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For millions of early internet users, the brands Cracked.com, eBaum’s World, Cheezburger and Know Your Meme might conjure up a sense of nostalgia for a simpler era of the web.
But for Oren Katzeff, the chief executive of Literally Media, the company that owns the four legacy comedy brands, the titles instead evoked a sense of opportunity.
In the last two years, the company has doubled the percentage of its ad revenue—now between 13% and 15%—that comes from video.
This year, the portfolio is on pace to generate revenues in the low eight-figure range, split between on-site advertising (70%), video advertising (13%) and a mix of content syndication, commerce and events (17%), according to Katzeff.
Literally Media brings in about 65% of its ad revenue from the open exchange, but it plans to hire a direct sales team early next year. The 50-person operation, owned by 44 Ventures, is profitable.
More importantly, when Katzeff joined Literally Media last March, he saw a stable of distressed titles with strong brand equity whose essential offerings—comedy, memes and internet miscellany—he believed could translate effectively into short and long-form video.
“[Literally Media] had done a great job building audience for its owned and operated sites, but I felt like there was a real chance to expand beyond the dot-com into video,” Katzeff, a former executive at Tastemade and Condé Nast Entertainment, said.
To do so, it aims to build out its video capabilities, diversify its business beyond advertising and lay the groundwork for the company to become the Comedy Central of connected television.
Pivoting to video
Between social media and YouTube, the four brands currently drive roughly 300 million monthly video views, according to Katzeff.
Cumulatively, Literally Media has 35 million social followers, including 2 million on Know Your Meme’s TikTok channel. It also has 20 shows on Snapchat, a platform Katzeff has prioritized due to its ability to attract an audience.
On YouTube, Cracked has 2.7 million subscribers, Know Your Meme has 388,000 subscribers and a recently spun-off franchise, Honest Ads, has quickly amassed 150,000 subscribers.
Although publishers have to share YouTube ad revenue with the platform, it is one of the easiest channels for immediate, substantial monetization, according to FTI Consulting analyst Justin Eisenband. CPMs for video advertising can be five to 15 times higher than on-site display ads, Eisenband added.
To help lead its video efforts, Literally Media hired Gabrielle Williott, who previously worked at Thrillist and NowThis. It also recruited Josh Schollmeyer, the former editor in chief of Mel Magazine, to be the general manager and editor in chief of Cracked and eBaum’s World.
Both have been instrumental in getting comedy creators, such as Alex Ptak and Jeremy Kaplowitz of the Quorators series, to collaborate with Literally Media.
Diversifying beyond ads
Combined, the four publishers attract a monthly average of around 14 million visitors, according to Comscore, but their cluttered design can make them an unappealing destination for premium advertisers, according to Seth Hargrave, the chief executive of media agency Media Two.
Literally Media plans to revamp its websites in the next year, said Katzeff, but prioritizing off-site video, events and consulting businesses, lets it begin building on channels that are immediately amenable to brands.
Earlier this year, the company began hosting live, ticketed comedy events, hosting three specials so far. Outside of the revenue, the events provide Literally Media an opportunity to film the sets to distribute on social and its forthcoming CTV channel.
Literally Media also has high hopes for a product called KYM Insights, which uses Know Your Meme’s mastery of meme culture to advise brands looking to join social conversations. The company has built out KYM Insights over the last two years, but it plans to revise the pitch next year.
“Comedy can be hard to monetize, but if [Literally Media] can manage its costs, the model can definitely work,” Eisenband said. “Commerce and merchandise are natural bolt-ons for the sector. Smart publishers can turn viral hits into meaningful businesses.”
