The Digital Media Guy, Sam Stahl - The Past, Present and Future of Digital Media

This week Carson had the pleasure of speaking with Sam Stahl (Chief Revenue Officer, Food52) to discuss all things digital media. Sam has a long history in digital media and has an incredible depth of knowledge in this space. Enjoy the full interview below:

Carson Clement
Hey everyone. I am super pumped to be joined today with Sam Stahl. Sam Stahl is a self-described digital media guy. He has a diverse background in the media space, including being chief revenue officer at a couple of really big publications, including Food52 and Bustle Digital Group. We're going to talk about all things media, the past media, how media companies have changed over the last ten years and kind of what the future looks like for media companies and how media companies make money, etc.. So Sam, thanks for agreeing to chat for a bit today.

Sam Stahl
Well, thank you for having me.

Carson Clement
If you don't mind, give us kind of a quick overview of your background and. Yeah. Just in in the media landscape.

Sam Stahl
Yeah. So I've been I've been working in media and specifically digital media for the most part for almost 22, for almost 20 years. I have really specialized in building and growing advertising sales teams and helping helping companies maximize the revenue that they're able to bring in. You mentioned a few of the places I've worked. I also ran the sales team at a comedy website called CollegeHumor that was acquired by Barry Diller. I see you mentioned Bustle Digital Group. I was the first sales person there and built out the revenue team there and grew it to very big revenue numbers following. Before I was the chief revenue officer at Food52, which is a ecommerce and content food site that was acquired by an investment firm called the Turing Group at the end of 2019. And since then, I have been consulting and advising digital media businesses on how to grow their revenue, whether that's advertising revenue or otherwise.

Carson Clement
Very cool. Very, very cool. Yeah. I think. I just think that the media landscape and how these media companies work and how they make money, I think a lot of people may not realize just the business model and how much goes into just trying to sell ad space or just just the whole operation. And the the amount of dollars that are flowing through the system is is pretty staggering for me, at least, as I've kind of entered the space and had conversations with people like you.

Sam Stahl
Yeah, it's it's a very fascinating business and industry. And, you know, even in the past ten years, if even five years, it's just changed so significantly. You know, ten years ago, 15, 15 years ago, that the whole game was basically just monetizing eyeballs, that the formula was, you know, grow your audience as large as possible, whether that's organic content, whether that's through paid marketing. I then take that audience to advertisers and sell them to place essentially, you know, banner ads on on on your site. You know, 15 years ago, that really also began people publishers started creating custom content, sponsored content, native content, whatever you want to call it, and pitching that to pitching that to advertisers. And that was something that advertisers at the time were really excited about.

The problem, I think, rapidly became that there was an excess supply of of digital media publishers and digital media content, and everyone was essentially selling the same thing, you know, which was sort of a generic audience and, you know, some form of native custom content, meaning that that sort of became a commodity to itself, you know, with the insane, you know, size and strength of Google, Facebook, there was really sort of a race to the bottom, especially for small and mid-sized publishers that were getting pushed out of the out of the the ad the ad spend, because more and more of that money was getting funneled to fewer and fewer publishers and platforms.

So, you know, I would say in the past five years, it's really been true for for for small to midsize publishers. It's really been, you know, how do we show off not only our audience, but also the power of our brand, the connection to our audience and the loyalty of our audience, but then also figure out other ways to make money other than just selling advertising and custom content. So things like licensing, things like affiliate, things like commerce have really, really, really been essential for these publishers to continue to grow their revenue in an increasingly competitive market.

Carson Clement
Yeah. Would you say when it comes to. The revenue share or the revenue streams of one of these media publishers. What you know, what do you think is kind of the typical breakdown as far as all of the revenue that comes into one of these media companies, whether it's via display advertising, affiliate, commerce, etc.? Do you kind of have a gauge on what percentages, you know, are a typical media company might? Yeah.

Sam Stahl
Yeah. I mean, I think, you know, ten or 15 years ago, you would see that affiliate in advertising would probably be close to 100% of revenue. I think now you're seeing businesses, you know, need to have at least 25, 30, 40% of their revenue be something other than than then direct advertising revenue.

You know, Food52, where I was previously and this is all public information, you know, their revenue was probably 75% commerce sales. So selling things on to dot com in probably 25% advertising sales. And you know, in all honesty, that was that was that was something that made them very attractive to potential investors and acquirers.

So, you know, even even publishers that, you know, have relied on, you know, growing their their advertising revenue year over year for for a long time. They absolutely have to look at other ways to make money. And if they're not able to do that, and you're seeing now with a lot of a lot of publishers, they're either going to go they're either going to go away or they're going to get rolled up into another bigger publisher. You see all of the consolidation in publishers, whether it's Vice and Refinery29 and Group nine, POPSUGAR, BuzzFeed and Huffington Post, BuzzFeed and Complex, essentially just an arms race right now to get as big as an offering as you can, while at the same time making sure that the brands that you, the publisher brands that you do have under the umbrella are do command a loyal audience and also have multiple ways to make money.

Carson Clement
Yeah, I noticed on Food52, for example. Yeah, it's interesting. It's more it really blurs the lines between an e-commerce experience and a publishing experience. And I think that as time goes on, what I the way I think of it is we're going to shop where we spend our time on the Internet, and we're also going to spend our time on the Internet where we shop, where as before. I think both of those were kind of split behaviors on the Internet. You know, you would either be, you know, very, you know, going to Amazon and just looking for something to purchase or you were like just consuming media on Instagram, etc..

But I think with Food52 and some these other things that publishers are doing and even integrated e-commerce on social platforms, it's just all going to kind of become one in the same experience.

Sam Stahl
Yeah, that, that's exactly right. And you know, I think what you're going to find is that is that publishers and brands that really do have a deep connection with their with their audience, like a food52. That means that their audience trusts them.

And, you know, food52 in this specific example, you know, earn the trust of their readers by creating really, really great content. And then they started selling them things. And the selling them things part ended up becoming a bigger business.

You look at brands like BuzzFeed, you know, BuzzFeed has really started doing a lot of what they call live shopping events where they use their own talent and spend an hour on a certain day selling curated things directly to BuzzFeed's audience. And BuzzFeed's audience loves it and buys these things because they trust us as a brand. And, you know, BuzzFeed's editorial, you know, I think the tricky part is that not every publisher has that connection with their audience. And if they don't, you know, a wise anyone going to really, truly be there would be, you know, why are they going to be spending their time and money to buy things that they recommend if they don't have that deep connection?

Carson Clement
Yeah, yeah, definitely. And I think that that trust gap is is huge. What about, you know, when when it comes to being a chief revenue officer at somewhere like Food52, how does your you know, how did your day to day or your strategy change when you had to go from you're just selling eyeballs to now we're like actually trying to create commerce partnerships, I guess.

Sam Stahl
Yeah. It's a fantastic way. Yeah, fantastic question. You know what, what, what, what? At the time we really looked at it, Food52 was, you know, yes, we had a great audience. Yes, we had, you know, good scale. And yes, you know, we were able to create really compelling custom content for our advertising partners.

Again, lots of published, lots of food publishers. In that case, we're doing the exact same thing. What Food52 had, you know, in a particularly unique fashion was, you know, we had the shop, we had, you know, the ability to sell things that are that our audience really love directly to that 152 dot com.

So we thought about, you know, as a as a company as a whole was how do we really combine all the all the things that Food52 does does well and then take those two advertising partners in order to potentially get bigger ad sense from our from our advertisers.

So, you know, were we able to do partnerships that weren't just, you know, advertising and custom content, but were we able to work in, you know, commerce elements to that as well? And what we found is that that that big advertisers, big marketers were really excited about that because they've been seeing the same things pop up in their email, you know, 100 times a day from thousands of different publishers saying, you know, we can do X, Y and Z, but everyone's doing X, Y and Z. So when they you know, when they had a potential partner like Food52 or a BuzzFeed or whoever come to them and say, you know, these are all the things that we do well as a business and we're going to put them all together to help you as an advertiser and help you support your goals. So it was really thinking about, you know, not just limiting ourselves to what we've been doing, but, you know, what are the other things that we can do and combine it with other parts of our business that we can combine to make compelling programs for our advertising partners?

Carson Clement
Very cool. What would you say that the future looks like for media companies just kind of in general? I know that's a really broad question, but when you just think about the one thing you touched on was, you know, these continued roll ups and consolidation in the media industry.

Are there any other trends just in general that you see over the next five, ten years happening?

Sam Stahl
Yeah, I mean, I think that you're going to really see you're going to really see publishers who have built, you know, strong brands and who have strong offerings with you, with with multiple sort of platforms. Those are the ones that are going to do well. You know, you have to have a loyal audience. It doesn't have to be BuzzFeed's size. No, not necessarily. But they have to be loyal, you know? You know, you have to have good technology. You know, you have to have meaning that, you know, you have to offer that audience interesting things to increase engagement.

And, you know, whether that's interactive units, whether that's, you know, different types of compelling content. It can't just be the same type of content that every other publisher is doing, you know, and you get it. Most importantly, you need to make money in lots of different ways if you're just relying on advertising or if you're just relying on affiliate. I would feel very bearish about that. But I think that the publishers that that that that are really thinking about how to leverage their brand into as many revenue streams as possible and really leverage all the different things you do against, you know, against one another, you know, use your commerce elements to, to, to bring to brand advertisers to, to increase your advertising revenue. I think those are the ones that are going to that are going to survive and flourish.

Carson Clement
And it's so interesting because I think before our conversation, you and I don't think I would have associated. You know, when you think of the importance of brand, you think more of like companies selling physical products or just companies selling products in general, not a media company. But I think when you talk about the success of Food52, it just makes so much sense. Like starting, I'm sure Food52 started in a fairly niche category with a niche audience and just built so much trust and started to grow and expand from there.

So essentially, you know, having brand and trust be that most important, an initial calculation. I think that's true. As as media becomes more and more commoditized brand will be the only thing that people have to 100%.

Sam Stahl
You know, there's just there's just too many options out there for for consumers, meaning website consumers. There's too many options out there for advertisers. And, you know, the publishers that really, truly have a connection with their audience, I think will be able to show that to an advertiser and thus make a good connection with them, resulting in revenue. But the brand, I think, is 100% the most important thing.

Carson Clement
I think to I'm not sure how familiar with this is getting more into the TV and space, but I think the launch of Magnolia Network. Is a good example of someone that's doing it really right because they have such chip and Joanna Gaines, such a strong brand, and they have so many.

I actually live in Waco, so I've seen it firsthand that there are so many different ways of monetizing, whether it's through, you know, physical products and commerce or they have a growing real estate business that I'm sure that plans to expand beyond Texas. They have with so much is built into that magnolia brand and trust and that now that they're kind of getting into the media landscape with Magnolia Network, I just think.

Sam Stahl
Yeah, you know, they're going to really dominate. Yeah, you know, you're exactly right. You know, they they did it exactly right. And, you know, they will make hundreds of millions of dollars, if not more, out of out of their empire.

But even if you look sort of on a smaller scale, you know, you look at like like food influencers on on on YouTube or on Tik or on Instagram. You're having all of these niche sort of food personalities pop up and literally pop up in my feed.

And, you know, they're such interesting people and they're, you know, they're building these mini brands for themselves. And yes, they're making money with brand partnerships, advertisers, but they're also now selling things. So, you know, there's a there's a Cajun guy who who makes these huge shrimp boils and videos around that. And now he's selling his own seasoning and selling a lot of them. And so these are sort of these little mini brands that are building that connection with, with, with, with, with viewers. And then guess what? Selling the things because they trust them.

Carson Clement
And so interesting and I think on an influencer scale, but even bigger than that is Mr. Beast who yeah. He's obviously building a media empire around him with and he's a perfect example of using that media empire to drive revenue in a variety of ways, whether it's Mr. Beast Burger. I also saw that he just launched a candy bar. Yeah, it's really, really interesting. Things are changing very quickly.

Sam Stahl
And yeah, you're you're able to you're able to take, you know, take that branded and license it out. And, you know, that's a whole another revenue stream is sort of licensing out the intellectual property that you've created. And you know that that unlike advertising revenue tends not to fluctuate quite as much.

Carson Clement
So interesting. Well, last question I wanted to ask you. As Sam was just looking ahead for media companies, big or small, what do you think is kind of the best strategy for them to differentiate themselves and survive and thrive in the years to come?

Sam Stahl
Yeah, I mean, if I was starting a media business right now, I would I would I would I would go niche, I would figure out something, something very focused, and I would organically and gradually build up that audience and sort of the loyalty and trust with that audience. And I would explore every, you know, every potential way to make money with that brand, whether it's brand partnerships, whether it's whether it's licensing, whether it's commerce. What you know, my advice would be start, start small focus on a specific need and, you know, provide something really valuable to your audience. And they will trust you and they will come back and they will give you their money.

Carson Clement
Awesome. Well, I think that's super good advice. And anyways, thank you for taking the time to chat and we appreciate it. Hopefully. I mean, I'm sure.

Sam Stahl
Yeah. Thank you so much for having me through. Thank you for having me.

Carson Clement
Okay. Thanks, Sam.