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How To Build The World’s Largest Theme Park Fan Site (with Kurt Schmidt from Inside The Magic)

Ben Aston is joined by Kurt Schmidt, Owner of Inside the Magic, an online media company covering theme parks, movies and more. Listen to learn how to build the world’s largest theme park fan site.

Interview Highlights

  • Kurt Schmidt is a Credit Union CEO turned media CEO. He acquired the site Inside The Magic four years ago, back in 2018 when it was doing a measly 50 million page views a year. Now it’s the largest community of Disney fans in the world. They have got millions and millions of visitors and subscribers. [0:25]
  • Kurt’s transition to a media company CEO started when he felt like he was unfulfilling as a Credit Union CEO. So, he set out to purchase a business. When he found out he could potentially purchase a Disney fan site, Kurt immediately fell in love and said he had to do this. [1:25]
  • At Inside The Magic, the majority of the revenue comes from display ads. When Kurt bought the site, over 50% of revenue was coming from the YouTube channel. Today, very little is coming from the YouTube channel and it’s almost all from the website itself. [2:26]
  • When Kurt acquired the business, he thought that there was a cap on how big the site could become and he’d eventually have to buy websites or other businesses to compliment his financial goals. He never, in his wildest dreams, thought that the website by itself could be a very lucrative business that would quite literally change his life forever. [4:15]
  • Some of the initial changes Kurt made were around recovering from some revenue hits. He started jumping into understanding how advertising works because the website that he had purchased was quickly running out of any form of ongoing revenue. [6:29]
  • Kurt took us on a bit of the journey on how he got from where he was back in 2018 to where he is right now. That journey actually first started with shrinking the team. It was in July or August that he had to let a writer go. Then, come September, he had a writer who decided to resign. So, he made his first hire with the website on October 1st of 2018. [9:39]
  • The following summer, that first hire became an editor and started coaching other people that they were hiring. And it just kind of grew from there to where it’s almost as if the more content they create, the better received they are by the Google and Facebook algorithms. [10:53]

“As long as the content is readable and enjoyable, the algorithms are really rewarding additional content.” — Kurt Schmidt

  • In the early days, the commission structure at Inside the Magic was pretty brutal. It was purely based on page views. And if an article didn’t get many page views, it was literally possible for a writer to get paid less than a dollar an article. Kurt quickly realized that was not sustainable. So over time, they introduced a base pay formula and then there’s additional pay for page views. And as they’re evolving the pay structure, there’s going to be additional pay for engagement within articles. [12:01]
  • Today’s pay structure for a writer, depending on if they’re entry level or a more experienced writer, is going to start at $20 to $30 per article. And for an introductory-level writer, if they can achieve 60% of what their average page view is in terms of an article, they’ll get an extra $5 per article. And then there’s bonus opportunities that go up from there. So they’re really incentivized, not that they even have to do as good as average, but they have to get close to average. [12:45]

“It’s one thing to produce a piece of content, but if no one reads it, it’s a little bit of an empty feeling.” — Kurt Schmidt

  • At Inside The Magic, they pay their writers every two weeks. Every two weeks they go through this payroll cycle and they do the calculation. They’ve created some spreadsheets so that a writer can just start plugging in a couple of key numbers and it spits out the amount of pay that they are able to invoice. [16:02]
  • One of the early things that Kurt did was implement MarketMuse into their writing process. MarketMuse creates content briefs and provides suggestions in real-time on topics that you should cover in content. [16:55]
  • Kurt also shares how they plan their content. They give their writers an outline of the things that they would cover. The writer takes this general outline and then they’re looking for content that would be successful. And once they find the content, they go ahead. They don’t ask permission. So they write the content, they run it through MarketMuse, and then they publish it. [18:53]
  • Kurt and his wife own the company jointly. Kurt is the CEO and his wife is the CFO. Their primary business is Inside The Magic, but they also have five other Disney websites. [22:59]
  • One of Kurt’s next priorities is getting more of an operations side for back-office operations. So they need an operations manager. They need someone to help with monetization and they want people more heavily involved in social media. [25:06]
  • Kurt wants to hire a Chief Operations Officer and take himself out of the business. He also wants to hire a CFO, take his wife out of the business and the bookkeepers and the accounting team, just as they expand. [25:47]
  • One of the things that’s changed at Inside The Magic is when Kurt bought the business, the Facebook algorithm was really going through a lot of changes and it was harder for content to be noticed. [26:45]
  • The top two places that Kurt’s looking at to give them an indication of whether or not things are good or bad are Chartbeat and Google Analytics. [28:29]
  • At Inside The Magic, one way they motivate their team is setting up competitions. Part one of this is still tied to the financial side, but they have every pay period, for their top writers, a competition for who had the best payroll cycle. [32:00]
  • Coming from a finance and Credit Union background, Kurt probably should have a much more robust way of calculating ROI, but there is a certain amount of margins in online publishing that tend to work out really well once you cover your fixed costs. [33:50]

“As we get volume up, we know our return on our investment just goes higher and higher.” — Kurt Schmidt

  • One of the things they do to make sure there’s a safe margin in terms of how much they incentivize the writers is, there are pay caps. And the pay cap really depends on the level of responsibility. [35:25]

“As you grow and scale, I found that surprise expenses come into play.” — Kurt Schmidt

  • Two and a half years back, they moved to AdThrive and that’s the ad network they’re with today. But the next phase for Inside The Magic and the business overall is really having diversified revenue sources. So now they’re looking at ways that they can add more affiliate revenue. [38:18]
  • The best advice Kurt has ever received is either know your numbers or just be true to yourself as a manager. [42:25]
  • Kurt’s personal habits that has contributed most to his success is the way he sinks himself into the numbers and looking at what’s working or what’s not working. [42:42]
  • Kurt’s recommended book is “First, Break All the Rules“. [43:38]

Meet Our Guest

Kurt Schmidt is the Owner of Inside the Magic, an online media company covering theme parks, movies and more. He comes from the finance industry and served as CEO in various credit unions throughout his career. He has considerable experience both as an entrepreneur and Credit Union leader. His leadership style and results have been documented in the CreditUnion.com article and NAFCU webinar.

Kurt excels at growing businesses, business model assessment, managing change, and achieving organizational excellence.

photo of kurt schmidt

“Having diversified revenue sources, whether we’re talking about an online media company or really any business, is hugely important.” — Kurt Schmidt

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Read the Transcript:

We’re trying out transcribing our podcasts using a software program. Please forgive any typos as the bot isn’t correct 100% of the time.

Ben Aston

Welcome to the Indie Media Club podcast. I’m Ben Aston, founder of the Indie Media Club. We’re on a mission to help independent, bootstrapped media entrepreneurs succeed, to help people who create, promote, and monetize through content — do it better. Check out indiemedia.club to find out more.

So today I’m joined by Kurt Schmidt and he’s a Credit Union CEO turned media CEO. He acquired the site Inside The Magic four years ago, that was back in 2018 when it was doing a measly 50 million page views a year. Now that is a ton more than any site I own, but now it’s the largest community of Disney fans in the world.

They have got millions and millions of visitors and subscribers. In fact, just last month they got 42 million views. This thing is just massive, it’s huge. So, keep listening to today’s podcast to learn how to build the world’s largest theme park fansite. 

Hey Kurt, thanks so much for joining us today. 

Kurt Schmidt

Hi Ben! Thank you so much for inviting me. 

Ben Aston

Well, I want to start really by going back to the beginning and kind of where I alluded to the, in the intro. How does a Credit Union CEO become a media company CEO? Well, what took you into publishing? What was the Genesis of that?

Kurt Schmidt

That really started with what I felt like I was unfulfilling as a Credit Union CEO.

I reported to a board of directors. Yes, I ran the Credit Union, but ultimately, it was someone else making the final decisions. And I knew what entrepreneurs who have, you know, where they’re truly own boss what their lifestyle was like, and I wanted to own my own business. 

So, I set out to purchase a business. When I found out I could potentially purchase a Disney fan site, I immediately fell in love and just said, I had to do this. My wife and I, and my whole family, we were Disney fans leading into this. So it was an opportunity to marry kind of these two passions, Disney with actually owning a business.

Ben Aston

When you think about the business that you acquired it’s a website, it’s a publication. But can you explain how you make money? Well, what is the actual business that you bought? 

Kurt Schmidt

So, a majority of the revenue comes from display ads. Actually, when I bought the site, over 50% was coming from the YouTube channel. Today, very little is coming from the YouTube channel. It’s almost all from the website itself. But yeah, if someone comes to the website, someone watches a YouTube video and the ad is displayed and we make you know, roughly a penny at a time. So, you know, those pennies add up. 

Ben Aston

Right. And so, when you, I mean, you knew you were buying your business, but in terms of the content creation side of it, had you got any experience of creating and publishing content or videos before? Or was this just something you feel, Hey, well, it’s a business. I can run it. 

Kurt Schmidt

It was really the second part there. It was a business and I can run it. There was a team of five people. So I knew there was two of those individuals who were both writers and videographers. So I knew they could take care of creating the YouTube videos. 

Everyone else, everyone for the site was experienced and able to write articles. So I knew I didn’t have to actually write articles. I looked at the staff and there were some people who I felt like could manage things. So ultimately it looked like a business I could run.

And I knew a little bit about Disney as a fan, but as a writer, as a YouTuber, forget it. That was not my skillset, whatsoever. 

Ben Aston

Cool. So, you acquired the business and when you acquired it, were you thinking, Hey, this cash flows nicely and I can, you know, I can just let it grow a little bit? Or did you have grand plans which you kind of factored into the purchase price that you paid for it?

Kurt Schmidt

So my grand plans were thinking that there was a cap on how big this site could become and I’d eventually have to buy websites or other businesses to kind of compliment my financial goals and this was a good place to start. I never, in my wildest dreams, thought that this website by itself could be a very lucrative business that you know, would quite literally change my life forever.

Yeah, so it, it, nothing about my plans going in, you know, really played out. I thought this was going to be a good you know, cornerstone to multiple business, you know, collection. 

Ben Aston

And so on day one then when you got the keys to the house what did you do? You’ve got a website, you’ve got a team of five people what did you do on, what did you do on day one to begin the transformation that has happened in the past four years? 

Kurt Schmidt

You know, a lot of it was just watching whether it be Google Analytics or the we did a lot of our discussion through Facebook messenger and just kind of the discussion amongst writers and everything.

The outgoing owner had written a goodbye letter basically to the audience. And so there’s a lot of conversation around who was commenting on that article, things of that nature. It was interesting to see, you know, various competitors and other people, you know, wish them well. 

So really my first day was, was, you know, following the chat, engaging with, you know, writers, you know, from time to time on different topics, but really just kind of taking it all in and thinking I was really lucky that this business seemed to be operating okay itself.

Yeah, first couple of days were pretty easy. I just was watching everyone else work. 

Ben Aston

Right. And so, was some of the first things you actually changed to that when you began to understand the mechanics of what was happening, the content that you have publishing, the way it was being monetized.

What were some of the first changes you did?

Kurt Schmidt

So, some of the initial changes I did were around recovering from some revenue hits. So the ad company that I was working with, DEFY Media, they went belly up. I never saw my first two months worth of ad revenue for the website. 

I had three direct advertisers on the website that within the first month of ownership, they had indicated that they were going to end their direct advertising relationship. So, I just started jumping into understanding how advertising worked, because this website that I had purchased was quickly running out of any form of ongoing revenue.

I wasn’t able to collect the revenue that I thought was coming with the website. So it was very back-office kind of things. And then I was responding to staff you know, one of the big things that one staff member, in particular, wanted to do is he wanted to restart the podcast. So there was a history with Inside The Magic as a podcast, and he wanted to restart it.

And so I was, you know, answering questions like that, reviewing it. Ultimately, we didn’t decide to restart the podcast, but it was responding to questions or figuring out ad ops. 

Ben Aston

Right. And so you were focused on generating some cash again, which seems like a pretty bad start to things. And what did you, what were you able to do then?

How were you able to begin, we’ll turn around that monetization challenge? 

Kurt Schmidt

So initially just because it was the fastest thing I knew how to do, I moved us over to Google AdSense. And it was quickly evident, with Google AdSense, we were making less than I was spending each month. So, you know, the process kept going and I believe I became live with Ezoic by September of that first year. I’d bought the business February 27.

So basically, end of or beginning of March is when I had started this journey. And so by September we were live with Ezoic. We had a better ad partner. Ultimately, I later switched that partners, but yeah, it was just that journey for call it six months or so, trying to figure out who actually could help me with ads that would monetize at a level that I could pay my bills.

Ben Aston

Yeah. And so, you kind of righted the ship into the revenue we’ll be getting to balance the books and in terms of then the content creation, take us on that journey. So from four years ago to now, you’ve, you know, you’ve massively increased your content creation your traffic. 

Arguably, it’s the world’s largest theme park fan site. So how do you, how did you make that happen? Did you grow the team, increase the content? What were the steps? How did you get from where you were back in 2018 to where you are here? Take us on a bit of that journey. 

Kurt Schmidt

Yeah. So, that journey actually first started with shrinking the team.

I believe it was in July or August, I had to let a writer go. Then come September, I had a writer who decided to resign. He wanted to take another opportunity and for paying the bills, that was great. But as far as, you know, content creation, that, that wasn’t so good. 

So, I made my first hire with the website on October 1st of 2018. And really just as a way of protecting myself, I put in a very strong commission plan and really, I gave this first hire an opportunity that if I did well, she was going to do well. If this didn’t work out, then, you know, she had other jobs and other ways of making income. You know, she kind of understood, she liked the opportunity and it was hopefully gonna work out well.

What I found in that process with just how much that really engaged writers to become content creators that were looking out for the commercial success. So by the following summer, that first hire became an editor and started coaching other people that we were hiring. 

And, you know, it just kind of grew from there to where what we have now gotten to the point is, it’s almost as if the more content we create, the better received we are by the Google algorithms, the Facebook algorithms. As long as that content is readable and enjoyable, the algorithms are really rewarding additional content.

So that’s why we’ve continued to scale our content, scale the team. But it was really about finding a way that from a staffing perspective, I could reward writers so they can have a level of success that matched the level of success that the business was having.

So it, it made them very invested in what we were trying to accomplish. 

Ben Aston

Can you share a bit about how that commission structure works? How does, how do the writers benefit from the success of the website?

Kurt Schmidt

So in the early days, the commission structure was pretty brutal. It was purely based on page views. And if an article didn’t get many page views, it was literally possible for a writer to get paid less than a dollar an article. 

I quickly realized that is not sustainable. No writer who is any good is going to want to continue writing in that kind of environment. So over time we introduced a base pay formula and then there’s additional pay for page views.

And as we’re evolving the pay structure, there’s going to be additional pay for engagement within articles. There’s different ways that you can add to the pay structure. But today’s pay structure for a writer, depending on if they’re entry-level or a more experienced writer, it’s going to start at $20 to $30 per article. 

Then, once before an, and for an introductory, our writer, if they can achieve 60% of what our average page view is in terms of an article, they’ll get an extra $5 per article. And then there’s bonus opportunities that go up from there. So they’re really incentivized, not that they even have to do as good as average, but they have to get close to average. 

More experienced writers start at a higher rate of pay, but then their bonuses don’t kick in until they do better than average. And over time, it really helps incentivize writers to figure out what’s good content, what’s not so good content from the perspective of what actually gets read. 

You know, it’s one thing to produce a piece of content and, you know, pat yourself on the back, that was a great article. But if no one reads it you know, it’s a little bit of an empty feeling.

So, you know, that’s how it’s evolved today. And then we have, you know, kickers in there if there’s high engagement. We have some way to track, you know, the actual scroll depth on a page, things like that. And if you know, people are engaging and reading that content, a writer gets paid more and more.

So, you know, we try to incentivize what we want, which is readers reading our content. 

Ben Aston

That’s really interesting. And so this kind of gamification of content creation, which is kind of what you’ve created here it’s like, I mean, it sounds super interesting. How do you track all those metrics across all the thousands of articles, across the many writers, across there’s different engagement points? That, that in and of itself must be a enormous headache. 

Kurt Schmidt

Well, over time we found a way to make it easy. 

So if you go to our website today, pull up basically any article on Inside The Magic. And unless I wrote it, it’s going to have a code on the URL. So you may see at the end of the article, ad1 or rwb1 or something of that nature, that actually is a code that ties to the writer. And so at the end of the pay cycle, we go into Google Analytics and we look at page views tied to that URL based on the code. 

Then we add other little things within the code, if there’s other kinds of things we want to incentivize, things of that nature. But we basically divide our content based on these codes that we’re adding into the URL structure. And then it’s just a matter of counting up articles, which you can do in WordPress by author and it’s finding an average relative to how many page views they, that writer has received.

And if they’ve written some evergreen content that is still getting page views months or years after they initially wrote it, those page fees go into that writers comp structure for that pay period.

Ben Aston

So you did that on a monthly basis or a quarterly basis? How often does that happen?

Kurt Schmidt

We pay our writers every two weeks. So yeah, every two weeks we go through this payroll cycle and we do the calculation. We’ve created some spreadsheets so that a writer can just start plugging in a couple of key numbers and it spits out the amount of pay that they are able to invoice us for. 

Ben Aston

Cool stuff. So the writers are incentivized to write interesting, engaging content that gets lots of views. What else is working for you in terms of building out your content team increasing your engagement growing, I mean growing that SERP footprint, which you must have done in order to getting all these millions of views. 

Apart from incentivizing the writers and creating great content, what else do you think you did that’s worked?

Kurt Schmidt

One of the early things that I did is we implemented MarketMuse into our writing process. So for those of you who are not familiar with what MarketMuse does, they create content briefs and provide suggestions in real-time on topics that you should cover in content.

And it created, you know, seemingly little things, like I remember that first writer that I told you about that I hired. Her initial writing before utilizing these content briefs, she would include a lot of you know, extra verbiage around, you know, we’re really excited about this ride or, you know, this seems interesting or something, you know, talking about the fun aspect. 

But then after looking at the topics suggestions that were created, we started seeing patterns in how you could start writing about, or, you know, adding some information about other rides or other related topics. And it really changed the way our content was produced. And really that became a massive change from being a largely Facebook, social media-oriented way of getting traffic to getting a lot of traffic from Google discover today. 

Google traffic in general is easily our top traffic source where that was anything but the case for the early years when I, after I bought the website. So yeah, MarketMuse was a huge piece of that process. 

Ben Aston

I mean, let’s dive into content creation process a bit, ’cause, ’cause I’m interested in how you organize your team and I mean, you talked about moving or shifting from, or into more kind of SEO-oriented content. So, yeah, how do you plan your content? How do you structure it and brief out to your content team what they should be writing about? How does that work? 

Kurt Schmidt

So really, I don’t plan much. It would be fair to say that maybe one of my skillsets is I manage chaos well, or I enter chaos well because we give our writers a outline of the kind of things that we would cover. We’re a Disney website. So if you can make a Disney tie to the content, that makes sense. 

But if there’s absolutely no Disney tie, then it becomes a little bit more questionable, whether that’s something we should write. You know, maybe it’s another theme park like Universal Studios. Yes, we’ll cover that as well. But the writer takes this general outline and then they’re looking for content that would be successful. And once they find the content they go ahead. They don’t ask permission.

They just share with the group, this is what I found and I’m going to cover it. So they write the content, they run it through MarketMuse, ’cause that’s something we have required every writer to do. And then they publish it. I think in the four years I’ve had the site, there’s probably been a, probably two articles that I ever put a stop on before it got published.

And on both of those, I still pay the writer for creating on them. I just didn’t think they reflected correctly on the site. There’s also been a handful of articles that after they’ve written that we’ve went ahead and taken down from the site, but by and large other than a few rare reactions to content that went out that you know, we didn’t feel like it, it should have been out there.

If a writer comes up with an idea, they publish it. So, you know, there’s very little oversight. We just set the rules and the boundaries for what is acceptable content for the website.

Ben Aston

And so your editorial process is really quite lean then. So, writers can write what they want to write about, publish it. And it’s just quick and simple that is there isn’t a review process?

Kurt Schmidt

The review process, it depends on when the content goes out. So I have writers around the world, mostly they’re US-based, but I have writers around the world. And say, news breaks at Disneyland Paris. That’s probably happening before that may happen before a writer, an editor in the US is awake.

So, all writers are trained on how to self-edit. And if it is a breaking news story and there’s not an editor around, then they will go ahead and edit the content. We provide them a premium version of Grammarly so that, you know, we can make sure things like spelling and some grammatical issues are taken care of, but they will go ahead and publish without an additional reviewer.

But if we’re talking Monday through Friday, regular business hours, when there’s plenty of other editors around, then the writers actually assigned a more senior editor who will review that content before it gets published. So there is a second set of eyes. I would say probably 90% of the content we publish is going to have a second set of eyes, but we do have a process when something comes up and it’s just not convenient for someone else to be on. 

That they will go ahead and have the ability to publish and share that content on social media things of that nature, so we can get that out. And it allows a writer to actually, you know, decide to write, you know, take the recent Super Bowl as an example.

If, you know, a new trailer for a movie came out and a writer wants to cover that, and everyone else is watching the Super Bowl, well they would have the ability to self-edit that content and get it published and share while it’s still relevant. 

Ben Aston

Nice. And so, I mean, let’s kind dig it to the team. So how does, how is the team structured? As I understand it, you’ve got a team of writers, some more senior writers, some editors and you’re at the top there somewhere. Who am I missing? 

Kurt Schmidt

Yeah. So, so my wife and I owned this company jointly. Think of me as a CEO or the Chief Operations Officer. Think of her as the CFO. And then really our business, the primary business is Inside The Magic, but we have five other Disney websites. 

They each go by different names, but this is an official, we call them The Fab Five. So The Fab Five has a manager. And then Inside The Magic, once we fill the role, we’ll have a manager. Then reporting to each of those managers is a group of editors, because we’re a Disney website and it’s just kind of fun. On the Inside The Magic side, we call those editors Jedi.

So they both edit content, they coach writers, but they also write their own content. And then reporting to the Jedi or the editors are junior writers or Padawans if we’re on the Inside The Magic side. So we, you know, really lean into the Star Wars terminology and those writers, again, they’re relatively newer to the website.

And so what they’re writing is being done under the supervision of an editor, who’s also a writer and that’s the core content creation team. We have two full-time people on the YouTube side of things. We have two virtual assistants and that’s basically it. We work with other companies like NerdPress for IT support you know, things of that nature.

We have our ad management team with that drive you know, MarketMuse for SEO. But as far as the core staff, it’s roughly that total that’s in the low thirties, but that’s low thirties with an intent to expand that by another 15 people here in the next six months. So, you know, like I say, we’re growing rapidly. 

Ben Aston

And so those next 15 people, and as you build out the team, who’s coming next?

Kurt Schmidt

So, we are, one of the next priorities is getting more of a operations side for back-office operations. So I need an operations manager. I need someone to help with monetization. We want people more heavily involved in social media. 

We also are going to have a team that is more heavily involved in editing for more technical issues, not for accuracy of the content or things of that nature, to take some of that load off of our editors that are really going to concentrate one on an accuracy side of things.

And then ultimately, it’s going to even flow all the way up to, I have in my plans, I want to hire a Chief Operations Officer and take me out of the business. And I want to hire a CFO, take my wife out of the business and, you know, the bookkeepers and the accounting team, you know, just as we expand. I think it’s become evident that my role has I’ve kind of become the bottleneck in the organization because we have so much going on.

I just can’t, you know, handle all the different things that are coming and decisions are starting to be made more and more slowly. So, you know, it’s either going to supplement or add to roles that we just are recognizing we need as we grow.

Ben Aston

And in the past four years as the business has grown, as the, your page views have increased, revenues increase, what have you seen that’s changed?

Kurt Schmidt

Oh gosh. Change is such a big part of what we do. I feel like our business model changes every six months, if not more frequently. So one of the things that’s changed is, when I bought the business, the Facebook algorithm was really going through a lot of changes and it was harder for content to be noticed. 

Then, there was a timeframe where that seemed to kind of stabilize or reverse a little bit. And we actually were seeing a lot more Facebook traffic. Now we’re through another change and it seems to be changing again, but it’s not changing in and falling in the way it was falling previously. Then you look at what’s happening with Google and you know, how they are looking at content.

You know, maybe I just simply wasn’t aware, but I don’t think Google discover was getting nearly the kind of traffic volume four years ago on an aggregate level that it’s getting today. I mean, it’s unreal how that changed. AMP is no longer as big of a thing for publishers to be considering. 

You know, so there’s a lot of these just kinds of technical changes in how do you get content discovered. That’s really the big part of the change that I’m that I see day in and day out. 

Ben Aston

And so, as you’re assessing and evaluating how well the business is doing what are the key metrics? What are your top three metrics that you’re looking at to give you an indication of whether or not things are good or bad?

Kurt Schmidt

Hands down the number one metric is page views. There’s a lot of problems with page views, but it just makes it really simple to collectively have everyone look at that number. Number two would be engagement. We use Chartbeat, which has some ways of measuring engagement on a page that is different than what you’re going to see with Google Analytics. So we’re really looking at the engagement. 

And then the number three thing that I probably spend my most time looking at is going back to Google Analytics and looking at how traffic is coming to us from different channels. So as we’re doing this recording, Facebook this morning was extremely low. And one of the first times I think I’ve ever seen this, we were getting almost as much page views from our email newsletter than we were from Facebook.

That is just shocking, but we’re actually having a good day for traffic because Google discover and Google search traffic is just through the roof. So, you I’m just really trying to pay attention to those trends that seem to, you know, almost change hour by hour, day by day, so that we can see if, you know, maybe we’re missing the mark on how we’re promoting things to Facebook and we can make some subtle shifts and changes.

Ben Aston

Yeah. I mean, you, obviously you’ve done a lot of things well, and things of, you know, I’ve grown really well, but can you share some things you’ve done wrong? Like in the past four years, what would you say your biggest screw was and what did you learn from that?

Kurt Schmidt

Well, my very first mess up was just going through the process of purchasing this business.

I went through due diligence thought we had everything settled by the first week of January and I just stopped paying attention to what was happening. And we didn’t close on the business till February 27th due to some issues with the SBA loan. And during that time, the business was taking massive hits from, on the Facebook front in terms of traffic.

So the business I closed on wasn’t nearly the business that I thought I was getting initially. And then thinking of, you know, more recent things that I’ve experienced as we’ve been going through you know, this growth process. You know, it’s things like you know, staffing, you know, sometimes we hit a home run with staffing.

Other times, you know, what happens with staffing? It just doesn’t you know, work out and it’s not even sometimes like, oh, we hired the wrong person. It has, you know, sometimes to do with, you know, how we’ve communicated things to staff. And, you know, I go back and I look at those conversations after the fact, and I realize, whoops, we really stuck our foot in our mouth on that one.

Like, we shouldn’t have said whatever that thing was because it caused people to react in a different way than what we were wanting. So, you know, I kind of go with this mindset that I’m always one conversation away from, you know, messing up things from a staffing front. So I just really try to be careful with, you know, what I’m saying and, you know, keep the team motivated and aligned the best I know how to do.

Ben Aston

Oh, well, you talked about motivating people in terms of financially incentivizing them on this performance-based pay. How else, what else have you found successful in motivating the team?

Kurt Schmidt

You know, one of those is the way we set up competitions or even tracking of content. So, part one of this is you know, still tied to some, you know, the financial side, but we have every pay period for our top writers a competition for who had the best payroll cycle.

And, you know, they have a chance to, you know, win some money that way. You know, but also the way we track our numbers, anyone can look up anyone else’s numbers and just see how they’re comparing to someone else. So it really creates a lot of I think healthy competition, but what’s been unique about it is we’ve also done a lot to come to this from a place of support.

And even though I’ve heard it a lot, I still get surprised by the number of new writers who say, I never realized that I could work with a group of other writers who were so supportive. And you would think what this dose of competition will that just simply wouldn’t be possible. And I actually on that front, I owe a lot to my former editor in chief that you know, she has since left the company for another opportunity, but she was really great about encouraging that teamwork and everything.

So, you know, things of that nature, it’s, it’s just really been interesting how those sides have come together. 

Ben Aston

Yeah, I mean, let’s talk about side of the monetization and compensation and how all that equation works together because you’ll pay a lot of money to produce a lot of content. How do you calculate the ROI on the content that you create?

Kurt Schmidt

You know, coming from a finance and Credit Union background, I probably should have a lot more robust way of calculating ROI, but there is a certain amount of the margins in online publishing you know, tend to work out really well once you cover your fixed costs. Sure, we’re adding new fixed costs every month, every year in terms of, you know, things that we have, but the actual content creation itself, you know, I’m looking at today based on our volumes.

We can basically pay something to the rough level of $5 per every thousand page views. So for those of you who are now online publishing you know, total revenue can vary based on your page views, but for the most part, you know, other than maybe if you’re with Google AdSense and, you know, have a lot of traffic outside of the US.

You’re going to be able to generate RPM, so are well in excess of that amount. And so as we get volume up, we know our return on our investment just goes higher and higher. 

Ben Aston

And so that that equation in terms of, you know, how much you incentivize the writers you just make sure there’s a safe margin in there? Or have you been more calculated about that?

Kurt Schmidt

Yeah. So, so one of the things we do in that regard is, there are pay caps. And the pay cap really depends on the level of responsibility. So for example, a senior writer who has up to five other writers reporting to them, they’ll have a pay cap that is twice what someone who maybe doesn’t have you know, those writers reporting to them, know, have.

But, you know, we put some pay caps in place, because, you know, sometimes an article really, even by our standards goes really viral. And if you just looked at the pure way we were calculating things, it would result in, you know, 10, $20,000 for a payroll cycle, which is I think most people would agree pretty lucrative over the course of, you know, two weeks.

And so, you know, depending on where that writer comes in, maybe their pay cap is $4,000, something like that, over a two week payroll cycle. And one of the things that also helps us not just, you know, as an owner allowing me to collect you know, more money, but as you grow and scale, I found that surprise expenses come into play.

So, something like Google Analytics, for instance, that’s free for most websites. If you actually look closely at how the Google Analytics terms of services, they reserve the right to not have it free once you go over 10 million hits per month. While we easily go over 10 million hits a month, their paid version of Google Analytics is $150,000 a year. That’s a big jump from free. 

So, you know, we’ve just learned over time, as we’re scaling, that you need those pay caps in place, but as far as on, you know, once someone’s say, below that pay cap you know, there, there is distinctly a chance that we’re going to have negative ROI on certain content. That’s just the nature of having a $20 to $30 base pay on an article.

Some articles will literally earn us a dollar. And I basically look at it. That’s the cost of doing business. You know, it, it works out you know, in the long run. 

Ben Aston

I think one of the things that you talked about early on was the fact that you inherited some direct relationships with regards to monetization and then you moved through different ad networks. You talked about Ezoic, well, AdSense. 

How have you tried to stack monetization a tool or are you just kind of happy with the ad networks doing their thing and it being very low-touch?

Kurt Schmidt

So until recently, I was largely happy with the ad networks doing their thing.

So about three years back, two and a half years back, we moved to AdThrive and that’s the ad network we’re with today and they’ve done great for us. But as I look at, you know, the next phase for Inside The Magic and the business overall, really having diversified revenue sources, just whether we’re talking an online media company or really any business, is hugely important.

So now we’re looking at ways that we can add more affiliate revenue. Well, from a percentage standpoint, this was less than 1% of our overall revenue back in November. November was extremely exciting as we actually saw our affiliate income, you know, grow into a noticeable amount of revenue. Something that, you know, had this been four years ago, would’ve, you know, allowed it to be my biggest revenue source.

So affiliates become important. We are looking at direct advertising relationships, and that actually goes into the hiring plans that we have with this monetization manager. We’ll be working with direct advertisers and diversifying the revenue mix in that way. Then there’s you know, things, you it’s money we can make as an influencer, you know, how do we use our Instagram account you know, to work with brands and everything.

So definitely we’re trying to stack more and more of those together. I guess our YouTube channel is even another one, but you know, we’ve, we frankly gotten a late start to the game. So right now we are very much in the programmatic ads space as a majority of our revenue, but it’s a focus and I would encourage anyone in this field, especially if you start seeing you know, yourself grow, go ahead and start thinking about diversifying your revenue early.

Trust me, that is something I so wish I had paid attention to earlier on. 

Ben Aston

Yeah, definitely. I mean, what else is top for you? What are some of the, what are some of the biggest challenges or the things that keep you awake at night? 

Kurt Schmidt

I think what keeps me awake at night the most is just the fact that there’s so much going on and I wake up remembering something that I didn’t do.

You know, that’s, you know, really that challenge is about pace of growth. You know, we have a large team, but we have much too small of a team for the amount of business that we’re doing. And it seems crazy, you know, in January I hired a bunch of people and we still have too small of a team. And I’m sure by the time we get into the, you know, staff count and 40 some, you know, people, we still have too small of a team unless, you know, growth slows down.

And at the end of the day, I don’t want growth to slow down. So, you know, you just keep trying to, you know, add people, you know, fast enough. And then as you add people, it changes your culture. You know, the culture of a company that was one or two people is vastly different than the culture of a company that’s 30 people, and it’s going to be vastly different again when it’s 50 or a hundred people. 

So, those are really the things that keep me up, I is thinking about how do I delegate the next thing that I’ve held on to? How do I make sure I’m responding to all the different needs that come up and you know, how do we keep culture in place as we do expand?

Ben Aston

Yeah. All good challenges. 

So, let’s finish with a lightning round, and yeah, I just want to know, firstly, what’s the best advice you think you’ve ever received?

Kurt Schmidt

You know, really two things. It’s either know your numbers or just be true to yourself as a manager. So I think both of those have been huge in life.

Ben Aston

And which of your personal habits do you think has contributed most to your success?

Kurt Schmidt

I think it’s the way I sink myself into the numbers and I’m looking at what’s working, what’s not working. Google Analytics has a wealth of data and if you can just learn how to pull that data out of Google Analytics, you’ll know so much more about your audience than you ever imagined. 

Ben Aston

Now you mentioned a couple of tools in our conversation today, but can you share a resource or a tool that you personally use regularly? 

Kurt Schmidt

A tool that I personally use regularly? You know, it’s going to sound a little bit odd, but I’m going to say LinkedIn, just simply because finding connections. You know, there’s so much out there that I don’t know and LinkedIn is great for building connections. 

Ben Aston: And what book would you recommend and why?

Kurt Schmidt

The book that I liked the most and it’s, it’s an old book, it’s called “First, Break All the Rules”. You know, there’s so much advice out there in business about, you know, the standard rules of doing things.

And if you learn how to think outside the box, you know, I think it’s an incredibly freeing thing. So, yeah. First, Break All the Rules. I think it’s Marcus Buckingham if I’m not mistaken. 

Ben Aston

And for someone at the start of their digital media journey like you were four years ago what’s one piece of advice that you would give them?

Kurt Schmidt

Get started. Don’t put this off, you know, just jump right in ’cause you’re going to learn so much, you know, during the journey. And don’t worry if you don’t have it all figured out quite yet. 

Ben Aston

Awesome. Well, Kurt, where can people find out more about what you’re up to and get connected with you?

Kurt Schmidt

Yeah, well check us out at insidethemagic.net or insidethemagic.com.

And also please reach out to me on LinkedIn. It’s Kurt Schmidt, you’ll find me on LinkedIn with under Inside The Magic as my employer and, you know, I’d love to get connected and, you know, maybe learn out you know, learn a little bit more about you. 

Ben Aston

Awesome. Well, thank you so much for joining us today. It’s been great having you with us. 

Kurt Schmidt

Thank you so much. I’ve really enjoyed it. 

Ben Aston

Well, if you like what you heard today, please subscribe and stay in touch on indiemedia.club. And please leave us a review on iTunes too, but until next time. Thanks so much for listening.

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