Breaking Down Silos Has Never Been More Important

By Jacob Cohen Donnelly April 21, 2023

Hindsight’s a bitch. I can’t tell you the number of times I’ve sat in meetings and heard someone say, “if we could have done that, why didn’t we?” It’s always used as a way of assigning blame, as if decisions are made in isolation.

There are any number of reasons why something wasn’t done. And sure, there is certainly value in digging into decision-making processes to make sure that we get better. But I find the best thing we as operators can do is recognize something should have been done and start doing it going forward.

An example of this includes collecting first-party data. The best time to start collecting first-party data is when you started. The next best time is yesterday. And the next best time is now. You can’t correct the past; you can only learn from it.

Well, here’s another example: silos at media companies are bad. And it has never been more important to break them down. I know many of my readers work at media companies with silos.

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Before we jump in…

I would like to get to know you all better and understand what would help make AMO even more impactful to the businesses you’re building. I’d love to set up some time where we could talk a bit about your business and how AMO can help you more. Plus, you’re all operators and hearing from the best media operators in the world on how to grow AMO is a special opportunity.

If you’re interested, please hit reply and we’ll get some time on the calendars.

Now let’s get back to it…

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The ad team doesn’t talk to the subscriptions team. The acquisition team doesn’t even talk with the retention team. Incentives are all misaligned. And when that happens, inefficiencies happen. We hire more people to try and fix those inefficiencies, so our margins compress.

The best time to fix these silos would have been to never let them happen to begin with. The next best time? Before the economy turned, so you had a more efficient business. But since we can’t go back in time, let me say this: today is the best day to break down the silos in your business.

So, let’s dig in, using a couple of the examples I mentioned above.

The single most important thing for any company is to maximize its highest-margin revenue. We need to be as cash flow positive as possible so that we can handle the cyclical nature of these businesses, especially if we operate in the ad world.

If you asked the head of ad sales what the most important thing is, they’d say “selling ads.” And if you asked the head of subscriptions, they’d say “selling subscriptions.” Neither of these people are saying, “maximizing revenue.”

In too many media companies, these two people sit in different organizations. But they shouldn’t because they are both revenue functions. Said differently, the goal should not be to sell more ads or sell more subscriptions; instead, it should be to make the company more money.

And some media companies are starting to realize this. Before Joy Robins left the Washington Post for The New York Times, she was CRO. In January 2022, the company announced something interesting:

The Washington Post today announced it is promoting Chief Revenue Officer Joy Robins, expanding her role to oversee both advertising and subscription revenue. Robins will be responsible for growing the overall business, including increasing digital subscriptions and overseeing the ongoing development of advertising partnerships.

“There is tremendous opportunity in coordinating our revenue strategy to focus on our audience and the experience of being a Washington Post subscriber,” said Robins. “When we align our business approach with the reader, we build a stronger offering that will positively impact both our subscription and advertising businesses.”

Bingo. The revenue strategy needs to work hand-in-hand to make sure that the business overall is growing, even if it means individual business units struggle.

Vox Media did a similar thing in 2022 when it added subscriptions to CRO Ryan Pauley’s responsibilities. Adweek wrote at the time:

The additional responsibilities reflect a growing trend across the media industry to intertwine advertising and consumer revenue departments, as strategic changes to one typically affect the other.

“Historically, advertising and subscriptions have had separate leaders because they require different kinds of planning,” Pauley said. “But there is a lot more interplay between them now, so when it comes to making trade-offs between the two, having them under a single leader creates a single point of accountability.”

This makes perfect sense. Pauley’s incentives should be aligned to overall revenue, not just ad revenue. If the company can make more money selling commerce than it could selling a big advertising campaign, he should be empowered to make that decision. In the past, there would have been tension between the two teams.

By breaking down these silos, the revenue organizations can optimize more quickly to what is the greatest revenue opportunity. Sometimes it’ll be subscriptions; sometimes it’ll be ads. Which it is does not matter as much as whether you’re maximizing the revenue generated by user. But when there isn’t a single revenue person deciding—or the two sides are competing with each other—it becomes more difficult to achieve success.

Another example I mentioned above is the acquisition vs. retention teams. There are media companies, today, that don’t have these teams working together or even reporting into the same department. And it’s insanity. But for subscription companies, acquisition and retention are the two major levers that exist that determine whether the business grows or not.

Unfortunately, the incentives between the two teams are misaligned. The acquisition team is myopically focused on growing subscriptions, but once they get someone, it’s not their problem anymore. And it’s the opposite for retention teams; they only care when there’s a subscriber to retain.

Here’s a classic problem… Many publications will advertise that a subscription will cost $1 for the first six months. Lots of people sign up because that’s a great deal. And so, the acquisition team celebrates because they’re crushing their goal.

Six months later, the retention team is fighting to retain those people when the full price subscription comes due. Even if full price is only $1 a month, you’re asking someone to go from paying $1 for six months to $6 for six months, a major jump. And often times, full price is multiple times higher. Is it any wonder that people churn so much?

And so, the two teams fight each other because retention deals with all the angst when they can’t retain the cheap subscribers that were acquired. If the teams were working together, there’d be a clearer path to success.

Within the acquisition team, silos can also form. I’ve heard of scenarios where different people do different things without communicating. The messaging used to describe a product in email looks different than the ads that run on social, which also looks different than what’s on the actual landing page. Why? Sometimes teams are so large, channels have their own silos. This is unbelievably inefficient.

Even if we remove the inefficiency from a team perspective, there’s also the problem of software. What one team uses might not be entirely compatible with another piece of software. Does your ESP link up with your subscription management? What about your CDP? You start hiring people to manage these connections. Tools are bought to break down the silos and things just get more and more expensive.

That doesn’t mean all silos are bad, though. But those silos need to be at the brand level, not within a brand. For example, Conde Nast owns multiple different brands. It would be incredibly complicated to holistically break down silos between each brand. What works for one brand might not work for another, so teams need to be incentivized on their respective brands. But within each brand, breaking down silos as best as possible is ideal.

In hindsight, we should have never let things get this bad. But when we were building, we didn’t realize we were making these mistakes. Today is a great day to start eliminating those silos, though. Identify where you can streamline operations. It’s never been more important.

Thanks for reading. If you have thoughts, hit reply or join the AMO Slack. I hope you have a great weekend!