Medium’s advertising product never made it out of beta.
The publishing platform created by Twitter co-founder Evan Williams will shut down its Promoted Stories ad product that had been released in beta in April 2016, according to a person familiar with the matter.
The decision to eliminate its ad product coincides with Medium rethinking its business model and laying off 50 employees, or one-third of its staff, on Wednesday. Williams announced the latter moves in a blog post published on Wednesday, but he did not specify the status of Medium’s advertising business. A Medium spokesperson referred a request for comment to the blog post.
Medium introduced Promoted Stories in April as a way for the platform and publishers, like The Awl, The Bold Italic and Pacific Standard, that call Medium home to make money. Advertisers would pay to have their own Medium posts placed at the bottom of those publishers’ Medium posts. Brands like Bose, SoFi and Intel were among the first to buy Medium’s ad product, but it’s unclear how Promoted Stories performed and whether the ad format could lay the foundation for a sustainable revenue stream. Based on Williams’ blog post, it seems to have laid the wrong foundation.
“In building out this model, we realized we didn’t yet have the right solution to the big question of driving payment for quality content. We had started scaling up the teams to sell and support products that were, at best, incremental improvements on the ad-driven publishing model, not the transformative model we were aiming for,” Williams wrote.
Of the 50 employees Medium has laid off, most worked in “sales, support, and other business functions,” according to Williams. While Medium could conceivably continue to sell its Promoted Stories with a skeletal sales staff or rely on outside ad sales firms like Nativ.ly that had helped to arrange Medium’s initial advertiser deals, the company appears to be getting out of advertising altogether, at least for now.
“It’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people,” Williams wrote.
And Medium may not have been able to serve its ads to enough people. In December 2016 the company said that 60 million people visited its platform in November, up 140 percent from 25 million the year before. That’s a lot of people, but it’s less if you’re an advertiser who can get in front of many times more people on Facebook, Google or even Twitter with more precision than what blog post those people are reading.
Thanks to digital platforms’ abilities to pinpoint brands’ ads to large numbers of individual with specifics characteristics, digital advertising has swung to center itself, for better or worse, around the audience that brands can get in front of, not the content they can appear adjacent to. Historically content may have served as a proxy for the audience a publisher could offer. After all the content historically had served as a proxy for the audience, but that proxy is no longer needed with all the behavioral tracking that companies like Facebook and Google do to build audience profiles. As a result advertisers have devalued content, which has made it difficult for media companies like Medium and those who publish on its platform to reap the right value for their content.
Medium’s advertising revenue may be on pause, if not kaput, but Medium’s platform is not. According to Williams, Medium is looking into other business models. He didn’t state what those other business models may be, but they appear to be centered on readers, not advertisers, paying for content. Medium already introduced a subscription revenue stream in April so that individual publishers could charge people to check out their content and split the money with Medium.