Issue no. 248. The last one had a 44.94% open rate. The most-read article happens to be about predicting startup success in the CPG space. There was a concluding para that I disagreed with:

Historically, in each generation there have always been a handful of new consumer brands that emerge that later become household names. What’s unique about our current environment is that new brands now have the potential to directly reach their target customers without the restraints of the wholesale channel, and therefore can scale quickly.

The majority of successful DNVB's will have wholesale accounts and sales associates, as brick and mortar business will continue to be a factor in reaching beyond the $5-7M/year growth plateau.

BRIEF: Mizzen+Main invites STL rapper Chingy (aka "Ching-a-ling") to the Christmas party, hilarity ensues. And Patreon backs down from their ill-advised fee change.

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Today's Top Intelligence (10 Reads)
9 Boxes | Jonah Peretti on Buzzfeed's Future
Digital Media: We are beginning to see this shift, but we will have to continue to fight hard to get paid our fair share. Creating quality content is our best weapon in this fight — we’ll double down on strong journalism; lifestyle brands with distinct, meaningful positions; new formats and more of the classic BuzzFeed articles, lists and quizzes that connect with our audience. In the short term, the ecosystem favors reducing content costs and a race to the bottom, but we are focused on the long term. In the long run the best content will win.

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Logistics: As the foundation starts to crumble, restaurants and the people who love them need to be prepared for what’s to come. Operational costs and commissions are going up, and these delivery companies will need to offset costs somewhere — most likely, that will look like hiking up customer delivery fees. If we’re not prepared to pay the price, we’ll have to become our own delivery drivers.

Digital Media: Over the course of 2017, the search engine has become publishers’ main source of external page views, according to new data from, a digital analytics company. It’s basically a flip from the beginning of the year: In January, Facebook provided nearly 40 percent of publishers’ external traffic; now that’s down to 26 percent. \
Retail: With his own shop logo T-shirts outselling the more established skate brand clothing, Jebbia continued to commission a variety of color variations of the simple designs. He also partnered with American clothing manufacturer Brents Sportswear to produce heavyweight crewneck sweatshirts and hoodies featuring the same Box Logo embroidered on the chest.

Bricks and Mortar: The future of brick-and-mortar bookstores has been in peril for at least a decade. But whether you’re actually shopping for a book or not, you might actually find yourself wandering into a bookstore by accident. Because fashion brands, from French icon Sonia Rykiel to New York City-based Warby Parker, are curating books not as objects to read but as objects of décor.

Bricks and Mortar: Alibaba portrays its move into physical as consistent with its history of helping merchants sell their goods—and taking a cut in the process. (Unlike Amazon, Alibaba isn’t an online retailer; rather it’s a marketplace for other merchants.) Zhang notes that e-commerce accounts for only 15% of consumption in China, making for fertile ground to collaborate with (read: sell services to) off-line merchants. Thus, Alibaba tested cashierless checkout at Hema—Amazon is trying this at its physical bookstores—and is now bringing it to Sanjiang Shopping Club, a discount grocery chain in which Alibaba has invested $300 million

eCommerce: Armarium’s online shoppers will also have access to this service on its website through the company’s new chatbot, Armibot, which requests information about body type, occasion and aesthetic preferences and matches users with one of Amarium’s stylists, including Nausheen Shah and styling duo Meredith Melling and Valerie Boster of La Marque. For a fee of $85 to $110, these stylists will curate and send shoppers lookbooks within 24 hours. (Shoppers can also receive styling advice from an unnamed, in-house stylist for free.)

Voice First: That’s why, this spring, Amazon launched a restrictive ad policy that bans third-party ads from skills, unless those skills stream content. Instead, Amazon is encouraging innovations by subsidizing the developers themselves. (In a statement to Backchannel, Amazon explained that the approach “is focused on delivering a delightful experience for customers, and exploring ways for developers to monetize skills while maintaining the best possible experience for our customers.”)

eCommerce: Another domino just fell in the wake of the Amazon - Whole Foods acquisition.Target announced on Wednesday morning that it plans to make one of its biggest acquisitions in recent history by purchasing Shipt, a startup that delivers groceries on the same day customers place an order, for $550 million in cash. Like its chief rival Instacart, Shipt partners with a network of brick-and-mortar grocery chains to pick orders off of their shelves and deliver them to customer doors on the same day they are ordered.

eCommerce: The duel between Walmart and Amazon could go in two directions. It might escalate into a war across America, for both companies hate losing. Or each firm might conquer different geographical areas and demographic groups. Amazon could seize well-to-do cities, where population density is high and home delivery is more efficient. Walmart could continue to rule suburbia.

Today's Last Word
For quite sometime, I was fascinated by the storm that is digital media. If Jonah Peretti is scared, so is just about everyone else. Buying, selling, shifting, moving, falling, rising - the tectonic plates beneath the foundation of digital media are moving ever faster. Only visionaries capable of playing three dimensional chest will remain on the sturdy ground. Count Jessica Lessin as one of them.

After a three-year stint in and around the digital media space, I have seen enough to know that executives must be forward-thinking to survive this whirlwind. I know some who are, I know many who are not. So O'Neil's words strike me because many will read them today after reading Peretti's words on Buzzfeed's future. Here's a striking para from O'Neil's essay:

Dailies who aren’t already well ahead of the game in terms of reverting back to subscription models, or of significant enough national prominence, or don’t find their own relatively benevolent billionaire owner, will continue to either be neutered or flattened out by conglomerates into content distributors. The ones that don’t will buy some time, but will ultimately become vanity projects read only by people wealthy enough to remain interested in the superficial comings and goings of other wealthy people.

To Luke's point,the remedies that I envisioned were tactical departure for most in the media space (and very difficult to execute). These were the five points on my whiteboard: 

  1. Build a premium subscription product for our most loyal. Do not ignore this advice, bosses. Recurring revenue is something that we can build upon.  
  2. Let's treat news like a commodity but let's treat our platform as a brand. This means avoid discounts or promotions. It also means that we must think like a CMO.
  3. Direct-to-consumer commerce and native advertising partnerships should be influenced by affiliate data. Affiliate revenue is a treasure trove of data.
  4. Let's measure success, not in DAU or MAU but in affiliate / D2C commerce conversion. What are eyes without the ability to influence the mind (i.e. cart conversions)? 
  5. Let's build a community, not a readership. Communities persist, readerships do not.
Read Neiman Lab's 2018 predictions in journalism, including Luke O'Neil's "The End is Already Here."

This is just my opinion. -
@Web Smith
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