How Content Focused Publishing Platforms Are Making Writing Valuable Again
Bill Gates said, ‘Content is king’ in 1996. After nearly 3 decades, this is finally coming true for written content. Startups like Substack, Beehiiv and Storipress allow writers the creative freedom to publish online and build their audiences. I’ve been impressed with the quality and passion of the writing. Newsletters such as Packy McCormick’s Not Boring have influenced my thinking on companies and investing.
In this article, I describe the AdTech ecosystem and how these startups can help writers succeed. This article is for writers interested in learning how the value of their content is set to increase and for investors interested in the opportunities for growth in these startups.*
As a writer myself, I appreciate the joy of connecting through writing and the opportunity to collaborate with founders on my investor journey. This is an area that I am passionate about. However, it’s only after speaking to Alex Pan, founder of Storipress that I began to understand the opportunity in this space. Look out for an upcoming article on Storipress. Subscribe below for more articles on how customer centricity and the founder journey can help startups succeed.
*All opinions expressed are personal. This is not financial advice
Why an Authentic Point of View Is Needed Today and Why It Is So Hard
Journalism used to be about having a bold point of view backed by facts and objectivity. We could trust what we read and it had a huge impact on us. An example would be the determined reporting by journalists Bob Woodward and Carl Bernstein that eventually forced US President Richard Nixon to resign in the Watergate scandal.
What quality journalism looked like – Washington Post reporters Bob Woodward and Carl Bernstein in 1974
Great journalism (and therefore content) is expensive and back then, news publishers could afford to pay. Over the past 20 years, the internet changed all that. The US Census Bureau found that newspaper publishing revenues declined by 52% from 2002 to 2020. Similar trends have been seen globally.
News publishers had to cut back on high-quality journalism to survive. They prioritised quantity over quality. Journalists lost their independence and were forced to write stories that were popular. The result has been a significant loss of trust. People want authentic content, not sensationalist ‘click bait’.
This has led to the rise of Substack which helps independent writers monetise their writing through newsletter subscriptions. However, relying on subscription income alone can limit growth. It’s a big decision for readers to pay for a subscription and many will not do it.
This is why advertising is an integral part of how quality written content is funded. For example, in 1999, the Australian newspaper publisher, Fairfax, derived 80% of its revenue from advertising.
If we want to see more quality written content, we need to make online advertising viable
Unfortunately, it’s tough getting paid for online advertising. The reason – Google and Facebook.
How Google and Facebook Make Advertising Online Hard for Everyone Else
Advertising's goal is to acquire customers. They craft their message to target a specific audience. In an offline world, advertisers could be confident of reaching their audience as nearly everyone in a geographic area would be readers of one of a handful of newspapers.
With the internet, this audience is spread across thousands of websites. Publishers need to show that they have the specific audience that advertisers are targeting. Therefore, what matters is audience data.
It’s hard to find anyone with more audience data than Google and Facebook. They dominate global digital advertising spending as shown below.
It’s not just their popular websites (e.g Google Search, YouTube, Facebook, Instagram etc). It’s also how they control the technology that everyone has to use.
Most online advertising is done via auctions. Here, online intermediaries match buyers and sellers of advertising. A simple description looks like this:
Advertising Buyers - Brands such as Gucci that want to reach a specific audience online. These brands submit their preferences (e.g. target audience, how much they are willing to pay/bid) to the online intermediary.
Advertising Sellers - Publishers and websites such as my humble blog Venture Journeys or your own websites. We will be competing with Google Search, Instagram etc. To participate in the auction, our websites submit our audience data to the online intermediary.
Auctions can be won or lost based on audience data. However, Google and Facebook effectively control the online advertising intermediary space. As a content writer, you are giving your most powerful competitors the audience data that you’ve worked so hard to earn. You can see this in the AdTech diagram below where Google and Facebook combine this data with their own to create Super Audience Profiles.
AdTech Ecosystem: Google operates open AdTech platforms while Facebook/Meta operates a closed (owned and operated by Facebook) platform
Their superior targeting means that advertisers will give their best deals to Google, YouTube, Facebook etc. Everyone else fights over the remaining scraps.
Being part of Google and Facebook/Meta’s ecosystem commoditises a publisher’s audience and results in low advertising rates
Writers of quality content have built trust with their audience. The ‘reward’ for this trust is detailed audience data such as email signups. They could get better rates by engaging advertisers directly.
What’s needed is a content focused platform that combines these individual content writers and connects them directly with advertisers.
We are finally seeing specialised solutions like Beehiiv, Substack and Storipress that have the potential to do this.
How Content Focused Platforms Are Poised to Grow the Value of Written Content
I started Venture Journeys during the extended COVID lockdown in Melbourne. It’s hard to describe the joy of connecting through writing and how important collaborating with founders has been for my investor journey.
The pandemic has sparked the same interest in many others. This led to Substack raising $65m led by Andreessen Horowitz in March 2021. More recently, Beehiiv and Storipress raised $4.2m and $500,000 respectively.
These startups provide a user-friendly, all-in-one solution for writers to publish online and build their audience.
The opportunity for these startups lies in aggregating the individual writers on their platforms and dealing with advertisers directly. For example, Beehiiv can build:
Detailed Audience Profiles: In return for quality content, readers provide writers with detailed information on themselves such as their email addresses. Beehiiv can build a profile of these readers based on the different newsletters they read on the platform. Advertisers get access to a highly targeted audience and writers benefit from higher rates.
Scale: Aggregating writers and their audience allows Beehiiv to engage with advertisers directly and negotiate better rates. Additionally, Beehiiv helps writers build their audience with referral and recommendation tools. Increasing the audience on their platform attracts more advertisers.
You can already see this playing out with Beehiiv’s recent launch of its advertising network.
Unlocking advertising - Beehiiv’s new Ad Network
Content focused platforms are finally bringing transparency to the value of written content, and I expect higher prices to follow.
We are seeing the start of a promising trend. Longer term, written content will be seen as a product that writers can expect to be paid for. The increasing monetisation will lead to the virtuous cycle seen below:
The virtuous cycle of monetisation and written content
Content focused platforms will be the place to create, market and sell this ‘product’. They will be obvious beneficiaries as the value of written content rises.
As a writer myself, this is an area I am passionate about. We are finally seeing startups such as Substack, Beehiiv and Storipress focus on the value of written content.
For decades, writers have seen their work commoditised by the dominance of Google and Facebook. By bringing writers together, these startups can enable a virtuous cycle of quality content and monetisation opportunities.
I became aware of the opportunities in this space after speaking to Storipress co-founder Alex Pan. Storipress is building a solution for entire newsrooms and is at the forefront of this trend.
Look out for an upcoming article on Storipress. If you’ve enjoyed this article, please subscribe below.
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