Back in 2009, Joe Pulizzi was one week away from giving up his entrepreneurial dreams and going back to a job. It was a dark time, both personally and in the broader economic environment following the financial crisis in the United States.
Joe had fallen in love with a product idea for the then nascent content marketing industry, and built an audience to sell that product to. Unfortunately, the market did not share Joe's enthusiasm.
While contemplating going back to the world of the employed, Pulizzi realized that he had the answer to his problem. His audience had been telling him what they wanted all along, but he was too preoccupied with the original product idea to notice.
This lead to the founding of Content Marketing Institute, the Chief Content Officer print magazine, and Content Marketing World conference the next year. In the summer of 2016, the entire enterprise was acquired by UBM for $17.6 million.
Quite the turnaround, right? That may well be the best lesson about building an audience first and listening to what they tell you they need and want.
More importantly, CMI made money in multiple ways after finding the right initial monetization path. In today's episode, Joe shares the eight ways that startups can generate revenue from an online audience, and how to eventually implement all of them concurrently to grow your business.
Note: Due to a technical issue, my end of the interview has a wonky echo. I'm running it as is because Joe's answers are the important thing. Apologies for the sound quality!
The Show Notes
- 10 Ways to Make Money From Content Marketing
- Content Marketing World
- Rate Unemployable at Apple Podcasts
8 Ways Startups Can Make Money with an Online Audience, with Joe Pulizzi
Joe Pulizzi: My name is Joe Pulizzi. I'm an entrepreneur, father and lover of all things orange, and I am most definitely unemployable.
Voiceover: Welcome to Unemployable, the show for people who can get a job, they’re just not inclined to take one — and that’s putting it gently. In addition to this podcast, thousands of freelancers and entrepreneurs get actionable advice and other valuable resources from the weekly Unemployable email newsletter. Join us by registering for our Free Profit Pillars Course, or choose to sign up for the newsletter only at no charge. Simply head over to Unemployable.com, and take your business and lifestyle to the next level. That’s Unemployable.com.
Brian Clark: Back in 2009, Joe Pulizzi was one week away from giving up his entrepreneurial dreams and going back to a job. It was a dark time, both personally and in the broader economic environment following the financial crisis in the United States.
Joe had fallen in love with a product idea for the then nascent content marketing industry, and built an audience to sell that product to. Unfortunately, the market did not share Joe’s enthusiasm.
While contemplating going back to the world of the employed, Joe realized that he had the answer to his problem. His audience had been telling him what they wanted all along, but he was too preoccupied with the original product idea to notice.
This led to the founding of Content Marketing Institute, the Chief Content Officer print magazine, and Content Marketing World conference the next year. In the summer of 2016, the entire enterprise was acquired by UBM for $17.6 million.
Quite the turnaround, huh? That may well be the best lesson about building an audience first and listening to what they tell you they need and want.
More importantly, CMI made money in multiple ways after finding the right initial monetization path. In today’s episode, Joe shares the eight ways that startups can generate revenue from an online audience and how to eventually implement all of them concurrently to grow your business.
Unemployable is brought to you by StudioPress Sites. StudioPress Sites gives you a complete hosted solution that makes WordPress fast, secure, and easy … without sacrificing power or flexibility. Explore all the amazing things you can do with a StudioPress Site, and you’ll understand why this is way more than traditional WordPress hosting. Check it all out today at Studiopress.com.
Joe, how's it going over there in Cleveland? Have the tears seized flowing yet?
Joe Pulizzi: I’ve got to tell you, I'm still a little bit disappointed that the Cavs didn't pull it out.
Brian Clark: Come on, be realistic. You didn't think it was going to happen again with this Warriors team with Durant.
Joe Pulizzi: I didn't think that the Warriors were that good. Actually, I want to throw this out, I didn't think Kevin Durant was that good. He hit almost every shot with a hand on his face and singlehandedly controlled that last game that they won in my opinion.
Brian Clark: Yeah, that shot over LeBron in game three was just amazing to me. This is LeBron James. It was amazing. But yeah, I think Durant had something to prove. He got a lot of heat all year for going to the Warriors, leaving the Thunders.
Joe Pulizzi: Yeah, you’ve got to give him credit. I mean, he did it. He said he was going there to win and he did. Granted, the Cavs did have the championship to break the 52-year streak for Cleveland not winning.
Brian Clark: I was happy to see that, honestly. I mean, I was born in Oakland, but that's about as far as it goes. Last year I couldn't believe they came back from three-one, number one. But when they did, I was like, “Yeah, that's a good thing.”
Joe Pulizzi: Hey, we believe everything in Cleveland. I actually thought they were coming back from 3-0. I’m like, “LeBron, he just wanted a new challenge.”
Brian Clark: You guys are long-suffering optimists.
Joe Pulizzi: Exactly. I'll tell you what, now this is two finals in a row with the Cavs and the Indians that we've lost. It's just nice to be competitive. That’s how we are in Cleveland. “Oh, it's just nice to be there. We can go another 50 years without winning a championship. We'll probably be okay.” But I'd rather not.
How to Develop an Audience by Using Content
Brian Clark: All right. Let's shift gears here a bit to content, but more specifically audience. I've been thinking a lot lately, I know you use the terminology complimentary or interchangeably sometimes, but it's really audience that we're trying to develop here. If you could develop an audience without content somehow, either your own or someone else's through curation, I suppose we would do that. But that doesn't really happen, does it?
Joe Pulizzi: Well, we'd be doing whatever it takes to build a loyal audience. I mean, you say it all the time. How do you develop an audience that knows, likes and trusts you or will have the opportunity to know, like, and trust you? If that happens, then they're more likely to buy your products and services.
I haven't found a better way to do it than to create valuable, consistent, relevant content to a targeted audience on a consistent basis. You and I have been talking about it for 20 years now, which is kind of sad, but we keep talking about this like it's something new. It's not. This is a media model. It's well over a hundred years old, the platforms have changed. But other than that, it's pretty much the same thing.
Actually somebody just asked me, “Joe, isn't this harder than ever before, because there's so much content competition?” And I said, “No, it's easier. It's like we can actually reach an audience.” And I don't have to spend $500,000 for a content management system today.
I can actually go and create a platform and reach an audience directly. We’ve obviously got to be smart about it and it does take time. It takes patience, but you can actually do it, and you don't have to have $5 million to get it done.
I think this is the golden age for building an audience. As you know, you were an integral part of my last book Content Inc. Where first, you build that audience, and then you can develop whatever products and services you want once you build that loyal audience. I mean, that's how you built Copyblogger and Rainmaker and hundreds of other people that we talk about in the book. That's the best way to be an entrepreneur today.
Your products and services are going to change. Look at any successful innovative company out there. What do they do? Their products and services always change, but their audiences basically stay the same.
Instead of falling in love with your product and service, fall in love with your audience and then they'll tell you what they want to buy.
Why Content Marketing Is Still Considered “New”
Brian Clark: That's exactly what I want to talk about today, specifically your last book and then the upcoming book that's coming out this September with Robert Rose.
You did touch on something here that I've been thinking about, which is 20 years I've been doing this stuff and 11 years, I have been teaching it. It’s 2017, I'm like, “Doesn't everyone get it by now?” Then I saw that Mary Meeker for the first time mentioned content marketing in her internet report – 2017. And I'm like, “This is the longest marathon ever for that to finally happen.” It seems like it should have happened 10 years ago.
Joe Pulizzi: Yeah, there were 355 slides of that presentation and we had one. Do that as a percentage of Mindshare, if you will. So, now we went from zero to what? A 10th of a percent?
Brian Clark: Progress.
Joe Pulizzi: We're just getting a seat at the table. It still amazes me. At Content Marketing Institute I think we've worked with 30 of the Fortune 100 over the past decade. For the most part, they still look at interruption. They are still focused on advertising and campaigns.
Even with Killing Marketing, my next book coming out in September, I had to have a sit down. We were in the middle of the book and I said, “Robert, this seems too obvious. Are we missing something? Nobody else has really focused on this that we're working with this.”
He's like, “No. I go into every one of these companies and they're still not focusing on it as a long-term approach to build an audience, to build an asset, to look at it like their own business model. So, that's why you and I are going to have to keep teaching this for 20 years.”
I think you and I both said, “Well, someday, it's just going to be marketing.” I thought that would happen by now.
Brian Clark: Everyone keeps saying that, every year. It was like when they used to say, “Mobile’s the next big thing.” It took 17 years for that to come and then it did.
The interesting thing is you're amazed at how many people don't get this, who are about 10 years behind where you and I would think our audiences would be in sophistication, and yet we're seeing that that's not the case.
But you cannot argue validation. I think Content Inc. itself, beyond just the case study of us, you had… I don't remember how many companies that were startups. They started with a blog or an email newsletter and they built an audience. Then next thing you know, you've got a seven-figure, eight-figure company.
That still amazes the more traditional business people, the more traditional marketers that I meet out there. They almost don't want to believe it or maybe, “That would work for you, but it won't work for us.” That doesn't make any sense to me.
Joe Pulizzi: So, you picked the greatest business model of all time. I picked the greatest business model of all time. The reason why more entrepreneurs don't use it is… what's his name? Peter Thiel. I’ve got nothing against Peter Thiel, but he wrote a best-selling whatever book to entrepreneurs. I forgot the name of it From One to… whatever. It doesn't matter. Go look it up if you want to see it.
He talks about in that book how we just have to have this unbelievable product that nobody else offers. And that's how you're going to make it, like a Facebook, right? This unbelievable earth shattering thing and you’ll…
Brian Clark: That doesn’t even exist.
Joe Pulizzi: That's what I'm saying.
Brian Clark: Look at what Facebook does to Snapchat every time they innovate. They just copy it. Everyone can copy everything. There's got to be a differentiator.
Joe Pulizzi: This is the problem. Entrepreneurs look at people like Peter Thiel, and they say, “Oh my God, this is what we've got to do. We've got to come up with the greatest product.” And that's the trap. Because if you go in and you say, “I'm going to create the greatest product of all time,” what are you not doing? You're not focused on your audience.
And you know what? As soon as you're done creating whatever product you think is amazing, your audience's pain points have already changed. So, you're going to have to then pivot and change it to something else.
That's where you and I, and all the case studies we talk about in the book, they're just like, “Just build the audience.” Because we know the data is there, that almost every company pivots their products and services over time. That's what companies do. It's a natural progression.
Well, what stays the same? The audience.
So, focus on the audience. Then you can change, and you can be more adaptive with your product and service offering and continue to grow and not be obsolete like almost every one of those entrepreneurs that create the next best Facebook or the next best app. They go out of business, because they're focused on the wrong thing.
And that's why you and I still have to go out there and teach, because you've got other people out there teaching what I think is incorrect philosophy over how to build a business.
8 Ways to Monetize Your Business
Brian Clark: Yeah. All right, let's get some specifics here, because you've been talking about the cornucopia, if you will, of ways you can make money starting with an audience.
This is important, because when I started Copyblogger, I didn't have a product or a service. I wasn't even sure that I had a business model other than build the audience. I remember on a couple of occasions, people going, “What are you doing with this?” And I just said, “I'm going to find out what these people want to buy and I'm going to sell it to them.” I didn't know if that would be product development, affiliate, both, whatever the case may be.
Now, in the forward I wrote for Content Inc. for you, I kind of hinted at the… I started this email newsletter for myself. It's kind of like personal growth therapy, yet we're up there and I don't promote it. I just write it to 10,000 people, that's an audience. Ostensibly, I could do something with it now.
I actually have a long time dream that I'm thinking of doing with Further. Something I've wanted to do for a long time. I'm not going to say it now, it's too early. But it makes me a little nervous. You know when you want to do something for a long time and you know you're positioning yourself to do it and yet you think, “Because I really want this, I may fail.” You get that kind of butterfly and stone feeling. You probably don't, you’re nervous as steel over there.
Joe Pulizzi: Well, no, absolutely, because I just was on a podcast talking about this. Sometimes you mistake your passion for something that you can monetize. Now if this is your passion and you want to do it, you could say like, “I don't care if I make money, because it's my passion.” Or you could say, “I don’t want to be an entrepreneur. This is my passion. I'm going to go forward.”
Now passion is really important, but you've got to understand sometimes you can't monetize passion.
Brian Clark: This is also a very pragmatic product development strategy. It’s just like, “I want to do it. It would be meaningful to me beyond the money.” So, you get a little antsy about that. But I don't worry about it, because there are seven other ways I can make money if that one doesn’t work.
Joe Pulizzi: That's exactly the point. That's the impetus for Killing Marketing, the next book. I mean, just the little overview is what we see happening… Okay, I'll start with this, an easy example.
Look at The New York Times. You look at that business model and you think, “Okay, that's a very specific business model for a media company.” And then you look at somebody like General Electric and you say, “Oh well, they use content or a content first approach. They're doing something different than The New York Times are doing.”
What's happening in the marketplace, and then we can get to entrepreneurs in a second, but what's happening is when you look at content creation and distribution, the models are the same. For The New York Times and General Electric, they're no different. We perceive them as different, just because we think The New York Times is different from GE, but it's not when it comes to a business model standpoint and content.
I'll give you an example. Let's say for you, you're focusing on your 10,000. You have what you would call, because you coined this, your minimum viable audience. Did you coin that? I know I got it from you.
Brian Clark: Yeah, I did.
Joe Pulizzi: Minimum viable audience, which I give you credit for all the time, where let's say 10,000 is your minimum viable audience that you believe that you can monetize. Depending on how you look at it, you've got from 7 to 10 different ways to monetize that. Let's look at first the five direct ways just like a media company would.
The first thing is, “I have a loyal audience. How can I extract value from that audience?” One is advertising and sponsorship just like every media company on the planet.
Second, conferences and events like you do through your Authority conference, I do through Content Marketing World and our other conferences.
Premium content. Let's look at Darren Rowse’s Digital Photography School. He monetizes that site through selling premium ebooks from like 10 bucks to 20 bucks, whatever. That's how he made multiple millions of dollars through that.
Donations. You could just say, “Look, I don't want to extract any direct revenue, I just want somebody to give me grants and donations.” And that's of course how Charity: Water goes to market with that organization. Or you could do a Kickstarter or a GoFundMe or whatever the case is.
Then you've got just your basic old subscription model. You could say, “Hey, pay me a monthly fee and I'll give you access to great content.” I think Copyblogger is doing some training and certification program right now. That would be an example of a subscription program. We have a CMI online training, same thing.
There are five direct ways. Doesn't matter if you're a media company or a non-media company, you could monetize your audience in those ways. And that's what we're seeing is a lot of traditionally product and service brands are starting to say, “Well shoot, I can generate more products and service sales, but at the same time, I can monetize it five other ways.”
Then take it the next step and then we can talk about it a little bit. Then you could say, “Oh, okay, well, I can build this audience and just sell direct products,” like you do through Rainmaker. Or you could say, “I'm going to sell services.”
Like my friend Matthew Patrick who's MatPat on YouTube. He's got 8 million YouTube subscribers. His biggest business is a consulting service that he created and he does YouTube consulting for some of the largest companies on the planet. He created a consulting business from that, so that's a services business.
There are seven right off the bat that you could say once you build an audience, don't be… I don't want to say obtuse, because it seems negative. But don't be limited to what you think you can drive from a revenue standpoint, because most people just haven't done it that way. That's what I think if they look at your model and you leverage four or five of these, seven that we just talked about, maybe all of them. We leverage all seven of those in one way or the other.
How Does the Conference Model Work?
Brian Clark: Yeah, the only thing I’ve really stayed away from has been advertising and sponsorships, just because I think it's harder to do when you are more product-based. Every WordPress hosting company on the planet would be a great advertiser, except there are competitors. And then you look at email providers, that's a competitor. That's our problem.
I think you guys have done it magnificently, because you have the conference model, which if I understand the economics of that, selling tickets isn't necessarily the profit center or tell me how you look at that.
Joe Pulizzi: I’ll tell you the model. Sure, absolutely.
60% of our entire business comes from our conference and event lines. They are also the most profitable thing we do. You could make a case that even though we generate revenue and profit from all the other 14 different ways that we generate revenue, I could tell you that the 90% of the profit in the organization comes from our conferences and events.
An event like Content Marketing World, we'll see about 4,000 attendees from 70 plus countries. 70% of the revenue comes from direct ticket sales. You're paying anywhere from $995 to $2495, depending on what package you buy, workshops and whatever the case is.
Then the other 30% comes from sponsorship of that. So, there's platinum sponsor, gold sponsor, sponsoring lunch and learns, those types of things. That's a conference plus model. It's a well-known model that works really, really well.
Now there are other models out there that do big exhibition areas, where that's all they do, which is big in Europe, where it's like, “Oh, I'm going to spend a hundred bucks as a marketer and go to an event.” But 90% of that revenue comes from sponsorship. That's another model. We're not as big into that, because we focus more on education.
So, that's the model that works for us. Of course, I'm thinking for you and your 10,000 audience that you're thinking about, it’s like, “Wow, how could we start off with a niche event that's covering an area that you can monetize right away?” because that's where you can really scale fast and profit quickly in the model if there's an opportunity, if there's a content gap there.
Brian Clark: It's interesting, because I told you about a product idea I have, but I'm almost marrying it with some sort of event mechanism, because it's not something you see merchandise companies doing, to give a little bit of a hint. That's exciting to me. Every time you see something that, like you point out, that maybe a media company does that GE isn't it. And you're like, “Why not?” I think that's the question. Why not? Why can't that work?
Joe Pulizzi: What we found in talking with CMOs is… like we talk about them buying media companies all the time. I'll talk to the chief marketing officer of a large international goods and services company, whatever the case is, and I'll mention, “Hey, you could buy this media company, because they have this audience and access to this audience instead of always having to rent there.” And they look at me like I've got two heads. They're like, “What? We've never thought of that.” I'm like, “Yeah. Why spend two years building it?”
Brian Clark: It seems so obvious, because the money involved would be great for the content platform, but for the big fish, they're like, “We spend this on random crap every year.”
Joe Pulizzi: Do you know the Arrow Electronics case study? Have I talked to you about that?
Brian Clark: I don’t think I’ve seen that one.
Joe Pulizzi: Okay, real quick, favorite case study on the planet. Arrow Electronics, Fortune 119 company, $24 billion company. They're like the Amazon.com for electronic space in B2B. They purchased over the last two years 51 media properties in the electronics engineering space. So now they are the largest leading educational company in the electronic space.
And they also get judged just like a media company does. So they're driving revenue and profit directly from that as well as all the advantages that it gives to the data, the insight selling more of their own products and services.
Why more companies aren't doing that? I have no idea. Here, again, if you look at our educational system, you look at the way people have been brought up in marketing, they just aren't built to think, “Oh, what if I build an audience and I create this publishing platform, and then how can I drive revenue from it?” They’re just not even thinking about it at this point.
That's all I'm worried about is getting that out there so people just don't think that, “Oh, I'm building a loyal audience and I'm going to do this content marketing thing to build products.” I'm thinking about it like, “Hey, this could be your entire business model for your organization, entrepreneurial or a large company. It doesn't matter.”
The Importance of Audience First
Brian Clark: Yep. All right, let's drill down a little bit on some of these, because the audience first thing leads to some very interesting scenarios. For example, given my experience as an entrepreneur over the last 20 years, there is no way you could get me to develop a product without the relevant audience for it first. I mean, that's just like…
Joe Pulizzi: It’s built into your DNA.
Brian Clark: It's just so risky, and we're supposed to have tolerance for risk. Sure. It's risky enough without spending six months building something no one wants. Why would anyone do that? Because you think it's cool to build that kind of classic… Of course, you go back and you’ve said Peter Thiel or whatever, but it's really the entire media around the entrepreneurial space.
They're always focusing on something like Twitter, which was a lark product by rich white dudes who’d already succeeded. They got lucky. Twitter's never made a profit and that I think is the proof that it was a lark, but that doesn't matter, because they went public and everyone got rich.
Joe Pulizzi: There are always going to be the one percenters, right? There's going to be the Facebook and the Twitter and you're like, “Oh my God, I can't believe it.” But then, for every one of those, there's Copyblogger, Rainmaker, there's Moz, there's Hubspot. Those companies basically built an audience first.
Hubspot's a really good example as well, because you and I both know that that product was extremely substandard. You can say whatever you want, I’m going about it. But I think one of the reasons why they were able to be successful is because they built an audience fairly quickly, fairly aggressively, and then were able to maybe grow their product into that when it worked to that audience. I don't know if you want to comment on any of that.
Brian Clark: No, other than Hubspot’s never turned a profit, they were a hybrid. They had one foot in that Silicon Valley cash out or IPO mentality, and the other half was in our world. And I think you're right, having one foot in our world has been an enduring benefit to Hubspot. They built an amazing community. Whatever we want to say about their solutions doesn't matter. They're great teachers, great community, great event that they put on. I admire them for that. Maybe some other things, not my cup of tea, but you can't argue with that part.
Joe Pulizzi: You can’t fault that, absolutely. And look at a company like Salesforce.
This is what's interesting. If you said, “Okay, what's the second most valuable event if you were going to package it up and sell it in the technology space?” I think one is probably consumer electronic show. Number two, I could actually make a case for Dreamforce. If they actually wanted to package up and sell it, how much would they sell that for? $100 million plus, more than that? 500 million? Think about that, 150,000 people, all the sponsors they get. Just to get into the door with any kind of visibility of that event, you’ve got to put down seven figures.
So just think about that for a little bit. They're not even a media company, but these are the things that are happening that we just haven't really noticed. Whether you go into the news stand and you see Red Bull’s in a magazine that has 2.5 million subscribers that are paying money to get that magazine from Red Bull. All we think about are the cans, but we don't think about the media that's coming on or the Arrow Electronics example. We’re in the midst of that.
When you say, “Talk starting a company, why take the risk?” I think that's the point that you and I need to make more is if you're going to go out there and you're going to build a company, why are you even thinking about putting time and attention into a product that probably isn't going to make it to market anyways, because the audience's needs are going to change? Build the audience.
How many products and services have you launched against your audience and you've never really had a failure? Depending on how you look at it, pretty much all of them have been successful, because all you do is you build that audience, you listen to that audience, and then they buy what you put out there. Done.
Audience as a Product Development Strategy
Brian Clark: Yeah, they've all been successful. We got so spoiled at the level of success that we regarded some as lesser than others. That's kind of insane when you think about it, because they all put a lot of money into our pockets.
Let me talk a little bit about audience as a product development strategy, because you mentioned Darren Rowse, Digital Photography School. He and I, we've been friends forever. We had a chat about this specifically, which was building your audience with content and then making relevant affiliate offers to see what they wanted to buy.
Darren did that and found out that even though they gave away all these great tutorials, they would buy ebooks on various topics of photography. And these were other people's ebooks that they sold with commissions. They tried courses, etc.
Then they developed their own branded line of those ebooks that you talked about. Then Darren moved into a little bit more sophisticated courses. It's just so much more of a reassuring approach to say, “This is what they'll really buy, which is what I need to then develop.”
Yet I don't know too many companies that have followed that strategy. I did some of that in the first year of Copyblogger, which did inform what our first product was. Talk about market research. “What will they actually buy?” is the strongest thing in the world.
Joe Pulizzi: The first example, because, of course, I spend a lot of my time in the large company realm. The first time I heard of that happening was Kraft Food & Family. Kraft has their own Food & Family enterprise — they have a magazine, they have Kraftrecipes.com.
As we got to know that model, what we found out is that they used specifically Kraftrecipes.com to see what the most popular recipes were regarding that content, and depending on what the interaction was, that's what they launched with new products for Kraft in the next year. I mean, it seems so easy. It’s like, “Of course.”
Brian Clark: It’s so obvious and yet I’m so shocked that Kraft did that.
Joe Pulizzi: That’s how you get things like red velvet Oreos, because those things just take off as a recipe like, “Oh well, we could just then create that.” And that's what they do, and then you've got another billion dollar line.
So, just take that on the small company standpoint. What Darren did was just beautiful and it's not that hard to do once you figure out what that… I think 5 to 10,000 for B2B is a really good number of email subscribers to start with, so that you have enough of an audience where you say, “Look, this isn't a rounding area or something like that. I don't have too few of an audience. That's a good amount.” And that's why it takes you 9 to 12 months to get to that level where you have 5 to 10,000 loyal followers and then you can start to test some of these things and then you start to launch.
Brian Clark: Yep, that's absolutely correct. Again, Further for me is a side project. It probably will remain that way for the foreseeable future given what we're up to in the day job. But just the act of doing it allowed me to refine what it was and that all came from how people reacted to it.
Then that also informed ideas about which of these seven or eight ways to make money is the right way. The fact that I can objectively, empirically evaluate that from audience feedback and see if it matches up with my passion project, now that's pretty cool.
Joe Pulizzi: It's amazing.
What you talked about, I mean, you were a lot smarter than I was when I started, because in 2007 when I started the blog, I started to think about building an audience, I fell in love with — we had that initial product, we called it the “eHarmony for content marketing” at the time. I fell in love with it, because I thought it was the greatest thing ever.
Even though I'm doing the blog and sort of accidentally building an audience, I fell in love with this product and service until we were just losing all our money. It was a terrible financial model, and that's why we got into such… I mean, I was looking for a job. Brian, you know this. We were at a point where I'm like, “I'm not going to make it. I’ve got to get a job. My entrepreneurial dream is over.”
It was a very depressing time for me, I'm trying to figure this thing out. Then finally, it was September of 2009 when I realized, “I'm focused all on building this product and what am I not doing? I'm not getting feedback from my audience.”
And then I started to really take all the feedback that I was just sort of glancing at and I wasn't taking seriously. I realized, “Oh my God, here's what they're asking for. They're asking for consulting, they're asking for training, they're asking for online education, they're asking for, ‘Can we get events together?’ They're telling me the business model.” I was ignoring that, because I fell in love with the product that I launched that almost killed us.
Everybody listening to this, learn from my mistake. I was within a week of just going back and getting another job and not continuing on that. And then we did the pivot, launched Content Marketing Institute, the event, everything else, because we knew it was going to work, we had a good feeling it was going to work because everybody asked for that.
I still think about it, Brian. I'm like, “I can't believe I almost blew it, because I wasn’t listening to the audience.”
Brian Clark: I didn’t know you came that close. What was the name of the original blog?
Joe Pulizzi: It was Junta42.
Brian Clark: Yeah, I never understood the name.
Joe Pulizzi: Yeah, we don't even have time to get into it. I thought it was awesome.
Brian Clark: This is good. This is good for people to hear, because for those of you out there who don't know, Joe has done very well with his pivots, with an acquisition by a larger conference company. I mean, it all worked out brilliantly and everyone sees that, but they don't see this guy was one week from going to get a job when he realized that the audience was his salvation.
Joe Pulizzi: That was it. I remember really well, because basically what happened was that we lost one of our biggest customers in the current product that we were running. And it had a great case study behind it. So, here's my best case study, one of my best customers that left, and I can't do any better than this. And I'm like, “Oh my God, this is not working. What's going on?”
Then it took me about two weeks to really sit back and I was already like, “Okay, well, should I go back to my old company or an executive job or can I even get one now?” Because it was 2009 and the market was still, didn't turn around yet. I was like, “Okay, what are we going to do?”
I started to go through that and I remember I wrote this on a cocktail napkin. I wish I had the cocktail napkin and I was drinking at the time, because I needed a lot of drinks to get through this. I wrote down, “Okay, what is the audience asking for?” I said, “What could we build out of this, because we do have an audience lift even though the product's not working?” And I said, “Okay, what if we created the go-to educational platform for content marketing? What if we created the leading event, in-person event for content marketing? What if we created the leading print magazine for content marketing?”
That was September of 2009. Then on May 21st, 2010, we launched Contentmarketinginstitute.com. In January, 2011, we launched Chief Content Officer Magazine. And in September of 2011, we launched Content Marketing World, and all those three things came through. About two years later, largest online platform for just content marketing for enterprise marketers, and then the event and then the magazine and still that way today.
Brian Clark: See, to me, it almost looks like that's your plan all along. Again, it's a great story and it really does show you though. Because you hear the word “pivot” and too often, that means exactly how you used it. Which is, “I started off with this thing I was in love with, without any clue whether it was the right thing for people. And then I either die or change.”
Joe Pulizzi: The reason why I talk to entrepreneurs and try to have them learn from me on this one thing is the data was right in front of me. The audience was telling me, because I went back there and got all the emails and all the social media data about what they were asking for, and the products and services right there. I was just ignoring them, because I was focused on this product that less than 1% of our audience actually wanted to buy at any one time. I'm like, “Oh God.” Yeah, I know. It was a, “Thank God I learned.”
Brian Clark: Yes. I just think people need to hear that, because if you start off with the mindset that I have, the last couple things is just watch, pay attention closely. Don't make up your mind about what the monetization answer is. You may be right with your initial hunches. You may be wrong, but the answer's there.
Joe Pulizzi: Yeah. And the odds are you're most likely wrong, which is fine too.
Brian Clark: Which is fine.
Joe Pulizzi: You can go in with your hunches. You don’t have to…
Brian Clark: All day long as long as I end up…
Joe Pulizzi: You can go in thinking that you still have a great product or service, but the most important thing is build that relationship with that audience and focus on a mission that nobody else is delivering like you can deliver. If you do that, then yeah, your product might work and it might not. But you know what, it doesn't matter, because there are six other ways to monetize it.
How Does the Donation Model Work?
Brian Clark: Let's talk about another one of these ways that I've also never touched on, and that's donations. It always seemed just kind of… it just wasn't my style. But you have to look at… you use nonprofits, NPR, stuff like that, who've always done the membership model where you're affectively donating, you’re pledging to support this content and this messaging that you believe in and you consume and whatnot.
For example, there is an internet only “radio station” out of San Francisco called SomaFM. They have a whole bunch of different channels, one of which is called Groove Salad. It's just ambient music. I put it on in the background when I'm working. And then at some point, I made it over to their website. They had stickers and shirts and whatnot, but it's all tied to supporting this effectively. This is it. They don't have advertising and that's their whole thing. They're like a mini-NPR station that plays groovy music.
Of course, now that I bought something, I get emails every year. So, the next year, I bought a sweatshirt. Now, of course, the prices are inflated, but you understand that you're actually supporting the endeavor.
Give me your thoughts on that model and do you see more of that or less?
Joe Pulizzi: Actually, I see more of it and I'll give you an example of something that just happened. Are you familiar with Philip DeFranco, the YouTuber?
Brian Clark: Yes.
Joe Pulizzi: Okay. So, Phillip DeFranco, he's been part of this whole YouTube Adpocalypse issue, where YouTube is trying to only support ad-friendly YouTubers. Philip DeFranco, because he covers the news in certain ways, he made it on that list of not ad-friendly. And it's really, he said, taking a hit from an advertising standpoint. He's got other monetization opportunities, but it's a big deal to him. He's got 5.4 million subscribers, so it's a big deal.
What he decided to do, because YouTube, which as you know, when you build on rented land, it's their land, not yours. It's YouTube subscribers, not Philip’s, so YouTube can do whatever they want. He's in a bind, what does he do? And he just did this.
He just built a station on Patreon or a content feed, a platform. You could go to Patreon and you could say, “Hey, would you support me? If you like what I'm doing, would you support me in whatever amount you can pay?” Within a very short period of time, he had 16,000 people that are paying him money directly, which I would consider part of this donation strategy, because they want to hear what he has to say.
Easy, right? Done. The idea is if you build a loyal audience on whatever the platform is, I mean, hopefully you can do it on a blog or a website like you did at Copyblogger and I did for Content Marketing Institute, or whether it's iTunes platform or YouTube or whatever. But then you could say, “All right, how am I going to monetize that?” Then you can think about that donation route, the GoFundMe, the Kickstarter, the Patreon.
You don't have to be a nonprofit to do it anymore, because, this is a great part, you could just be honest. You could just say, “Hey, I need to support this. I need to support my family. I need to support this model, and if you like this content, would you please support it with X amount of money or put in the number?”
More and more of these are popping up like in Philip DeFranco's case. I think you're going to see more of it specifically on things like YouTube as you have more people saying, “Oh my gosh, my entire audience is controlled by YouTube, what am I going to do?” You start to look at other opportunities where you can build direct email subscriptions, direct subscriptions and direct connections.
Brian Clark: Yeah, the YouTube phenomenon is amazing to me.
I think they rely on those ads, because number one, there's a lot of money being made or was before things started to change. And those people that are successful on YouTube, they're just not talking in front of a webcam. They work on producing those shows. I think they've got that production mindset, and then revenue takes care of itself.
But that's the problem with ceding control to someone else's platform. We've been complaining about this for 10 years and it's never going to go away. You just wonder how many times do high profile people have to get screwed over before people go, “This isn't a good idea. I need my own home base.”
Joe Pulizzi: That's the thing. If you build, like you did, on your own platform, you have to do a lot of things to get people through that to build your audience. That's a pure way to do it. That's the way that we did it.
But if you do it on something like YouTube where the audience is technically already there and you just have to corral them, you give up a lot of control in that process. Basically, you give up all your control and you give up your subscriber context, because YouTube can do whatever they want with the algorithm and whatnot.
That's why if you're like Smash, who a couple of years ago realized that they were building this huge thing on YouTube and then, “What do I do, because then we don't have any control?” They started — all their calls to action were to their email subscription. Then they started to build up tens and hundreds of thousands of email subscribers from that, and now, they’ve built a business model.
The same thing for BuzzFeed. Why is BuzzFeed going to make it when two years ago I didn't think they were going to make it? Because now they've got millions and millions of email subscribers, direct connections with their audience, and they're not relying on Facebook for their audience traffic anymore.
Brian Clark: Yeah. You've had that same story with the big podcasters. I know Pat Flynn was kicking himself for not starting an email list earlier. Even if you were a little on the fence about email and then you went all in.
Joe Pulizzi: Somebody asked me my biggest regret the other day, like what I didn't start, and I said, “I wish I would've started an email newsletter sooner.” I probably missed out on about 18 months of subscribers, because I was just focusing on getting people to my site and traffic. And I'm like, “What an idiot. I can't believe…”
Brian Clark: Well, it's propaganda. You hear, “Email’s dead, email’s dead.” And people buy into that, because generally the people who say that are some prominent social media person or something. You know what's dead? Organic social media.
Joe Pulizzi: Organic social media, there you go.
Brian Clark: Email’s going strong.
Joe Pulizzi: Organic social media has really become customer service in a lot of cases. You can still use it for customer service in that expectation, but don't expect to build an audience on any of those platforms at all that's going to make a difference in your business.
What Is Killing Marketing About?
Brian Clark: The new book is called Killing Marketing. At first I was worried that your co-author was Bill O'Reilly. So, I’m glad to see Robert Rose's name there. I think he's a little more qualified for the topic and he may have avoided some other issues. But give us just a synopsis. I know a lot of what we talked about is what Killing Marketing is about. But give us the elevator pitch.
Joe Pulizzi: That’s the whole idea. It's basically we're our own worst enemies as marketing executives, because we basically haven't changed our model in marketing in the last 50 to 75 years even though all the control has gone over to consumers. We're still trying to disrupt, we're still trying to use campaigns. We're not building loyal audiences. And it's a shame.
There's so much content out there being created that's just a waste. Everybody's waste of time. Most of the companies that we talk to about content marketing that are getting into it, I end up just recommending them, “Just don't do anything if you're only going to do it over a short period of time or you're not going to be the best at your specific niche. You're just wasting your time. Go interrupt people then. Go waste your money on advertising. That's fine.”
What we talk about in Killing Marketing is we need to rethink the marketing model entirely. We believe that the new model for marketing isn't just for marketing. We believe it's a business model.
That's what you and I are talking about here. If you build a loyal audience as core to marketing, it can not only pay for itself as marketing, it can grow as an important part of the business of the revenue and profit of the business all by itself, without even having to think about what products and services you're going to sell. That you can be self-sustained. We've seen this at Cleveland Clinic, we've sent it at Red Bull, we’ve seen it at Johnson & Johnson. We’ve seen it at Arrow Electronics. The models are already out there.
Pepsi and Mondelez just said that they're trying to do it as well, where they're trying to create revenue and profit from their marketing. This is something that people are talking about, but they're not yet there. It's still new even though you and I have been talking about it for 20 years.
Now we're at the point where I think companies are starting to make it happen. And I think you can either get on the train or keep doing it the way that it's always been done and you'd be out of a job in 10 years, maybe five years, maybe two years.
If you're serious about being a marketer of any kind, I don't know if there's another model, Brian. I really don't.
I think if you've got a big old budget and you don't have to show a lot of return and you can waste a lot of dollars, then you're fine with that advertising model. You're fine with that same old content model where you're driving leads and everything's short term. You'll be fine if you don't have to show performance.
But if you really want to show a difference — by the way, the other things we talked about, the new products and services that you're going to end up launching are going to come from your marketing. That's what a lot of people don't realize. Your R&D is your marketing now. A lot of people aren't thinking of it that way. So, I think this is not just the marketing model, but the business model for the future.
Brian Clark: Solid. The new book will be out in September to coincide with this year's Content Marketing World. I will see you there. Joe, thanks so much for coming on the show.
Joe Pulizzi: Anytime. You know that, my friend, I always have a good time chatting with you.
Brian Clark: Absolutely. Can't wait, it's always a good time in Cleveland despite the LeBron let down.
Joe Pulizzi: No worries, he’s still here for now.
Brian Clark: All right, Everyone, two words to remember — audience and email.
All right. The specific revenue model that you end up with out of these eight or the handful of revenue models, which is probably the smarter way to think about it, it doesn't really matter, you're going to find it. Build that audience, focus on email, and pay attention. And as always, keep going.