Jim McKelvey hopes to fix what he calls a “broken” economic model for online publishing through his latest venture, Invisibly.
McKelvey, the St. Louis native and Square co-founder, started Clayton-based Invisibly in 2016, and last December the startup raised $20.2 million. At an event March 6 at the Missouri University of Science and Technology in Rolla, he spoke about two major issues he hopes the company will solve.
The entrepreneur discussed the loss of control over how big data is leveraged to monetize our online identities, and he addressed the diminishing quality of online media content. Both, he said, are bogging down the economics of online publishing.
In regards to the first problem, McKelvey asked the audience if they would prefer to have more control over how big companies, such as Google, monetize their identities online.
“This is becoming more and more relevant in our lives,” McKelvey said. “This is something that not only do we not understand, but we don’t even have the data to begin to understand how it’s happening.”
“And this is sort of terrifying to me,” he added.
The second problem McKelvey outlined was the diminishing quality of online material.
“We are losing quality media, and by media I mean journalism, I mean magazines, I mean scripted television, I mean stuff that costs money to produce,” he said.
McKelvey likened media companies to venture capitalists in the sense that media companies invest significant resources to create content in hopes of getting some kind of a return.
“And let me tell you, the media model, is broken, economically,” McKelvey said.
“I mean that every one of us in this room is unable to pay for quality content, and the media companies are unable to monetize quality content,” he added.
McKelvey said that the current strategy of the typical media business is to create content as cheaply as possible and that “if we don’t pay more for the quality content, it will disappear.”
To address these issues, Invisibly has recruited a coalition of media organizations that currently represent 30 percent of the industry, McKelvey said. The group hopes to produce higher quality content and to sell it for more money.
The way Invisibly hopes to change ad tech is by replacing digital ads that are smaller and typically less relevant with ads that are less numerous but larger and more specifically tailored to the user.
“So it’s more efficient for the users to have their ads reduced, but then increased in engagement,” McKelvey said.
The logic behind this, he said, is that if the Invisibly system produces a win for the user, as well as a win for the advertiser, then the advertiser in turn is willing to pay more for ads. Ultimately, that is good for media companies, allowing them to produce more high-quality content.
McKelvey said that essentially the system produces an economy that is passively created by the users, who access the content of their choice through micropayments.
The system runs in the background whether users want it to or not, McKelvey said, but users ultimately have the choice to take control of how they are advertised to online.
McKelvey compared Invisibly with Square, in the sense that both Square and Invisibly started by venturing into a kind of unknown territory.
“I can’t tell you that we’re necessarily going to pull it off,” he said. “But I’ll tell you this, we have a really good team of people that really care about the product because they care about the problem.”