MediaTalk | Season 4 | Ep. 8 - How Brands Are Balancing Human Authenticity with AI Efficiencies

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence tech, media and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global, wherein the news and research staff explore issues in the ever-evolving media landscape. Today, we're talking about the changing way brands — whether that means news publishers, musicians, politicians, retailers or even podcasters — are connecting with consumers when all of us are constantly bombarded with information at least some of which likely a growing mound has been generated by artificial intelligence. I'm with Mike Donoghue, who is the CEO and co-founder of Subtext which is a platform that connects publishers, creators, and brands with audience through text messaging, with brands facing challenges due to media fragmentation and algorithm shifts on social platform subtext emphasize the power of short messaging services that deliver a high open rate. Mike, thanks for being with us again, and I hope I have that description somewhat correct.

Michael Donoghue: It was amazing, Mike. Glad to be here again.

Mike Reynolds: Okay. We appreciate that. Before we get started we're both in New York, a lot of snow. I wanna just get started and say last year you joined us in January. Mike, hard to get one of your best highlights out of the way right from the get go, but you were also named one of the most innovative companies recognized by Fast Company. Congrats on that. Any words on that one?

Michael Donoghue: Obviously a huge honor and a testament to the work that the team is doing and some of the amazing, innovative work that our clients are doing on the platform. To your point, sometimes tough to set the bar really high at the beginning of the year, but I was proud of the team continuing to raise it.

Mike Reynolds: We appreciate that. We appreciate that. Alright, we talked last year, we talked about two-way messaging, bilateral messaging, if you will, is at the heart of what you guys do, right?

Michael Donoghue: Yeah, absolutely. Our goal at Subtext really at the end of the day is to be able to empower our clients to really own a direct line of communication with their audiences. And I think at a time when communication, and we're all guilty of this, is becoming less human, we're seeing more and more savvy organizations leaning into their areas of differentiation and leaning into the things that really make them more human right, as a way of forging more meaningful connections.

Mike Reynolds: And this is all occurring, Mike, because there's just so many messages, so many people reaching out and it's just hard to break through, right?

Michael Donoghue: So many messages, so much clutter, so much noise. So little signal. But I also think, there's a lot of technical catalysts that are changing the calculus for the way that, let's say media companies, for example, reach their audiences, right? We've seen AI-driven disintermediation. We're going to see disintermediation coming to email, will see social algorithms continue to change or be less reliable. So there's a lot of different factors at play.

Mike Reynolds: Okay. You mentioned media companies. What are some of the other clients that you work with specifically? And did you add any big accounts in 2025 that you can talk about?

Michael Donoghue: Yeah, absolutely. So we still continue to do a lot of work in media. I think, we work with essentially every major media company in the US and a lot in Western Europe and Australia as well. We've continued to do a lot of work with creators. So these could be YouTubers, people that are normally creating content in a variety of different mediums, sports, entertainment. Events really you name it, right? Like anywhere deep fandoms and the desire to connect with individuals and the subject matter that make a difference in those individuals' lives is happening. We want to be there.

Mike Reynolds: This is getting a little crass and commercial early, but so be it. Can you talk about what kind of year '25 was in terms of revenue growth for Subtext?

Michael Donoghue: Yeah. No, crass and commercial is totally fine with me. Okay. Yeah. 2025 is an amazing year. So we were up over 100% year over year in terms of revenue.

Mike Reynolds: Okay. Just 100%, huh, Mike?

Michael Donoghue: 100%. We'd like to see 200%, 300%. The team, they're doing their best.

Mike Reynolds: Okay.

Michael Donoghue: But no, so we've continued to grow there and similarly we've reached a lot of, I think, meaningful milestones, right? So we're still sending billions of really important messages on the platform. We're now up over 30 million subscribers. Our churn rate in terms of our subscriber base is less than 1% annually. So there's a tremendous amount of value being exchanged on the platform. And, we've been really fortunate, right? We brought on amazing clients like the New York Times or the Washington Post, or NBC Universal, a lot of folks in the creator space and we're still continuing to do a lot of work in music too, right? So Sony Music, Warner, Universal, BMG, Rock Nation. And that's always fun, right? Being able to connect artists with their fans in a way that feels rewarding and unique and personal.

Mike Reynolds: I was going to ask you about musicians and labels and things like that. Obviously it's important in terms of we like music, but we also wanna find out about, what turns the artists on, what gives them their creative values, right?

Michael Donoghue: Absolutely. It's not only a great opportunity to pull back the curtain on the creative process and what is important to these individual artists, but it's also because of the bilateral nature of the platform. It's a really great way to create a participatory experience for your biggest fans. So I'll give you a real life example. We have an artist on the platform, Maggie Rogers, who is incredible, right? And Maggie had a new album coming out. She released it early to her subscribers on the platform, and then she actually asked all of those fans to send back an audio clip with a reaction to the new songs that she had put out there. Maggie listened to them, she reacted to them on social and it was this really fulfilling, sort of full circle experience for those fans that, in any other medium would not have the opportunity to literally have their voices heard by one of their favorite artists. So it was very cool. It was a fun project to be a part of.

Mike Reynolds: I would assume that, in most cases everybody has a different strategy with this. But again, in a musician standpoint, does that make sense as a new album comes out or are they corresponding with their fans, beyond the launch date and as the year progresses?

Michael Donoghue: So the best use cases on the platform are always on. We like to call them. Okay. So not only when you have a tour coming up, not only when an album is coming out, not only when you know there's new merch available or something like that, but even, look, if you are in the studio and you are working on new tracks or you are working through your creative process, being able to bring fans into that experience is incredibly rewarding, particularly at a time when you might have artists out of cycle for a certain period of time. People's taste tend to change. So it's a great way for artists to remain top of mind. But the same is true for all of our clients, right? The same is true for media companies. Same is true for creators.

Mike Reynolds: I gotcha. Alright. In terms of AI, I know when we spoke last year maybe AI and you aren't necessarily on the same page. Again, it would seem though, Mike, every other sentence. That's an exaggeration to a point, but, AI is everywhere and if it's not there yet, will be. What does that do for what you guys do?

Michael Donoghue: Yeah, of course. The reality is like there's no anti-AI position anymore. I think like the genie doesn't go back in the bottle at this point. The question is what do you use AI for. And I think, we as a platform over a year ago at this point, came to the decision that, we weren't going to use AI to replace the human voices on our platform because there's something disingenuous about it. There's something that doesn't feel right in terms of asking fans to invest their time to interact with a fabricated version of their favorite artist or their favorite media company or their favorite creator. But what we want to use AI for and harness its power for, is actually the ability to create compelling insights at scale. So if we have an artist, or a media company that has a really important story and they share that story and they're asking for audience reactions. They might get 500,000 responses. And it's very difficult to be able to parse through those responses and create any sort of meaningful insight out of all of that activity. We like use cases that leverage AI that might be able to synthesize all of those responses and create actionable insights as opposed to faking the voice ultimately of a media company, a journalist of an artist or a creator. It's really, the position that we take on it is like people want to be able to talk through machines but not necessarily to machines, right? Particularly when it's meant to be a more humanizing experience.

Mike Reynolds: Okay. Alright. Your marketing vice president Sarah Schmidt was with us last year and we talked about 2025 from a political standpoint. What kind of year was 2025 for Subtext, Mike, and I would assume 2026 going to be a big one.

Michael Donoghue: So 2025 we did a fair amount in politics. I think what's maybe a little bit different on our platform maybe versus some of the other, like peer-to-peer, traditional political platforms is we're less interested in the unsolicited use cases where you are getting, maybe what seems like an extremely random message asking you for money. Or, an ask to sign a particular document or a GOTV [get-out-the-vote] effort or something like that. Our use cases on the platform and we've had some really compelling ones, right? Like we did Mikie Sherrill who just won for governor of New Jersey. We've worked with Hakeem Jeffries. Our use cases traditionally are politicians, issue advocacy groups, causes that are looking to open up a dialogue with their audiences. And lend, what I think is a really important dimension to their candidacy in terms of listening to their constituents in terms of opening up a meaningful dialogue and not just playing whack-a-mole with different phone numbers, asking for donations.

Mike Reynolds: I gotcha. So having said that — 2026, are you working with a lot of campaigns or candidates you expect to be?

Michael Donoghue: I'm sure we'll do a fair amount of work in the space. I think the inbound interest to us has certainly started to pick up, which I think is great. And I think it's not only the just raw inbound interest, but the sort of innovative approaches to using the media more effectively. We're encouraged by that and I do think we'll do some work there, but I promise Mike we won't be the platform that is haunting you for donations every three days.

Mike Reynolds: Yes, I'm assuming that cycle is about to begin shortly anyway.

Michael Donoghue: It might be.

Mike Reynolds: Okay. Alright. We're also going to have Mike give us a few predictions for what may occur over the course of this year. In general terms, and we've mentioned this a little bit in 2026, brands that forego human connection will lose, Mike.

Michael Donoghue: Yeah, the way that we see it is like AI largely, and I think this is true and it's to be expected based on like the huge technical lift and the scale that AI provides. But AI is very much turning communication into a commodity, right? People are using Chat GPT or rather, like similar AI for the kinds of information and advice they used to get from trusted experts or family or friends. But what gets lost is the human element. And I think a lot of the context, the emotional intelligence, the deep domain knowledge that you would expect, let's say, go to see a doctor versus asking Chat GPT to diagnose you or something like that. And I think as exchanges get faster, more transactional and less personal, audiences become less invested. It's “I wanna know what time the Super Bowl starts.” I'm going to ask my question. I'm going to get a response, I'm going to move on. And you know what it really boils down to, to borrow a phrase that I used earlier, is people want to be able to get this information quickly, but they want to be able to talk through machines and not to machines. And I think, if brands are of the opinion that they can automate everything about their business, every sort of customer facing experience or marketing tactic or anything like that, and just deploy chatbots, they're really kidding themselves. I think, it looks good on paper, right? But it's very much a race to the bottom. And I think, the brands that make an impact and cut through in 2026 are going to be using AI for the efficiencies that they need to be able to scale the business and to address questions and build value, but they're also going to be doubling down on empathy and improving credibility and facilitating human connection. I think, that's the real story. And it's why human voices and honest expertise will continue to win the attention economy, especially with younger people that tend to forge more emotional connections to the brands that they do business with.

Mike Reynolds: Interesting. The next thing I wanna talk about, Mike, is the new email world is changing in, I don't know, for the better or not. What do you think?

Michael Donoghue: Yeah, it's super interesting, right? So if we're putting our publisher hats on for a second, we saw in '25 sort of what the impact was to publishers related to like the Gemini-driven disintermediation of search results pages, right? So like, whereas previously, you would've as a user typed in a query and gotten 100 different results and you were going to pick which results made the most sense, now you are getting an AI-driven response, a single response with maybe a good amount of context and that sort of thing, but you're not making a conscious decision around what content to consume, right? It's just being brought to you. And, based on that, a lot of people saw major traffic declines and there was this big retreat into email, as this sort of last bastion of owned communication with an audience. But, the truth is, and I think, we've seen this to a degree already. There's another AI shoe to drop in email. We think, Hey, we sent an email newsletter to 100,000 people. A hundred thousand people receive it. That's really not the case. And I know Apple and Google, the two biggest providers of email clients in the world, have very clearly stated goals to do something like distill the contents of your inbox and tell you the 10 things you need to know today. So we work with a lot of publishers that are coming to the realization that they over-indexed on email, and they're moving towards mediums like SMS, where there is no big tech gatekeeper.

Mike Reynolds: I gotcha. This is an interesting headline here. The entrance to the internet now has bouncers if not necessarily physical. How, Mike?

Michael Donoghue: I don't know, Mike, this is probably not the case for you, but I've had the velvet rope put in front of me a few times back in my college days.

Mike Reynolds: Okay. Yeah. That at 54 and at the Raz Club. There you go. Anyway.

Michael Donoghue: Exactly. But yeah, so I described it a little bit, but Google, everybody knows. It's like Google used to be the front door to the internet, right? And like you would type in a query, you would get a bunch of different, hopefully pretty good responses to that query. And you were going to pick which of those you found to be the most valuable or the most insightful, or the most trustworthy. And now, AI platforms, it could be Perplexity, it could be Chat GPT, anybody. They're making those decisions for you, right? So you want a query, they provide you a response that's presumably handpicked by them, but the algorithm is handing it to you. And you know this not only like vastly changes discovery, but it means that audiences lose real choice and nuance can get lost. And things like organic search are totally upended. So I think, it very much changes the playing field for both people that are creating the content and people that are looking to consume the content. So what we're seeing largely is like more and more publishers, more and more creators hedge against this by building parallel direct channels with their audiences where that content is not being filtered, it's not being shaped by somebody else's business model. The quality of the information that you get is not predicated on the amount that you pay for your subscription every month. So we're looking to create a real degree of like information equality here.

Mike Reynolds: So this is again and I think this is how it should be for everything, or maybe not everything, but you want quality over quantity, right?

Michael Donoghue: Absolutely.

Mike Reynolds: Okay. Alright. We're getting to the end here, Mike. In 2024, Subtext engaged in 10 billion messages. What was the count in '25?

Michael Donoghue: So we doubled that in '25.

Mike Reynolds: Will you do that again in '26?

Michael Donoghue: Sure. Looks like we will. Which is great. There's a tremendous amount of really valuable information being exchanged on the platform every day. And, we love to see those numbers go up.

Mike Reynolds: And as you said, 99% of your messages are open. That's phenomenal.

Michael Donoghue: Absolutely right. I think, if you're a publisher, if you're a creator, if you're an artist and you look at something like a 99% open rate and you weigh the return on investment or the return on your time invested, it's really a no-brainer, right? And that's to say nothing of the engagement rate. That's to say nothing of the click-through rate and that sort of thing. It's a really high impact channel.

Mike Reynolds: Alright. Any overriding goals for Subtext this year or new categories to break? I think, you had a new product entry last year. You added surveys to the mix. Anything new on the horizon that way?

Michael Donoghue: Yeah, surveys was great and it's always spoke to one of the big areas of differentiation in our platform and the medium in general, the bilateral participatory nature of it. But yeah, I think over the course of the year you'll continue to see us invest in enriching that bilateral experience while also leaning much more heavily into data and surfacing actionable insights for our hosts, for our clients at scale. We're also going to be investing a lot to capitalize on a big area of traction for the business, which has been our white label functionality in some of the channel partnerships that we have in this space. So I suspect probably in the first half of this year you'll see some really exciting channel partnerships from us on par with the one that we did recently with SoundCloud. I wish I could tell you more, but certainly more to come there.

Mike Reynolds: Mike, thank you. This concludes this episode of Media Talk. I appreciate Mike from Subtext here with us again and we'll look to do this again next year. And thanks for joining us, Mike.

Michael Donoghue: I'm looking forward to it. Mike, thank you for the time.

Mike Reynolds: Alright, and this is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next episode of "MediaTalk."