How OZY Media exaggerated its way into infamy — and the XP repercussions

In the eternal words of Ernest Hemingway, OZY Media’s downfall happened “gradually and then suddenly.” You’ve no doubt heard that, following last week’s media storm over (allegedly) hugely inflated audience numbers and the bizarre case of a company co-founder impersonating a YouTube exec, OZY Media said Friday that it was shutting down, only to reverse course Monday and say it was relaunching (see the full details below).

The population can generally be divided into two categories when it comes to OZY: The Unaware and The Suspicious. The unaware have never heard of the media company, the festival, the podcasts or the deep-pocketed investors. The suspicious were usually in the events and experiences industry (oh hi, hello, that’s us).

The debacle is unfolding before us in head-spinning real time and we at XP Land believe that it could lead to a reckoning of sorts for the experiential community.

The quick catch-up

A New York Times story last week revealed that OZY co-founder and COO Samir Rao impersonated a YouTube exec on a conference call with Goldman Sachs. As if that wasn’t bad enough, just days later, Forbes published an investigation of OZY Fest 2019 — the company’s annual festival — which OZY Media CEO and co-founder Carlos Watson described as “TED meets Coachella.” But the piece characterized the event as a Fyre Festival waiting to happen (we’ll never know since a heat wave led to the event’s cancellation). There was also the talk show that the company told producers would be broadcast in prime time on A&E, despite the fact that the network had reportedly already declined the program. And the subsequent positioning of said show as “Amazon Prime’s First Talk Show,” which is questionable at best.

The reporting across outlets has uncovered what seems to be a longstanding tradition of OZY execs (allegedly!) inflating their metrics, their partnerships and the impact of their brand. In a letter to OZY readers this week, Watson explained that “we have often marketed hard. Sometimes too hard, with bold claims and improper attribution” and that “we have had good data, but often struggled to lay it out clearly for people used to only looking at website traffic.” Hmm, “alternative facts,” anyone?

Last Friday, OZY Media announced that it was shutting down. By Monday, Watson was on “The Today Show” proclaiming that no, actually, the company was not closing up shop and that, in fact, “This is our Lazarus moment.” But he did not explain any of the how’s or why’s of the reopening. As the aforementioned Forbes piece noted, there is no updated programming for the OZY Fest that’s supposed to take place Oct. 16-17 in Miami, and it appears that no tickets have been sold.

Houston, we have an audience measurement problem.

The former editor in chief of Digiday, Brian Morrisey, wrote that he viewed “OZY as an example of what I believe is a major cultural hurdle to making publishing more sustainable: The high tolerance for bullshit.” He described the propensity for hype and unverified audience numbers as a “feature, not a bug, of the media industry.”

In the Times column that served as the opening salvo into the OZY inquiry, Ben Smith wrote that, “Even in an industry known for smoke and mirrors, OZY has for years raised eyebrows over its claims about its audience size.”

However, it would be inaccurate to say that there’s nothing behind the curtain at OZY Media. Yes, the audiences across platforms (including IRL) appear to be substantially smaller than what’s been trumpeted, but there is real content behind OZY Media — articles, podcasts, TV shows and events — and there is real revenue, too. Smith himself notes in his piece that OZY has had success in the past with OZY Fest as well as various production deals.

In his note to readers, OZY CEO Watson said, “[W]hile one report tried to malign OZY Fest as some sort of Fyre Festival, you know that we have held that wonderful event four times — three in Central Park and once virtually — meeting thousands of terrific people in the process.”

So where do we go from here?

It’s always been difficult to clearly define ROI for experiences. Short of putting a Martha Stewart ankle cuff on an event attendee or implanting a chip in their brains, how can we find out exactly what they did and their reactions while doing it?

We can follow the money in the form of their credit card activity — like if they bought a ticket to a beauty event and then went directly to Sephora to buy something. But that gets us into privacy issues and that’s a real slippery slope.

Compounding the issue is that some events are so expensive to produce — and often take years to break even on — that the industry has been forced into all kinds of reporting backflips and analytic juggling acts to prove how an event impacted everything from social media engagement and follower counts to localized revenue and consumer loyalty.

There are key learnings to be gleaned from what’s unfolding around OZY, many of which tie back to the complicated issue of measuring audience in this age of multiple virtual and IRL touch points.

• Experiential measurement is nuanced. Who’s really to blame for OZY’s deception? Is it a money-hungry founder looking to rub elbows with the media elite? Or investors that demand gold-star perfection from year one? It’s time we set clear upfront expectations with sponsors and investors about the complications involved in traditional cut-and-dry marketing analytics.

• We need customized Return on Experience metrics. During the planning and production phases of any experience, create a unique set of criteria on which to evaluate success. Consider the ideal attendee, production costs, marketing goals, sponsor/partner expectations and digital reach in order to set realistic goals upfront. Also, allow joy to speak where numbers can’t — all it takes is a camera crew and maybe some forced confidence. Film and interview attendees in the middle of the action, while the endorphins are flooding and the memories are building. Not only does it make for great marketing content for the following year, but it proves the hard-to-quantify value of experience to those controlling the budget.

• Yes, we should still invest in third-party services for validating metrics. Using third-party vendors to execute pre- and post-experience surveys to your audience is another part of the equation, as is having on-site mechanisms to gauge that age old question, “Are we having fun yet?” (Perhaps we can do better than those weird kiosks where we hit a smiley face or frowny face button to reflect our at-event feelings?) Watson’s letter promises that OZY “will do better in the future and ensure that we are delivering that data transparently, with third-party validation for our partners and stakeholders.” We need a Comscore or Nielsen (well, maybe not) for experiential. But better. Let’s get on it.

It’s engagement that matters — not scale without soul.

• A growing, loyal audience will beat a giant, detached follower count every time. Focus on the attendees and ensure that their experience is safe, interesting and exciting. Then, they become the event’s — and the brand’s — most valuable marketing tool. Two thousand people attended 2016’s inaugural OZY Fest in Central Park’s Rumsey Playfield. By 2018, OZY claimed it had sold 20,000 tickets for the event — at a venue that can only hold 5,000 people. And what’s wrong with 5,000 people? Any solid experiential pro could find the magic in those numbers: How long did the average guest stay? How many stages did they watch? How much money did they spend onsite? Who was a repeat attendee? Who was brand new and used the newsletter-exclusive discount code? How much merch was sold onsite vs. online? How many user-generated posts were shared to social media the day of? What about a week later? Did the talent post their pre-planned Instagram Stories? How many fans interacted with that content? It’s engagement that matters — not scale without soul.

• Finally, treat your team well because they make the experience. Noticeably missing from the conversation? Former employees rallying to defend OZY leadership or products. By some counts, as told to CNN, the company created a toxic work environment of 18-hour-days and panic attacks. We all know that events are intense. And the news cycle is exhausting. But giving people time to recuperate, while protecting their physical and mental health, is table stakes for any employer at this point.

• Okay, one last thing that we thought didn’t need to be said: Don’t fake your celebrity guest list. Former employees alleged to Forbes that OZY was paying celebrities to appear at OZY Fest, while also embellishing what the event would actually entail. “The way they’d get guests on their TV shows and guests on their festivals is they’d lie and say they already had commitments from X, Y and Z,” an employee told Forbes. “And they were like, oh that person dropped out, oh that person can’t participate. But they never had those people to begin with.”

It’s certainly interesting, and likely not a coincidence, that the OZY scandal is intersecting with the Facebook whistleblower news cycle in our post-Trump world. Ultimately, this is a battle for transparency and truth in business and beyond. It seems that we’re all collectively moving toward that — we want brands and companies and leaders that we can actually trust to do the right thing and to tell us the truth. Perhaps everyone is just done with the half-truths — and often downright lies — and seeking accountability. We’re in. How about you?

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