Robert Reiss: Cella, you are CEO of About Group, which is of course known for About.com. Talk about what the business is and the brand is to you.
CELLA IRVINE: The About Group does include about.com but it’s actually composed of 5 advertising-supported businesses. All are web businesses – websites – and they all share a common mission. Our mission is to provide consumers with interesting, useful and credible information about how to navigate the hills and valleys of everyday life. About.com is focused on delivering credible content on a very broad range of topics. The about.com business model is unique in our industry among advertiser-supported content businesses. Our other businesses include: Consumer Search, which analyzes product reviews to create a best-of-breed recommendation on popular consumer goods; caloriecount.com offers weight-management tools with social support, and I think almost everyone can relate to how valuable anything is if it helps us manage our waistlines; You Compare Health provides tools that will be of increasing importance to consumers, which is help them provide the best-in-class medical professionals by specialty in their geographic area; and finally we also have a site in China. It’s called abang and it’s similar to the about.com business but is built for the Chinese market. We’re about $115 million in revenue.
Robert Reiss: And how many users?
CELLA IRVINE: We have about 41 million unique users in the US every month and about 75 million unique users worldwide.
Robert Reiss: Let’s first talk about about.com. Talk about how the whole business model works.
CELLA IRVINE: As I said before, the about.com business model is unique for a content business. Our guides are really the cornerstone of our success. The way that content is created on about.com is that each topic area – and those topic areas include guitar, pediatrics, cars, busy cooks, various condition-specific health sites, parenting; a broad range of topics that are useful, interesting and helpful to people in the course of everyday living – is created and managed by a guide. The guide is a subject-matter expert who is also an excellent writer and able to write things in an accessible fashion.
Robert Reiss: Let’s stop there and then come back. How do you find the guides, how do you evaluate them, and how do you ensure they’re on target?
CELLA IRVINE: In terms of finding guides: obviously people come to us and ask to be guides, and we have a team here that recruits to make sure that we can find the guides that we need. Becoming a guide is a rigorous process. Only 2% of people who apply ever become a guide. One of the attributes of our business model is that our guides make their money on their year-over-year growth in traffic.
Robert Reiss: On their personal growth in traffic? You’re monitoring their growth?
CELLA IRVINE: They’re monitoring their growth. They are incredibly engaged and invested in how users use their site, in what users find to be the most topical parts of their site and in making sure that they are skating towards where the user is going.
Robert Reiss: And you have about 750 guides now?
CELLA IRVINE: 800 now.
Robert Reiss: So you have set 800 people to be entrepreneurs of their own business while helping your business grow.
CELLA IRVINE: That’s right. For about 60% of our guides, being a guide is their primary occupation or their only occupation. That could be because they have been very, very successful as a guide and it could also be because they’re in a phase of life where they want to work maybe 30 hours a week and they’ll devote that much time to it. About 40% of our guides do something else that is closely related to what they write about. Our neurology guide is a chief resident in neurology at a major hospital. How he finds the time to be a chief resident in neurology and be a guide is amazing to me.
Robert Reiss: Let’s say we have about 600,000 people listening in. We have some really talented listeners. What if someone wants to become a guide? How do they do that?
CELLA IRVINE: They can write to guides at about.com.
Robert Reiss: You were talking about the model, and you talked about the $115 million. Where does that come from? How do you make that?
CELLA IRVINE: We have three sources of revenue. One of them is cost per click advertising or Google link advertising. It’s the blue underlined text-link ads off to the side of the page. We do very well in Google advertising because of the narrow path specificity of our content. Let me give an example of something that happened in my home lately. I have a pre-teen daughter and she has pre-teen acne, which is horrible.
Robert Reiss: You shouldn’t say that on the radio! If I said that about my son, he’d kill me!
CELLA IRVINE: Fortunately the chance that she’ll be listening to the CEO Show is not high. I went to about.com and on our home page, I typed in pre-teen acne because I wanted to find something that would help her. Within two clicks I landed on an article that gave very specific recommendations about what I as a parent could do to help my daughter with pre-teen acne.
Robert Reiss: I’m not going to tell anyone but I’m going to go there next.
CELLA IRVINE: It’s really cool. When you are a lean-forward user: when you are leaning forward towards your computer trying to find the answer to a problem that you need to solve in the very limited amount of time that most of us have to solve a problem.
Robert Reiss: What is the average time it takes someone to solve a problem? You would know that.
CELLA IRVINE: One of our goals is to try to get people to their answer as quickly as we can, so in a couple of pages. If you are specifically looking for an answer to a problem and there is an advertisement that addresses a solution to that problem, people tend to be very open to it. That’s one of the reasons the deep Robert Reissow-cast nature of our articles does a very nice job of matching up with advertising messages. We have another advertising-based revenue stream on about.com and that is premium display advertising. That includes things that are very recognizable to all of us who use the internet: banner ads, tower ads, video-based advertising. Advertising that has a look and feel, that is more than a text link, that creates a brand experience for an advertiser. This is a revenue stream that we have been very aggressive in pursuing, especially in a difficult economy, because this revenue stream has come under increasing competitive pressure. We also derive some revenue, especially at our consumer search / product review business, from e-commerce. Those are our three major revenue streams.
Robert Reiss: Sounds like you’ve built an effective model that is continuing to grow. What do you see the role of technology being in the fabric of the economy in the United States?
CELLA IRVINE: I think that it is the place at which the United States can achieve a competitive edge over other nations’ economies, if we continue to provide outstanding technical education – because many other countries are catching up in this area in particular – and if we continue to provide and nurture the opportunity for entrepreneurial achievement. So much technical innovation comes out of entrepreneurial companies. Our own business is a technology-driven content business. One of the reasons that we are able to grow the way we have and have the profit margins that we have – which last year were 48%, quite high – is because our business is technology driven.
DENNIS TROYANOS: Hi, Cella, how are you?
CEL LA IRVINE: I’m fine, and I think I in full confession should tell our listeners that you were, in fact, my first boss out of college. I was very privileged.
DENNIS TROYANOS: Earlier you talked about the customer experience in both the online and the offline world, and that appears to be a real focal point of marketers today. I’d like to get a sense of the customer experience that the About Group presents to its viewers.
CELLA IRVINE: I think one of the core beliefs that we have is that the amount of information that is available today is unprecedented and that it can be overwhelming. The changes in lifestyle over the past 20 years have made the absence of time a very real factor in almost everyone’s lives. Our goal is to get users the information that they need as directly as possible. We do that in a couple of ways; first and foremost is by making sure that our content is completely credible. All of our guides are carefully-vetted experts. Many of them are credentialed or published. When someone comes to about.com they can be comfortable that the information they are getting is accurate. We also design our content to be actionable. We understand that people are busy, that they are on our site most often to solve a problem or to get an answer, and we try to write everything in a way that allows someone to walk away knowing that they can do something or that they’ve made a decision or can take an action. Finally, it is media and it’s got to be interesting. Dull just doesn’t work even if it is both accurate and actionable, so we also try to make our content as interesting as possible.
NORMAN SHERMAN: I’d like to step back and ask you a bit of a theoretical question now. Any time a company like yours is successful, you start to see a variety of competition nipping at your ankles. What’s your theory about staying ahead of the competition?
CELLA IRVINE: What we have done this year – and this is partly to stay ahead of the competition and partly the result of being in a challenging economic environment – is to focus on our core strengths. Knowing that lack of focus is dangerous. We really think about three. One is creating very high-quality, very narrow-cast content specific to someone’s problem, dilemma or need for information. The second is ensuring that our content is easily findable on a search engine; making sure that if someone is going to Google to do a search that we’re going to end up prominent on that search results page. Finally, monetizing our content through more than one revenue stream. If there’s a lesson to learn in a difficult economy it’s that two or three revenue streams is better than one. Obviously you can’t focus so narrowly that you don’t innovate, and we have invested in innovation this year – we’ll probably do more of that in the next couple of years – but we have been pretty disciplined about knowing what it is that makes us successful and sticking to it.
Robert Reiss: Social media: what role is it playing and how are you planning on utilizing it?
CELLA IRVINE: It’s playing an important role as being a new source for consumers to both build relationships and get information that they need, and we have several projects right now to begin to learn more about social media and provide that sort of content, including involving our users in creating the content on our site.
DENNIS TROYANOS: I think this is a good point in the discussion to turn to the topic of innovation and leadership. Conventional wisdom has it that the bigger companies get the harder it becomes to innovate. Your organization has a culture of innovation, and I’d like to have the discussion turn to how you keep that culture of innovation vibrant at the About Group.
CELLA IRVINE: I think that there are probably two reasons that we can keep innovation vibrant at the About Group. The first is that it’s easier to encourage innovation in smaller environments, and although we’re a $115 million business, we have 190 employees. We are small enough to know one another, to build relationships with one another, and to have everyone have an opportunity to understand their own impact on the business. Nothing is more important for innovation than people feeling that if they innovate it’ll make a difference. The second is that we have a wonderful mix here of people who have been here since the company was founded and really own the culture of the company, who want to maintain the culture of the company and who work very hard to make sure that those of us – like me – who are newer understand and accept and welcome the core values of the About Group. Those longtime leaders of our company are now married with people who have come in more recently and who bring what new people always bring, which is newer ideas and different ways of looking at things and experience from other places. I think those are the two things that have really helped us.
DENNIS TROYANOS: As you know, Norm and I are in the recruiting business, and one of the key questions we always ask our clients is: who is cultivating these great innovative skills that you’re attracting to about.com and the About Group in general?
CELLA IRVINE: We look at people who bring with them some experience in technology, and we look at that for two reasons. One is that technology is the foundation of our business, and we want to make sure that everyone who comes here is comfortable with technology and in fact loves technology and the changes that technology can bring. I think a lot of folks who come out of technology companies right now have seen rapid rises; they know what it means to have to be nimble and flexible. They’re used to the sort or trajectory that companies in the technology space or the internet space in particular need to be in.
NORMAN SHERMAN: So where do you find those kinds of people today?
CELLA IRVINE: I would have told you, ten years ago or maybe fifteen years ago, that you had to go further afield from New York City – which is where we’re headquartered – to find people like that, but that’s just no longer true. New York City has had for many years now a vibrant entrepreneurial and technology community. Whether that’s other internet content companies, internet advertising agencies, the portals like Google, MSN, Yahoo, or AOL, or whether it’s small entrepreneurial ventures in technology, right now this marketplace has wonderful talent.
NORMAN SHERMAN: I believe at this point you’re the largest publisher on the internet. You were clearly one of them if not the largest. In the world in which you compete, particularly with only 190 employees on your entire staff, every single hire you make is critically important. What’s the process that you go through as an organization to determine who to hire and whether or not you have the right person?
CELLA IRVINE: I think that our process is pretty classic. We spend a fair amount of time before we bring someone in defining the role but also defining the characteristics, the competencies that someone has to have. Everyone who comes here needs to share a couple of core characteristics that everyone in our organization does value. One would be flexibility. One would be open communications so that there is candor and good sharing among the team. Passion for technology, passion for innovation, and passion for content quality are all core aspects of our culture. When we bring someone in we make sure that they meet a pretty broad group of people so that we have the opportunity to hear from multiple parts of our organization whether or not there is a positive or negative reaction to someone. We would never say “Okay, we’ve interviewed five people; let’s take the best of those five people.” We’d never do that. What we would say instead is “We’ve interviewed five people; that second person we saw is fabulous and we really want that person in our organization,” or we’d say “We’ve interviewed five people and we’re really not satisfied. We need to keep looking.” I want to say that you always want to have a preference for developing the folks that you have internally rather than going outside to hire. One of the folks here who are making a tremendous contribution to our company this year is someone who was recently promoted into a new job and is just hitting one ball out of the park after another. That’s a wonderful outcome.
NORMAN SHERMAN: When I think of – and I use this term advisedly – old world economy companies, they’re based upon a lot of conventional wisdom and company history and often will rationalize things that they’re doing going forward based upon things that have worked in the past. Here you are in a new kind of company that doesn’t have that kind of history to rationalize what it is going forward. What is it that you do and how do you evaluate when people want to try something new that you don’t have any precedent for to know whether or not it has any history of working?
CELLA IRVINE: About Group has historically been and continues to be a very metrics-driven, disciplined organization. When we are going to try something with which we have no experience it is very carefully modeled and then it is tested in a phased manner. It is not discarded, necessarily, if the tests aren’t positive. It may be manipulated, changed, altered, or optimized. One of the things that I was very impressed by when I joined the company last year was that they had a very rigorous approach to introducing new things.
DENNIS TROYANOS: Fifty years from now when someone writes the Cella Irvine story, what are we going to hear? What are they going to say?
CELLA IRVINE: I think that we believe that we have a wonderful business. We certainly believe – and I think the New York Times believes – that our business can be bigger and broader, that we have tremendous untapped potential by continuing to help consumers solve the problems of everyday living and help advertisers get relevant messages in front of those consumers. We feel that our future in the next several years is very bright.
DENNIS TROYANOS: I’ve known you long enough to know that you believe in inspiring people rather than motivating them. Can you talk a little bit about that?
CELLA IRVINE: It’s been an interesting year for inspiration because a challenging environment is frightening to people. There were times this year when inspiration really came from candor, information and confidence. As we continue through a challenging environment we will have to look at how we, as leaders, inspire without seeming to be unrealistic or insincere. I really believe that the sky is the limit for the About Group, but it’s essential that I find a way to say that that is absolutely believable in an environment where hype has proven to be just that and only that.
Robert Reiss: You certainly come across as really authentic, and I think that helps with the inspiration. The final question of the day is: what’s the next big idea for Cella Irvine and the About Group and when can we expect to hear about it?
CELLA IRVINE: I think the thing that we’re most excited about right now is bringing our users into About.com to share with us their own very legitimate and credible content. We started out doing this in the early part of the winter and we have literally tens of thousands of pieces of very high quality content from our audience on our site. About.com users are helping other users solve the problems of everyday living.