Last month, Paul Walborsky stepped down after seven years as chief executive of Gigaom. During that time, the tech site grew enormously in traffic and revenue as it expanded its business beyond just advertising. Currently, about 60 percent of Gigaom’s revenues (estimated to be around $15 million annually) come from research and 25 percent from events. Advertising accounts for only about 15 percent of total revenues. Walborsky, who is 48, spoke with PBS MediaShift about the struggles of running an editorial-based business when competition is fierce and ad rates continue to slump.
Gabriel Kahn: In media, size matters. How does an operation like Gigaom, which averages about 6.5 million unique visitors a month, make a go of it?
Paul Walborsky: Media either has to be huge, at the BuzzFeed level, or small and intimate.
When we started, we looked at each other and said, “We’re never going to get to a 100 million uniques.” The type of content we write is more analytical. We can squeeze about 20 million page views a month out of our audience. If we tried to build an editorial business just based on advertising we’d never be able to pay our staff.
So chasing page views is a dead end?
Paul Walborsky: Our whole concept was not to serve you another page and make you click once more; it was to give you a good user experience. So by definition we had to have a different business model. I don’t think about creating page views. I think about creating long-term relationships with readers. If you have a long-term relationship, you do different things. You get them to come back. You serve them well. And you then try to upsell them more products and services...
...Paul Walborsky: Editorial is the focal point of our business model. This is where we create credibility. That is what keeps people coming back. Without our editorial content, without people writing things everyday that make readers feel smarter, we would not have a brand. We just choose not to monetize that content directly. We monetize it in different ways...
By this logic, when Gigaom uses space on a page to sell an ad, it almost represents a failure because the company itself should be able to find a better use for that same space.
Paul Walborsky: The situation in media is laughable. When we sell ad units, we are basically selling our reader relationship to someone who doesn’t care about it. The advertisers are selling a car or a trip to Vegas. If we could create enough products, we could use that space ourselves to sell that audience something that is actually meaningful to them.
That’s what we did with our research. Then other companies began doing the same.
We saw Politico Pro come out, then Business Insider came out with research....