Given the publishing industry’s recent struggles, a media company producing a Broadway musical in 2019 would seem to be a red flag; a sign of shiny new toy syndrome and good fodder for a reporter that’ll end up writing the company’s eventual obituary.
But the media company in question, Gallery Media Group, is not strictly a media company nor does it appear to be struggling. Gallery’s PureWow worked with Olay for the one-night Broadway show in April, an extension of its branded content business following a successful YouTube video that PureWow produced for the brand last year.
Formed after agency vet and entrepreneur Gary Vaynerchuk acquired women’s lifestyle publication PureWow in January 2017, Gallery Media Group says it has been profitable since 2011 when it was only PureWow. The company has stayed in the black following the acquisition. And after generating $20 million in revenue in the year before the acquisition, its revenue has grown by 35% year over year for each of the past two years to reach about $36.5 million in revenue for 2018. The company expects revenue for 2019 to be in the mid-eight figures, according to Ryan Harwood, CEO of Gallery Media Group. Gallery Media Group has 140 employees.
“Gallery Media Group, as a standalone [company], is a very stable business, and it always has been. And if venture capital dried up or the market took a turn for the worse, I truly feel we’d be able to weather that storm,” said Harwood.
Gallery Media Group’s prospects may be helped by the fact that, as much as it has many of the hallmarks of a media company, it also has the markings of a creative agency. While that’s yet another industry under siege — and a designation that does not sit well with other agencies — Gallery Media Group’s financial performance suggests it has been able to strike a balance between the two. A hybrid between a publisher and a creative agency, “that’s really what we always were. We just accelerated that even faster because of the resources at our fingertips being part of the VaynerX organization,” said Harwood, referring to Vaynerchuk’s holding company that is also home to agency VaynerMedia.
Gallery Media Group’s close corporate ties to VaynerMedia may raise conflict-of-interest concerns that the agency could put a finger on the scale and allocate a disproportionate amount of its clients’ ad dollars to the media company. However, that does not appear to have been an issue to date. VaynerMedia has not spent any money with Gallery Media Group, and the agency does not buy publishers’ inventory directly, according to Harwood. “Eventually we may start selling to them as other publishers try to do and see if there are opportunities, but for now this has not been an area of focus,” he said.
Since the acquisition, Gallery Media Group has expanded beyond PureWow, which attracted 9.5 million unique visitors in the U.S. in March 2019, up from 8.1 million unique visitors in March 2018, according to Comscore. In June 2018, the company launched men’s lifestyle publication One37pm, which attracted 536,000 unique visitors in the U.S. in March 2019, the first month that the site met Comscore’s measurement threshold.
Gallery Media Group also produces a series of podcasts under the Gallery Podcast Company umbrella, including “The CMO Podcast with Jim Stengel” that will debut on May 1. Additionally, it manages 20 Instagram accounts, several of which are Instagram-only entities such as @blinkbeauty and @shows. And then it operates two influencer networks that are connected to its two publications.
On top of these existing businesses, Gallery Media Group is starting to dip a toe into the traditional entertainment market. The company is developing what Harwood described as a “long-form video series” that it hopes to sell to a TV network or streaming video service.
Such diversification is almost a prerequisite for any media company to survive, let alone thrive, in today’s climate. However, there can be a fine line between diversifying into new markets and chasing after shiny objects. As such, Gallery Media Group has concentrated its expansion on areas, such as podcasts and influencer marketing, where it can extend its branded content business, which accounts for the majority of the company’s revenue, according to Harwood.
Gallery Media Group does still operate a display advertising business. However, that’s more of a passive revenue stream, as evidenced by the company’s move in mid-April to start selling banners on PureWow’s site programmatically through private marketplaces. The company is not pivoting to programmatic or hiring a programmatic sales team, said Harwood. “We’re not primarily selling media and display and banner ads, but we still have the impressions of course,” said Harwood, who added that the company is not staffing up around that programmatic advertising business.
Editors at PureWow are expected to not only write articles for the site but also to produce posts for Facebook, stories for Instagram, contribute to its email newsletter “and also you should definitely be looking at TikTok at the same time,” said Mary Kate McGrath, chief content officer at Gallery Media Group. Additionally, the company’s five-person audio team is charged with managing all aspects of its podcasts, from scheduling talent, producing the episodes and handling distribution, she said.
Gallery Media Group also takes advantage of being part of VaynerX by recruiting VaynerMedia’s employees to freelance for the media company in their off-hours, though only to work on editorial content. “It’s like an Etsy for talent,” McGrath said.
While Gallery Media Group does not enlist VaynerMedia employees to work on branded content campaigns, having them contribute to social posts can help to catch potential clients’ eyes and be a competitive advantage in a difficult market where seemingly every media company operates an in-house creative agency, or “content studio.” To further distinguish itself from the competition, Gallery Media Group offers generous usage rights to advertisers, Harwood said. He cited the series of videos that the company produced for Olay last year that were distributed on YouTube. The beauty marketer decided that it wanted to also run the videos as commercials during last year’s MTV Video Music Awards. Often a publisher may accede to such a request but ask for extra compensation since the TV distribution would fall outside of the original agreement. “We didn’t charge them a dime,” said Harwood.
However, Gallery Media Group is not only competing with other publishers’ in-house agencies but also actual agencies. That dynamic is not uncommon for any publisher that operates a branded content studio. But in Gallery Media Group’s case, the competitive concern is amplified by Gallery Media Group’s proximity to VaynerMedia.
“Ultimately when you blur that agency-to-publisher line, sometimes agencies can be a little wary of working with you,” said Noah Mallin, head of experience, content and sponsorships at Wavemaker, which has done some branded content work with PureWow in the past. Other agency execs contacted for this article declined to be interviewed because they see Gallery Media Group as a competitor, if only because it is owned by an agency exec.
“I think everyone is a competitor. Literally, everyone, including VaynerMedia, by the way,” said Harwood.
This article has been updated to reflect that Gallery Media Group contracts VaynerMedia employees to work only on editorial content, not branded content.