The news: Substack is exploring a larger shift from a newsletter-first platform to a more expansive media ecosystem—one that could include ads and a social media identity.

• The company is doubling down on the Substack app and aiming to show that social media “can be fun and rewarding without melting your brain,” the company stated in a blog post.
• “We think (there’s) a massive opportunity to launch a native form of advertising within the Substack ecosystem at some point,” said Mike Kerns, co-founder of Substack investor The Chernin Group, per The New York Times.

Zooming out: Substack CEO Hamish McKenzie has called the ad model for media “busted” and social media a “narrative frenzy.” But based on creator demand, times may have changed. “Their creators have told them that they want Substack to support advertising,” Kerns said.

The company’s willingness to explore new revenue streams—like advertising—may have played a key role in its recent $100 million funding round, which valued Substack at $1.1 billion.

Social tools: Over the past few years, Substack has evolved into a more social, multimedia-friendly platform, from rolling out @ mentions to offering homepage layout customization and podcasts.

Substack is targeting users who want a social media experience with a community feel.

• In March, it rolled out a TikTok-esque scrollable video feed to tap into short-form video demand and added a suite of tools for video podcasting and editing clips in 2024.
• To incentivize creator migration, it launched a $20 million creator fund in January and a TikTok Liberation Prize for users who help bring TikTok creators to Substack.

Why does it matter? As legacy platforms become more saturated, Substack has built a reputation for editorial control, candid content, and loyal readerships.

Thirty-seven percent of Substack users feel connected to and part of a larger conversation, per The Verge, compared with 34% of YouTube users and 30% of TikTok users. That engagement could support community-driven marketing—as long as ads don’t ruin Substack’s ethos.

Our take: As AI search engines downgrade publisher content, Substack could become an important channel for brands to reach loyal and engaged young audiences.

Marketers should research creators to find authentic voices that align with brand messaging, craft company newsletters to get onto user feeds, and be prepared with market analysis if and when Substack launches ad placements.