The great repricing

In today’s newsletter, I wrote a member piece about evidence that we are in the midst of a market repricing that will have rippling effects. Also, a conversation with Stephanie Kaplan-Lewis, CEO of Her Campus.

The bootstrapped path

The ultimate discipline is running a business on cash flow. Stephanie Kaplan Lewis founded Her Campus in 2009 with Annie Wang, and Windsor Western as college undergraduates. They saw a need for college women to have a publication made for them by other college women.

Her Campus has grown since then as a profitable, growing media business with 85 employees that has now expanded with a half dozen acquisitions, including College Fashionista and influencer marketing platform Zfluence. Stephanie says Her Campus expanded revenue by 50% last year – and did it with an entirely ad-focused business model. Stephanie credits the growth in large part to building a long-term business that works in any environment rather than a specific environment, such as the easy-money era that’s now in the rear-view mirror.

The twist is that Her Campus is part agency, part publisher, with campaigns leaning on experiential and influencer marketing. This is a path many publishing models will go, as the economics of relying on putting ads on webpages or newsletters grow more difficult. Stephanie and I discuss:

• The forced discipline of a bootstrapped model. Her Campus has been profitable for all 15 years of its existence. Imagine.
• Not aging up with the audience. Her Campus turns its audience over by design, as it stays focused on college women. When it started, Her Campus was for millennials, and now it’s for Gen Z. 
• Being part agency, part publisher. Her Campus ends up with other media companies as customers. 
• Doing the basics well. In the media business, strategy is overrated. Execution tends to play a bigger role in separating winners and losers. That means doing the boring things well: Setting achievable sales goals and hitting them, excelling at client service, collecting receivables and such.

Really enjoyed this conversation. Give it a listen on Apple | Spotify | other platforms

Succeeding with video ads

Designing a video monetization strategy can be overwhelming. That’s why EX.CO has created “The Publisher’s Blueprint to Achieving Successful Video Monetization at Scale.” This valuable resource includes simple steps guaranteed to maximize your video monetization, including the necessary materials and techniques you’ll need to assemble your program and grow. 

The great repricing

Markets tend to self-correct, and economies reshape in time. Coming out of the zero-interest rate policy era, we’re seeing the market enact repricing of assets across the board. Think of Reddit. This is broadly the exact same business it was in 2021. Massive distribution, massive costs, a growing ad business but no profits. In 2021, that was enough to earn it a $10 billion valuation. Now, exposed to the broader market, it will at most only take a 40% discount. 

The ZIRP distortions are across the board. It wasn’t just Hopin at $7.8 billion that didn’t make sense. Environments change, and the price of assets fluctuate. This is well beyond a story of a tech bubble. The media industry is seeing a great repricing that is not just affecting the valuation of VC-backed publishers. Many publishers will need to adapt to this repricing of their underlying value.