisers really need to be able to execute at scale and they really need to hit their conversion goals which are often things that are highly, highly efficient in the Facebook ecosystem, in the programmatic ecosystem, in the Google ecosystem, and when I say the programmatic ecosystem, for some listeners that may not necessarily be in the ad business, is that advertisers have relationships with the DSPs, the demand side platforms that help them execute their buys at scale.

Where there’s direct advertising, which is an advertiser going directly to the Washington Post, or going directly to a media operator, or going directly to the New York Times, coming up with a plan, it could involve a bunch of different things, but the relationship is one to one, advertisers through a DSP are now able to say, I’m going to use this single creative and I’m going to advertise across the New York Times, The Washington Post, The Wall Street Journal, any website or publisher on the internet, and I don’t have to pick up the phone and talk to them at all.

When you think about that efficiency and scale, especially if it converts, then that’s insanely valuable for an advertiser. It’s efficient, it’s valuable and it scales. For publishers, they really need to think about how they could build experiences that are either seamless or efficient on a direct capacity or start to think about how products and tools that they build allow that to extend. That’s the conundrum that we’re in.

I think the feeling around advertising and the experience that we want to create as media companies isn’t necessarily in line with how advertisers and agencies want to buy across the web and that’s a constant iteration and I hate the term innovation, but it is an innovation. You have to work yourself out of the ideas and the structures that you’re currently in to create something new, to create something enticing for that buyer, that advertiser.

It’s an ongoing struggle to really figure out how to get more of those dollars directly from the brands rather than indirectly when you are exactly what you defined as what Brian Morrisey said, you do just become your audience. An advertiser doesn’t necessarily want to advertise on the Washington Post when they buy programmatically, they want to reach a particular user that may at that moment be on the Washington Post.

Jacob: I guess this is a good chance to tee up a conversation about some of the things that you’re working on at the Washington Post. One of your major products is Zeus, which rather than me trying to explain it, I’ll ask you to explain it, but how does that technology help publishers and ad buyers have that perfect storm of being able to buy programmatically while still not making all added inventory commoditized?

Jarrod: Zeus was an accidental endeavor that turned into a huge business for the Washington Post, and when I say accidental endeavor, back in 2015, I founded a group called RED at the Washington Post, and it stood for Research, Experimentation, and Development. The whole idea around it was that at that moment, ad blocking was huge. Every single publisher was trying to fight ad blocking by blocking readers from coming to their site if they used an ad blocker.

We looked at the landscape and said, “Well, shit.” The ad experience across the web does suck. The ad units aren’t ideal. The user experience is not ideal. You have pop-up ads, you have things everywhere, and instead of us going the direction that other media companies were going, which was basically, we understand, user, that the experience is awful, however, this is how we make our money, so deal with it.

We took an approach to basically say, look, let’s be honest about the industry. The ads do suck, the experience does suck, and instead of us trying to figure out how to climb uphill against the obvious battle, which was that experience, let’s create a separate incubator group that actually tries to build ad or revenue products for brands that is in fact better, that is in fact more fluid, that translates better, that is more native. We did that and we built a ton of products within the RED group over the course of two years.

We built a lot of technology that was really focused on facilitating brand assets into more creative native assets. One great example was one called Flex Play because social video was huge, but we noticed with Social Video that 80% of videos on Facebook were watched without the sound on. That’s why you saw like now this news and all of these creatives build close captioning overlays.

We knew that the relationship with our advertisers when it came to video advertising was usually just taking their let’s say video creative that they were going to use on television, and squeeze out those assets to put on dis to put on mobile or desktop display, and we essentially got that asset and would run it as a pre-roll. We built a tool that basically said, advertiser, give us that video 15, 30 second asset, and in our software within minutes could transcode it to auto start, auto stop, animated gif with closed captioning.

Where now we created an asset for advertisers, but also to run on the Post that became a social video asset with their existing asset, and that became valuable and unique. That was an example of what we were building with RED, and it like blew up our advertising business to the fact that we were first-time profitable. I think it was back in 2017 on the heels of a lot of the work that was being done there.

In 2017, Facebook Instant came out. I think it’s five years ago to the day, I think actually, or two days ago it was. The Washington Post, at that time, in all of our infinite wisdom was going to be the only publisher to go all in on Facebook Instant. We said, “Look our readers are there, Facebook is a huge partner. They’re building this experience that promises to drive the best user experience for readers to keep them within the Facebook environment. It was going to have a clean ad experience and we wanted to go big or go home, so we were going to go all in.

We go all in, and at that time, AMP was picking up as well. Again this promise of platforms facilitating a better user experience for content and journalism. I’d say four to five weeks into the program, which was going well, we’re all sitting around a table, the executive team and we’re like, “Holy shit. If all of our content is available on Facebook Instant and Google AMP, and if the experience is faster and better than what they get on the Washington Post, then there is zero incentive for any reader to come to the Washington Post for anyone to subscribe to the Washington Post for an advertiser to advertise on the Washington Post.

We had a crisis moment where we basically sat down and said, “Okay, we need to build an experience on the Washington Post that’s on par, if not better than what our readers and advertisers are getting on Facebook Instant on Google AMP. We looked around to other publishers and basically said like, “Who’s doing this? Whose site is fast? Who has high viewability? Who’s delivering an experience end-to-end that’s completely fluid?” It’s not that nobody was, it’s just that there was no universal way to do it.

We saw that some publishers were struggling, some publishers had an idea of what they should do, but there was no real way to do it universally at scale that was seamless. The second thing is we went to Google. Google was a huge, and still is a huge partner of bars, and we said, “Look, publishers are struggling with site speed, with viewability, with delivery. You’re the largest ad server on the web. If you could solve this problem for us, you could then bring it out and it’s a big business.”

Google’s response was similar to what we solved when we looked at publishers. Look every publisher does things differently. There’s incremental things that we could do to improve, but net-net it’s a publisher problem. It’s not something that we could solve via ad tech. At that time we were like look we have two options. We can either struggle or we can try to solve this problem, which was really focused around speed and delivery in a universal framework-type way.

Very luckily being owned by Jeff Bezos, we have the mentality and engineering structure to say let’s try to build it. Out of that came the core Zeus product, which was Zeus performance. Zeus performance is a technology framework that powers and delivers all of our revenue software, all of our partners and all of the things that are proprietary to us on the Washington Post.

It’s an end-to-end software. From the programmatic intake side, which in the industry we call a header wrapper to the JavaScript libraries that help function and decide how ads are delivered, lazy loading, predictive loading, smart scrolling, batching of network calls. All different software components that focus on how those technologies deliver, and then as things go into Google, which is the ad server, Zeus performance is responsible for every single advertisement that comes out of the Google ad server, whether that’s direct, indirect, anything.

What we found when we solved that problem is that, wow, the Washington Post became really fast. We loaded everything on the Washington Post including ads in under two seconds. All of a sudden, and mind you, this is back in like 2016, ’17, we were like whoa. As viewability starts to go up on these, these ads are programmatic CPMs and even our direct CPMs, because of the relationships of speed, were going up significantly.

Fast forward, I went to the blockchain, I went to PoET, and then I was brought back to the Post for a few different reasons, but one of which was to launch Zeus for the industry, and we basically decided, let’s launch this in market. Let’s put Zeus performance out there. We already had an existing business called Art Publishing which is more on the CMS side than the workflow management side.

We knew that we could create another Software As A Service arm under the advertising umbrella. At that time, we didn’t know if it was going to work the way that it worked for us as it would work for others. Again, the main thinking behind speed and viewability when it comes to ad tech in the open web is that sure, we could solve per viewability just by lazy loading, but then we’re going to cut half of our impressions or we’re going to cut our impressions in half because lazy loading basically means don’t load ads until they’re in view. The other side is, yes, we could sell for viewability and speed, but it’s a design problem. The newsroom will hate the idea of us putting sticky ads and banners everywhere. We basically had to prove that with Zeus Performance, the software, we could essentially install a framework.

That we’ll both drive more revenue for websites and publishers, drive higher viewability without losing impressions, and drive a better experience without changing any design. Fast forward to now, Zeus Performance now has 115 partners since, I’d say February of 2020.

All of these partners are on the Zeus Performance software, which manages their entire revenue framework. Think about that. Think about Zeus Performance as the AWS for advertising, for publishers. All publishers are on it. I like to say it enables independence. They could choose which partners to work with, how they want to lay out their site, how they dictate their strategy, that’s completely up to them. However, they’re all connected to one another now. Every publisher on Zeus Performance is exceeding 75% viewability, is driving higher CPMs, is driving fast site speed.

Now all of a sudden when that benefit is for them and they’re driving incremental value and revenue in the short term, by both reducing the fixed cost of having to be an AdTech company and giving it to Zeus, but also increasing revenues by having better performance and better delivery. Well, now think about what we build on top of that. How do we build a platform like a Facebook or others out there that are built on top of the Zeus Performance software. Which is the promise of high viewable, high delivery, we’re building first party data mechanisms, we’re building contextual mechanisms, we’re building buy site tools.

We’re building all of these different things with the goal of basically saying, look, premium content is important. We say authorship and journalism and creator economies are critical and are valuable, advertisers and subscribers because that could go on top of Zeus too, want to be alongside of that. Brands and advertisers need a platform, and need a network that’s going to drive their goals.

All of those things that we built Zeus Performance for, high viewability, speed and delivery, attribution, contextual, are all built with the thinking of what do advertisers need and brands need, and evolving an ecosystem there. I know that that was long, but I don’t know how many people really knew the background of Zeus so I wanted to dive in.

Jacob: I want to leave advertising for right now and go to two of the main feces that you’ve presented over the past year. The first is, the need for media companies to look like record labels. What does that mean? How do media companies evolve to look like a record label and ultimately, how does it change their business in which I believe is your opinion, a good way?

Jarrod: Media companies. This, actually, it’s funny you asked before, like what enticed me to go to POET and what was going through my head at that time. I hinted at what was happening from consumer sentiment when it came to subscriptions and just this idea that we weren’t really putting the right attribution and value on where the work was happening. In a similar way at that time, there was also this belief, which now is proven in that we need to build businesses around the creators themselves.

That creators are building a brand of their own, they’re building individual reputation and media companies had not at that time.

I’d say, still have not thought about how to structure their business in a way that benefits them from encouraging the success of individual creators to go and build their brand.

We hear that today, in conversations when you see what’s happening with Substack and when you see what’s happening when people go to Patreon, or when people go “independent.” It’s a very black and white issue. It’s like you either work at a media company and you build for that brand, or you go independent. I don’t believe that it has to be that black and white.

I believe that there is a gray area, which in fact is a tremendous opportunity mainly for media companies or larger organizations that are willing to acknowledge this. To think about how they in fact build a environment and a business that attracts and keeps that idea of going independent within their own garden. What I mean by that is, as it relates to record labels is that media companies right now, in fact, when you hire, you are bringing in a lot of different roles and responsibilities. You have writers, you have editors, you have designers, you have people who work in video, you have people who work in tech. It’s really to build around the brand. You and I talk about this all the time.

I think in this conversation we have to take news a little out of it because news becomes an outlier. You think about the relationship that these media companies have with these individuals and none of it really besides the fact that media companies do in fact build individual brands and that is a tremendous value for many individuals. They haven’t really built a business around what that relationship looks like and the value individuals really see with the media companies themselves. Here’s an example, every relationship with a media company and their employee from an economics perspective is the same.

On the input, it’s basically like, you’re a salaried employee, you get benefits. Those are the perks, but we keep the IP. Everything that you create here is basically built under the Washington Post umbrella, but you do that because we pay you. We’re paying you to do that job. We’re giving you benefits to do that job. That’s the deal. What’s interesting is, especially now in this creator economy is there’s been a lot of discussions, I know, about BuzzFeed and a podcast they had. Where now creators are like, whoa, our name is on this podcast and we want to be able to monetize this, or we want to be able to own this IP or get royalties from it. Media companies aren’t structured that way.

One idea of media companies that record labels is to say, for some creators that want to come in and get the benefits of a media company and build with us, but also want some incentive to build their own brand. Build something that they feel is somewhat independent, instead of the traditional salary and benefits have some options. Which are like, sure, you can come in and here’s the structure and here’s what it looks like, and we own the IP 50-50, or there’s a lot of different variations that could happen there.

What I love about that thinking is that one, it really emphasizes the value of a media company, ie a record label, which gets lost today, which is media companies are brands. They have reputation, they have an audience, they are able to distribute, they have benefits, they have what I call creator confidence, which is editorial design. All of these things that help you as a creator be better. They have comfort insurance and libel and things that allow you as a creator to focus on what you do best, create. It really puts a huge spotlight on the idea that, wow, media companies are in fact probably more valuable for a creator than a creator going independent.

If you are able to structure the relationship in such a way and put an emphasis on all the things that media companies are bringing to the table. On the outside, you have the upside incentive model too. As individual creators drive more subscriptions for a media company, as individual creators drive more revenue, as individual creators in fact want to leave. Then there should also be a value incentive for media companies as they invest in these creators to also be okay with the fact that, if I build a celebrity out of this individual and if they leave, that’s great because it’s going to benefit my business long term.

An example there is, what if the relationship between a creator and the media company is, okay, we joint own this IP and whatever salary structure is set up in this way, and they build that together. Then when that creator leaves and builds their own business or sells that IP or distributes that IP, there’s still a value return for that media company because they are both co-owners in this. You essentially let your creator fly. I really like for multiple reasons, I also love this idea and I’m obsessing over this idea because you hear all the time when people start to go independent, the first thing pundits or whatever you want to call people on Twitter, like to say things like, “This is why media companies shouldn’t invest in creators. Because they’re the brands of when they invest in creators, creators then leverage that and then they go out on their own. That’s just because the economic incentives aren’t set up that way.

If you’re a media company and if you don’t think that you should be investing in individual brands and building creators, you’re completely thinking about it wrong. You’re doing it wrong and it’ll burn you in the end. You really do need to think about how you attract talent, how you are in fact becoming a talent company, how you put a lot of the values and benefits that enable these creators front and center as why they are working for you and what you bring to the table. Think about the economics as an exit, as when they grow and when they evolve, as you boost them up, how do you media company financially benefit from doing that? That’s from the traditional media company point of view.

Then there’s also all these amazing things happening, which I know we could dive in depending on where you want to go. As people go independent, what does success look like? Well, success looks like they start to grow, they expand their business. You’re seeing this with everything bundle. They start to bring more people together. They think about what they need in order to operate as a micro label, aka, new media company and they then build and start to structure themselves as this next entity, next media company as well. The end goal is becoming a media company.

It’s more so traditional media companies need to think of themselves as record labels and adjust their business to drive value out of structuring and building talent and releasing talent. Also emphasize what they are able to do, that people who go independent can’t do around creative comfort and creator confidence. Then on the flip side, these new software, like companies like Stir and agencies that are coming out, they’re starting to think about how they can fill those gaps for these independent creators. That are knowingly going to need this, but may not want to hire an editor, hire a designer, hire someone to do accounting, hire someone to do finance.

They’re rewriting those relationships media companies used to have all these things in-house. Now this era, new media company could exist where those things are more licensed or networked and not necessarily have to be under the hood of the creator itself.

Jacob: Then the second thesis that built on the record label is this concept of the Renaissance Creator. Can you explain what that means and what impact that could potentially have both positively or negatively on publishers?

Jarrod: The idea of the Renaissance Creator and self promotion and plug, I strongly encourage anyone who’s interested to read it because I for sure will forget all the details and research and work that went into it. The idea of the Renaissance Creator is basically around this notion that, when we talk about creators going independent, we don’t really define what that looks like in a meaningful way. I think when originally people started to go independent and especially those that were creating brands on Substack or even as early as brands on Medium, it was always this idea of, oh, this is someone who has written or created at a media company.

Whether it’s a Vox or a WaPo or a Wall Street Journal and who has accrued an audience there and who has likely accrued an audience on social and is now going to build a brand on their own. Because they have this audience and they’re going to port it over and through research and just obsessing over this space. After the media as record labels article, I started to realize, especially in my conversations with you, Jacob, it’s like, holy shit, it’s actually the inverse, right?

The most successful independent creators aren’t going to be those that worked at media companies and have now decided to become entrepreneurial and build a business of their own. It’s actually going to be people who have either worked in business or who are previously entrepreneurial that have a unique point of view and are now going to set out and create and put that point of view out there. Where this becomes insanely obvious is that the misconception originally of the independent creator was, oh yes, like you should go independent, celebrity writer or well-known writer because you are the brand. You should just focus on creating.

By coming to this platform, Substack or Medium or whichever, you could just focus on creating and then you turn on the paywall and everything does the rest. That’s in fact insanely untrue. [chuckles] When you go independent, you are actually saying, I am going to focus less on creating and I am going to focus more on building the business of myself or building the business of the individual. Whereas before I might have just been focused on writing about tech in a tech vertical. Now all of a sudden, I need to think about audience development. I need to think about how I’m going to make money off of this business.

I’m going to need to think about accounting. I’m going to need to think about recruiting as I hire. I’m going to need to think about all of these things that will never a poor focus or part of my job. What’s really interesting is that media companies as they exist today, especially traditional ones are insanely siloed. Outside of church and state rules, if you work in a department, you really just work in that department. It’s not like if you work as an editor in the newsroom or a designer in the newsroom, you all of a sudden have all this opportunity to gain acumen as to, okay, how does advertising work? How does subscriptions work? What does consumer marketing mean?

What does it mean to have a SAS business? How does [unintelligible 00:57:13] what’s a P&L? No one in the capacity of their job, even at the most executive levels has any idea about how those things work. As those people leave and go independent, it’s like a holy shit moment. Wow, now I have to learn all of these different things that I’ve never had to learn before. I think that that’s why you see many writers like Stirs for example, Stir did pre-subscribe and there was a drop in the whole drop in. I love this idea. The whole drop was like, nominate people that you would want to go independent and mention how much money you’d subscribe to them to encourage them to go independent.

I think what we’ve learned is that the majority of people, especially writers or journalists, they want to be at the media company because they want to just focus on creating, they want to just focus on journalism. They like the perks and benefits of that creator competence of having an editor and design and distribution. They’re able to continue to build their reputation and they work for more key brands. A lot of journalists and writers, I’d say 95% of them, would rather be working at a media company than going independent. The inverse is a whole different story.

You see what’s happening today. You see what’s happening with your success, with the media operator. You see what’s happening with Web Smith’s success with 2PM, you see what’s happening with the Everything Bundle. These are people who were entrepreneurial and who wanted to build a business and went into this knowing that we are going to, or I am going to build a business. Part of my job of building that business is creating an experience, creating community, creating content that people are going to want to pay for or advertise against.

In definition, the Renaissance Creator is a creator in this independent economy that has the expertise and the knowledge of everything that it takes to drive the business of themselves, to drive the business of the individual. It’s not someone who is just going to be a writer or not someone who’s just going to focus on this area. It’s someone that is willing and able, and wanting to really learn every element as to how to become an entrepreneur and how to build a media business, and take that forward and drive that forward.

Jacob: All right, so my last question for this episode is whether you’re talking to publishers or creators and everything you know about how the ad business is evolving, about record labels, about the Renaissance Creator, taking all of that into consideration, what is some advice that you would give either a publisher or creator to help them succeed in the business we’re in today?

Jarrod: I’ll start with media companies. I think media companies today really need to rethink the relationship that they have with their creators. What that looks like both from an economic perspective, but also from a creative and relationship perspective. Then how they could adjust their business to accommodate and focus on that. I think a great example is Axios, which I’ve talked about often. Which has really thought about the business of the individual and what that means for a media company. They are the best example of that. I think you’re seeing the New York Times slowly edge into that, whether they’re doing that on purpose or not, you’re seeing a lot of emphasis on individual talent. You’re seeing alot of investment in IP through Hulu and Netflix and relationships there.

Media companies need to think of themselves as talent companies i.e. record labels. I’ve said this before that in two years, media companies and talent companies will be the same and everyone’s like, that’s already here. I’m like, yes, talent companies are already structured as media companies, but there’s no way in hell that media companies are structured as talent companies and they need to move quickly to figure that out. What I’d also say is that independent creators need to really think about how they open up opportunities for themselves and not confine themselves.

I think there are a lot of platforms that are out there today that offer service and valuable service, but there should always be this idea of, how can I evolve and how could I grow business? There’s never been a media company that has been successful or insanely successful without diversifying their revenue streams. What I think is really interesting with Substack, and I’m watching this in real-time along with everyone else, is that as I mentioned, I think independent creators, especially ones that are leaving media companies, they’re basically first-time founders. They’ve never really have gone and built their own business or have never really jumped out on their own.

They’ve either worked within a media environment or they’ve created a blog or structure or media company of their own. The idea of going and jumping into this new world and building a business around themselves is completely new and in fact terrifying. I think Substacks done a really good job transitioning those creators that are looking to drive a business in a way that says, yes, you could come to this platform, you could bring your audience, or you could build your audience and you could start to drive revenue and you have things structured and set up.

I think you’ll see as those creators start to expand or build beyond that, they will start to require or need more tools. They will, I strongly encourage, need to think about how to drive advertising revenue and brand relationships. One thing to think about with advertising is that don’t pigeonhole your idea of advertising against what’s currently happening today, whether that’s– Well, the duopoly Facebook and Google are dominating, so there’s going to be no ad revenue for anyone else, or display ads suck and I don’t want to run display ads on our side.

You have to think about advertising as a relationship between the creator and the brand advertiser. The same way that you think about subscriptions or membership as a relationship between the creator and the consumer. There’s a huge desire and there’s huge business in having that relationship be one-to-one. Everyone who’s building membership or subscription products today knows that. You want to own the relationship with your subscriber, you want to be able to engage them, you want to build that one-to-one because that’s where the business is. The advertising side is the same.

Advertisers have value, they have a lot of money, and they want to align and deliver against both topics and points of view, but also audience. Being able to build the opportunity to have that relationship is going to open up a huge value exchange for independent creators. Right now, what I’m seeing is that a lot of independent creators are either discouraged to think about advertising or they really don’t know what they should be doing. Either they come from, again, an entrepreneurial business backgrounds. A lot of people, especially on the valley side of things are seeing Facebook’s dominance and other dominance and see what ads do and they’re like, ads suck, ads are bad, stay away.

Creators are like, that’s always what I’ve heard and thought of, so I’m not even going to try. Then on the other side, it’s like, okay, well, the ad creative in these things aren’t ideal and I don’t want that. Get that shit out of your head, I’d say immediately, and really think about how advertising looks as a one-to-one relationship between what a brand could deliver and what a creator can bring.

A great example is, like, okay, GE may say, I want to advertise against Jacob Donnelly the same way that GE may want to advertise against any influencer, advertise against any celebrity, advertise against any brands. If we believe that creator companies or media companies and that as creators transition themselves to brands, which are also media brands, then an independent creator should think about their opportunity the same way that the Washington Post thinks about their opportunity. Revenue diversification and revenue products, and all of those things should be completely on par.