Brand Safety: Parse.ly founders Andrew Montalenti and Sachin Kamdar chat about their analytics platform and share the content trends they are following during the global pandemic. They discuss how publishers and media outlets are being impacted by COVID-19, and the myriad ways that advertising and brand safety are changing. They also share how to give clarity to clients in a time of uncertainty: with the insights of analytics.
Paul Ford You know, normally we say, “Alright, back to work.” [Chuckles] Except no one’s leaving the room today.
Rich Ziade “Go back to your dinette set.”
Sachin Kamdar [Laughs] “Back to your pajamas” [laughs, music plays alone for 18 seconds, ramps down].
PF Hello, friends.
Andrew Montalenti Alright, hey.
RZ Paul, we’re not alone today. We have some guests.
PF Rich, Andrew Montalenti and Sachin Kamdar are here, and they are the cofounders of Parse.ly [pronounced ‘parsley’].
RZ Guys, you know, I love a good entrepreneur story [music fades out]. So tell us the story behind Parse.ly and tell us what it does, and I guess, if possible, give us the elevator pitch but the building’s not very tall. It’s only, like, 15 stories.
SK [Chuckling] So, Andrew and I got started in terms of just our relationship as college roommates. So we knew each other back at NYU. We were roommates our senior year; we would always geek about startups, technology, for fun we would build business plans around different ideas that we had—nothing too serious that we wanted to execute on top of, just sharing our joint interest, and after college we went our separate ways, worked for large organizations, realized that we both hated that for similar reasons around not being able to see the fruits of our labor through the impact that we can make in those organizations.
AM So then we did what every good entrepreneur did: we quit our jobs on the same day, at the height of the last Great Recession. So [laughs].
AM And we basically just started working on the shell of what was gonna become Parse.ly when there was nothing but financial distress all around us. So, we got the company started basically around 2009, got the company funded only two years later. So sort of bootstrapped the company for the first two years of its life. And then landed on a core product for the content and media ecosystem around 2012 and grew the company up since then.
RZ So, what’s the opening you saw? You know, there are a lot of tools like this.
RZ What was the gap?
SK It was a series of pivots. You know, Andrew and I have always been focused and interested in digital content and we had a consumer facing application we launched that was kind of in the personalization space. We saw the ability to build that service for media companies. And the way that we built it for consumers, and that worked, and we started to get more of an understanding of how media companies operated, and where there were clear needs, paying points, and opportunities. And what we saw is that every media company spoke a big game about data as a cornerstone piece of a strategy and technology for their business but then in practice we saw that there were only a couple of people at the organization that were using analytics not built for content to help drive the business forward and that just wasn’t working. And so, we wanted to do two things: build an analytics platform from the ground up, specifically for content; and then two: make it so that it was accessible and democratized across the organization, especially so that creators can understand what their audience wanted, what they were interested in, where they were coming from, and use that insight and use that information to develop more compelling stories that would drive larger audiences, bigger engagement. And so over time from there working with media companies, we started to work more entertainment companies, and then we’ve expanded to just anybody that cares about growing an audience through content which has launched our ability to grow inside of many verticals today.
PF Give us an example of a kind—I mean, you know, we’re on a podcast, so it’s hard to see a dashboard. Like, I log in to my Parse.ly account, I am at a website called The News of New York, and what do I see?
AM You end up seeing a really detailed view of all of your content first, sorted by a number of metrics that Parse.ly measure. So, we measure things like the views of the content but also the engage time, like how often—or how long people are spending on each page of content, and organic sharing offsite on platforms like Facebook and Twitter and so on. But then you also see all the content grouped by things like category, theme, topical tag, author, by when you published it, and any number of other grouping criteria. So basically it’s like, if you run a CMS or you run a news room or a media company, you can get the complete multidimensional view of all the content you’re publishing, and what’s causing different people to come to your site at different times and why they’re staying.
PF So it’s got some smarts about content. Like, it tells me that, you know, people are really interested in articles about viruses these days, or, you know, things like that.
PF Ok, and then how many cli—you have a lot of clients, right?
SK Yeah, we work with about 400 enterprises spanning media companies, large entertainment companies and then we work with marketing teams at a lot of large brands as well to better create their own content and trying to drive audience and business value back through that content.
PF So, indirectly, across the media, you’re able to see what hundreds of millions of people are looking at and thinking about and how they’re behaving right now.
AM It’s over a billion people—
AM—a month actually. Yeah.
PF How are you finding sales at this exact moment?
SK Yeah, it’s day by day. So, I mean, we have been—we’re thankful that we have looks, you know, knock on wood, we’re still getting [chuckles] the numbers today cuz it’s April 1st that we’re gonna hit our target for Q1 for this year. There was a lot of noise over the last two weeks, a lot of customers that had fear and uncertainty about doing business with us but handling those conversations one on one, when our sales team and our executives proved to be fruitful. I don’t think I feel confident in saying what’s gonna happen in Q2 but I think that there are opportunities here. We can focus on those opportunities and help our customers and our prospects win with that. That’s gonna prove valuable for them and for us, and with people who are in pain, what can we give them to help them get around that pain and solve through the problems that they have. So, for our current customers, it’s not about how can we upsell them? It’s, “What can we do to help you out?” And for any prospects we’re talking to it’s, “How can we make sure that you’re getting the critical analysis and insights you need to hopefully make a healthy pivot into success in the next couple months?”
PF I mean and let’s—let’s talk a little about some of the changes you’ve seen industry-wide.
SK I think, Andrew, you have some like good data on just broad trends that we’re seeing related to content consumption, and then I know you recently did an analysis kinda looking at the changes within different topic areas. That would be cool to dive in—
AM Yeah. Yeah. So, at a high level, Paul, basically this is the biggest single that Parse.ly has seen in over six or seven years of measuring a really large number of traffic, in terms of a change in how people view content online. So, first of all, in a two week span, in kind of the build up of the crisis, we saw something on the order of a 60% increase in traffic to content publishers overall. And that’s basically—
AM—spanning across every content category. What you ended up seeing there that’s kind of interesting is that, I think, we measured that something like 13 to 15% of that traffic was coming from specifically coronavirus related content. But actually people are just reading content overall a lot more. Not just related to the crisis. The crisis obviously, as you mentioned, is causing a lot of people to work from home, to use their devices a little bit more. And that’s causing people to check on news content and information content more frequently. Of course, the virus itself is also causing people to check content about the crisis itself more frequently too. But we actually saw a growth in traffic across a number of categories. I think what—so Sachin was mentioning about different categories that are growing at different levels, we see a really big growth in content related to personal finance and business. That kind of makes a lot of sense given the effect on the markets, right?
PF That may not be there for much longer.
AM [Laughs] Yeah—well, I dunno. It depends on whether you believe in a V-shaped or an L-shaped recovery, I guess, but if it’s an L-shaped recovery, it might be there for a while. Right? And then the other side that we also see is there’s just a huge new level of interest in content around things like health, fitness, and science. That was another just like, big standout difference from the prior period. So, I think basically people are more curious about the things that they’re directly being affected by in this change. But I’ll just also say they’re just reading more content and online more too, right?
SK And I’ll just add to that, that over the past several years we’ve just seen content consumption go up in general. So irrespective of events, people have just been consuming more content. But there’s obviously a fixed limit with that because there’s only so much time in a day that somebody can spend doing that so that eventually flattens out. Now, I think, what has happened with, you know, the coronavirus and forcing people to work from home is that it’s expanded a window of time where people can consume more. And so I think we’re seeing that accelerate as a result of that, and then also we’re just seeing people more interested in following general news: what’s going on with the markets; what’s going on with the coronavirus because of the uncertainty that’s going on. So I think it’s a mixture of those two things. That’s anecdotal, we don’t have direct data to support that quantitatively but it makes sense that there’s gonna be a spike and I would guess that so long as people are working from and if the new normal is more people working from home, I think that influx of time spent on content consumption will stay. And I think there’s other sources that are backing that up too, just like the fact that Netflix and other streaming services are having crazy highs in terms of consumption.
PF From a macro point of view, we’ve truly unlocked engagement. And everyone’s been saying for years, “There’s only so many hours in a day.” But all it took was a global pandemic and we were able to find [others laugh] two or three extra hours a day for media.
RZ I feel like also the stigma of screen time is on pause. The whole like, “Hey, watch your time. Interact with each other! Let’s go out for drinks. Stop staring at your screen.” And like, “Ah, don’t worry about it, go ahead and stare at your screen for a while.” That’s all we’ve got for an indefinite period of time.
SK I think that—I mean, I was listening to NPR yesterday morning and they were focusing on just like food. And they were interviewing somebody that runs this recipe blog and they were interviewing people that were calling in too, and people are just like, “Yeah, focusing on health is just outside of the window [chuckling] of what we’re trying to do right now.” So I think these like—There are some people, I think, that are trying to create healthy habits out of what’s going on, and then there are other people that are just like, you know, “There’s so much going on, the last thing we need is more restrictions to what we might find as potential enjoyment.”
PF You guys are—were already pretty remote, right?
SK Yeah. So about 70% of the employee count at Parse.ly was work from home. Operationally, though, we have always operated as a fully distributed team, and jokingly we even call our office in New York City our internet cafe because on any given time, we’re gonna have a handful of people that even work from home, you know, one or two days a week, so it wasn’t shifting the whole company to work from home during this. It wasn’t a big kinda jump for us. But, like we were discussing earlier, Paul, that doesn’t mean that that doesn’t create—an environment like this doesn’t create anxiety or we need to make sure that, you know, we’re addressing fears or uncertainty that might exist with our employees.
PF Well that’s the fantasy—the fantasy was like this is about work from home, this about working during a global crisis and health event which is different from [yeah], you know, [totally] setting up a home office with a nice video camera.
AM Yeah, I think a lot of people have been pointing out the fact that this isn’t normal work from home and a lot of teams, you know, they’re—Parse.ly is a relatively mid-sized team but there are a lot of teams out there that have been fully distributed at the scale of hundreds or even thousands of employees, and maybe for many years, and that style of distributed team work from home, not under duress, and not because you were kind of told to do it, is pretty different from what people are facing right now which is in a hurry trying to virtualize a lot of processes that used to be in-person. So people should expect to be a bit more stressed about that. But Parse.ly’s fortunate that we already had sort of a distributed team setup and it didn’t really have to change much given all this.
PF How big is the team?
SK We’re a little over 50 people.
PF Alright, so, analogous to our size. How are you two finding—cuz you’re—it’s a little bit of like looking in the mirror, right? Like you’re looking at me and Rich, like how are you finding leadership and sort of cofoundership in this moment? For me, I find that our message is, you know, we’ve doubled the number of all-hands and there’s a lot more like, “We’re gonna be ok.” And sort of maybe less operational focus and more just like, “Let’s just keep it together and get our stuff done.”
SK I think my take is a little bit different than that. I think communication with the company is incredibly important. We’re not necessarily increasing the number of all-hands but we’re doing weekly updates from me or from me and Andrew about what’s going on with the company. I think we’re trying to also be honest that though things are looking fine for now, we don’t know where this will take us. And we’re kind of really trying to understand the dynamics of the business, and maybe, Paul, we could talk a little bit about what we’re seeing from a customer side at Parse.ly with the ups [mm hmm] and downs that are going on cuz there are opportunities here and there are, you know, there are—or is some pain that our customers are going through. But I think actually operationally that’s really important. I think our team wants to see that we’re taking action. Not just action for action’s sake but they wanna see that we’re doing things that are gonna help impact them; impact our customers; impact our potential customers, and I think if we don’t do that then there’s kind of like a question of, “Well, what is Parse.ly doing to help here?” And so I think that has been my priory focus over the last couple of weeks is really getting that together. And, you know, the customers that are getting the most impacted by this, by far, are any customers that are in local news, and we work with, you know, companies like Gannett, we work with companies like Lee Enterprises, we work with Berkshire Hathaway—all kind of these big local news conglomerates and with all these businesses shutting down, the small businesses, which were their main advertising source, they’re getting hit hard. So, for them, like, they’re getting hit the hardest, we’re just trying to figure out what we can do to help them out; how can we ensure that, you know, they get the clarity that they need to continue to drive their business forward. So the advertising revenue is just like getting hit really hard. A lot of them have kind of subscriptions that are in play but they don’t really have that making up for what’s happening and so there’s some concern there and we’re tryna just help support them. On the other media sites, so there’s general digital media and more around the premium digital media players, there’s like, a huge increase of traffic. There’s a blacklist on coronavirus content which a lot of that traffic is going but like Andrew said earlier it’s not just coronavirus content. And then there’s next step on an increase to subscriptions. So I’ve talked with several executives over the past week and a half and they’re all seeing subscriptions go up to their business. So there has been a translation of that traffic into subscriptions but the big question that they don’t have a good understanding of is why that’s happening and what they can do to accelerate that. So part of what we’re offering to our customers is the ability to opt into a [sic] add-on to our platform that we launched at the end of last year called ‘content conversions’. And really what that helps you do is understand how content and your broad content topics, authors, sections are helping to drive different types of conversions like subscriptions, sign ups, link clips, things like that. And we’re giving that for free from today, basically, all the way through May 30th, and we might even expand it beyond that if the need is there. Big reason why is they need this clarity. If they can help accelerate that side of the business that’s gonna cover for the downside that they might be experiencing on the advertising. So that’s one side of customers.
SK [Continued] Now, the other customers that we work with and I think, Paul, when we last met we were talking about this, you know, between us three which is the other area of the business has been growing and it’s really marketing teams that are creating content themselves and they work across many different verticals for us from financial services, professional services, to large B to C to, you know, anywhere in between that. And so for them it’s a little bit of a different focus, what they have seen happen is that all of the field marketing; the field sales; events; conferences are just gone. And they’re gone basically for 2020. They’re pulling back from all that stuff. But they still have the budget there. They still have the personnel that’s handling that and so there’s been a huge shift over to digital. Digital first; digital only as the way to help them generate the, you know, branding awareness they need and then also generate the kind of leads on the B to B side; the conversions that they need; and so in a similar way but for a very different reason, they also need clarity with how to make the shift to digital first, digital only, and how to make sure they’re justifying that the work they’re doing on digital is creating the business value that’s important for their teams, themselves, and their company. And so we’re actually doing the same thing. For anybody that’s in that space, whether you’re a new customer, whether you’re a current customer, whether you’re a prospect, you’re gonna get access to that same report for free. If you don’t wanna use anything else, that’s fine. If you don’t wanna sign up for Parse.ly after this period, that’s fine. We’re just hoping to provide more transparency around how that shift can be successful for you.
RZ You’re bringing up a goo—an interesting point here which is—and I’ve read this, I think, in a couple of places. The hosting bills are goin’ up cuz the traffic’s spiked up but the ad revenue is going down cuz everybody’s confused right now.
AM So the ad revenue isn’t necessarily going down everywhere, the problem is that certain brand advertisers are using brand safety tools to block ads on pages that explicitly mention COVID or coronavirus or other sort of less brand safe traffic topics. And unfortunately because the crisis is so pervasive, it’s bleeding into so much other coverage that sometimes perfectly good ad impressions are being blocked just out of an abundance of caution on the part of the brand advertiser. Now, alongside that you have other content that’s getting more traffic and so there are some ad impressions being made up for, but in general it sounds like when we talk to our customers they’re being hurt in a lot of the premium categories, for example a lot of the premium publishers out there. I think like Vox and The Atlantic and The New York Times pointed out the fact that they were even having homepage ads blocked just because the homepage was mentioning headlines about the pandemic. Right? So that can have a really big impact on a digital media company. And then like Sachin mentioned, there’s also local news impact just because of the knock on effect of small businesses being shut down and there just being less advertising revenue overall. So there is sort of a—a big shift in the short-term just like the whole economy is experiencing, the ad industry is experiencing that sort of pause or shift. The other thing, though, that I think is maybe a silver lining, is that we’ve been talking for years to our customers about diversifying their revenue streams beyond ad impressions, and right now there’s quite a large segment of our customers who have gone pretty deep on turning anonymous traffic into identified traffic; on trying to get emails sign ups; and maybe making email based ad programs; and then even doing premium subscriptions; commerce, revenue—all of that stuff. And so now I think there’s just—this is kind of an event that causes those companies to say, “We really need to double-down on that stuff because ad impression revenue is just too give and take at this moment.”
PF Take us back a step, right? Like, brand safety is a thing we’re talking about and it sounds sensible in abstract but like, I’m an advertiser and I wanna put my ads on pages and I need to buy something called brand safety. What the hell am I buying? What is that actually?
AM Under the hood, from a technical standpoint, I think it’s pretty close to just thinking of it as here’s a bunch of really nasty keywords, I’m gonna block ads on pages that explicitly mention those keywords.
PF The publisher goes, “Hey, I got a page for you.” And some server somewhere goes, “Cool! I got some ads but hold on let me just look at your page real quick.”
AM Yeah and they say, “That page has ‘car crash’ on it. I don’t wanna advertise on ‘car crash’, right?” So—
PF No, cuz I’m Toyota [exactly]. Like that’s just bad—bad for me. Ok, so, like, is there a big brand safety player? Or is built in to the sort of—
AM Several ad tech companies are pretty deep in the brand safety space, and help the programmatic market with it.
PF And I’m assuming that they don’t respond to events in the way that we might. Are they dealing with this and going like, “Woah, hold on. Let’s—”
AM Oh yeah some of them have taken public stances but the key thing to understand is that in an ad tech ecosystem, for the most part, the customer is the brand. Right? The publisher is the provider of inventory. So they’re kind of doing what the brands are asking them to do and, you know, that’s kind of the key dynamic here. And that has to do with the broader move in the industry which is ceding control of your ad inventory to middlemen which does [right] lead to this problem, right?
SK No, I think this is not just a concern for publishers though too. You know, there’s talk about brands pulling back from maybe not more Google but more Facebook. So, as more people are just talking about what’s going on with the pandemic and coronavirus, there are brands that wanna pull away from Facebook because the newsfeed is just showing a lot of that stuff. And so in the same way they don’t wanna advertise on a publisher, they don’t wanna advertise related directly to people talking about the pandemic on Facebook. So, I wouldn’t be surprised if Facebook takes somewhat of a hit here, in the short-term. I think Google’s probably more protected against this. I would say that Twitter is also, you know, in the same zone as Facebook in terms of advertisers wanting to block any experience that has mention of this stuff.
AM To take a positive spin on it though: you know, advertising is a market right now and that does mean that because of the uncertainty there’s a pause inserting categories of ad spend. But then because it’s a market that means that the prices for that ad inventory drop. And other smart advertisers are going to take advantage of that drop and then bid back up the prices. It just might take time for that adjustment to happen because what you have happening right now is big advertisers like sports teams and movie theater chains are just putting a total pause on advertising. And so it’s gonna take time for other smart businesses to tap into that same inventory and bring it back up. Publishers are just stuck in the middle of that battle right now and have to fight for survival in the interim.
PF It’s very surreal to see all these follow-on effects, right? Cuz there’s this one huge event that’s incredibly serious and you can only give it a certain amount of your brain every day or you’ll get unbelievably depressed and then there’s all this other stuff [stammers]. Like we’re sort of starting to see the skeleton underneath all the bizarre marketplaces and incredibly abstract things that we’ve built [music fades in]. So, well, it’s good to know that the media is still—still has a fighting chance in the middle of all of this and it’s very interesting to hear what it looks like from a macro view. There’s just a lot of ferment. It’s gonna be a wild couple of months. Let’s check back in when we have some idea of what the hell is happening in the world.
AM Yeah, that sounds good.
SK That would be great.
PF If people wanna get in touch with you, what’s the best path?
SK firstname.lastname@example.org. So that’s hello@P-A-R-S-E-L-Y dot com. Parsley spelled differently.
PF Alright and that is incredibly convenient because if you need Postlight, Rich, where do people send an email?
PF My God, these organizations have so much in common. If you need things built or, you know, frankly, we’re not selling too hard right now.
AM Just write an email to both of us. Just put, you know, email@example.com and CC Postlight on there too.
PF We are glad to hear about anything going on. This is not a hard sales moment. Let us know [Rich laughs] what’s going on in your world and we’ll—we’ll reply with—to the best of our ability. Andrew, Sachin, thank you very much for coming on.
RZ Thank you, guys.
SK Thanks, Paul. Thanks, Rich [music ramps up, plays alone for three seconds, fades out to end].