Who’s Really Breaking The Internet?

In April of this past year, I was fortunate enough to speak at one of my all time favorite conferences – The Next Web: Europe. I talked about YouTube stars, their rise to prominence in mainstream media, and how they’ve actually been influential for a lot longer than we tend to think. I also talked about how those of us in advertising need to change our mode of thinking to focus on what’s effective vs what our peers our doing. You can see a video of my talk here, I’ve also embedded the slides below and added a slightly modified transcript of my talk below.

——————————–

The last year has been pretty incredible within the YouTube ecosystem.

The space has gotten a lot of buzz and a lot more ad dollars flowing into it. Previously brands were experimenting, but not quite investing the way they should.

A lot of this really changed when Disney made a huge investment in the ecosystem, when they purchased Maker Studios about a year ago. When Disney spends half a billion dollars on something people tend to take notice.

The ad dollars really started flowing in as a result of the credibility that Disney lent to the space. The acquisition also kicked off a string of acquisitions and you could really sense and see the hype in all the PR and press that had flowed out of the space over the last year.

YouTubers were on the cover of Fast Company, they were on the cover of Variety, celebrated as the future of celebrity. They were on the cover of Adage and Adweek. And the overarching narrative throughout this was that YouTube is the future of media, entertainment, celebrity, advertising, and within the ad industry everywhere you looked it was YouTube is the future, the future, the future.

But I call bullshit. Not because YouTube isn’t the future of all these things, I think it’s got a bright future, it’s more that YouTube for a long time has been the past and the present. The platform is over a decade old and for nearly as long its been around has been having a huge impact on media, entertainment and advertising.

For as long as I’ve been working in this space, which is about nine years now, I’ve been able to work with a lot of the same channels and creators and leverage a lot of the same tactics and still continue to deliver value to brands and continue to surprise and delight them.

But brands have had a tough time with this space.

Look at the top 100 most subscribed channels on YouTube and there’s not a single consumer packaged goods or apparel brand. Now, compare this to other platforms like Facebook where there’s nearly a dozen brands in the top 100.

YouTube culture has become pop culture but that this is not a new phenomenon by any means, this has been in place for a long time. Despite this, advertisers have largely ignored the opportunities. But you can make huge gains in this space.

I imagine a lot of people are familiar with this space and probably thinking ‘I get it, I understand what’s happening’.

But, what do you think of when you hear ‘Breaking The Internet’? I imagine a lot of people think of Kim Kardashian’s Paper Magazine cover photo showing off her rather large assets. That photo was deemed to have ‘Broken the Internet’ because of all the press coverage and hype it generated online, and it did generate a lot.

The week following the release of the photo, there were close to 600,000 mentions of Kim Kardashian’s Twitter handle, which is a lot. But, that this was the first time in about a year that she generated more conversation and more mentions than this PewdiePie, the popular YouTuber who posts videos of himself playing video games with commentary.

In a typical month PewDiePie generates 50% more conversation on Twitter than Kim Kardashian. And what’s crazy is he’s not alone, he is by no means the exception.

A couple other great examples, Jenna Marbles versus Chelsea Handler. Jenna Marbles generated ten times as many tweets last month as Handler.

Neil Patrick Harris and Tyler Oakley. Neil Patrick Harris hosted the Oscars, he’s huge. Tyler Oakley generated, over 20 times as many mentions of his name.

It might be easy to dismiss this and say these may be outliers or this is a new phenomenon that digital stars are overtaking traditional stars, but, it’s not.

Going back to 2008, I was working with EA on the launch of the video game. And we came up with a pretty cool campaign. We gave early access to a portion of the game, where you could design your own creature, to a handful of traditional and digital celebrities. Everybody participating went, created their own creature, and then invited their audiences to go vote for them. The winner with the most votes was going to get $15,000 to donate to the charity of their choice.

We had traditional celebrities like Stan Lee,Katy Perry, Elijah Wood, Carlos Santana, The Flight of the Concords. On the digital celebrity side we had folks like Kevin Rose, Phil DeFranco, iJustine, Veronica Belmont, the lead editor of Kotaku.

Who do you think won? Was it Katy Perry who just did the Super Bowl halftime show? Elijah Wood who at the time was at the peak of his Lord of the Rings fame?

It wasn’t any of the traditional celebrities that won. It was Phil DeFranco who posted one video and in 24 hours got over 100,000 votes, it was incredible. He beat all the traditional celebrities by a landslide.

So, this shift has been possible for so long, I mean this was seven years ago.

Why isn’t everybody doing this?

The ad industry, my industry, admittedly is probably as guilty of this as much as anybody.
We’re obsessed with what our peers are doing, who they’re working with, what press they’re getting, what awards everyone is winning. This is holding us back.

For example, let’s take a look at the content creation process as it typically exists with the brands and agencies today. It’s not the most efficient system.

Typically the brand gives the agency a creative brief. The agency goes through rounds and rounds and rounds with a number of creatives, finally lands on an idea, they take that to the brand, typically there’s back and forth. Now from there they get sign off and it goes back to the agency. And the agency then doesn’t go off and produce it, what they do then is they go and hire a director.

After you finally hire the right director, then you go into post production – casting, storyboarding, and so on. After a few weeks you end up on set and then you’ve got to pay for a production crew, you’ve got to pay for craft services, it’s a whole ordeal. There’s unions, and if you go past eight hours you’ve got to pay time and a half and it’s a big expense.Then finally after that you go into post production – editing, color correction, music, sound design and so on. And at the end of it you’ve spent a couple hundred thousand dollars and nobody’s even seen your spot. Then you have to support it with media.

Now, you could do that or you could brief one of these YouTube creators.

Give them a brief, allow them to create, concept, produce, and distribute a video to their millions or thousands of fans and followers.

When they distribute content, it’s to their hundreds of thousands, or millions, of fans who are desperate for the content. And oftentimes, not always, you can do this for about as much as you pay for craft services on a typical production set.

Despite this, one of the things that I often hear when I’m kind of pitching this to clients is, “Well don’t you think this is a fad?

And, I don’t really think that’s the case and that’s because these creators have a direct line of communication to their fans, there’s a feedback loop there.

You create one bad video as a YouTuber, you see all the comments, the feedback, you can even look at the analytics and see where people are dropping off and you can leverage those insights and make changes and adjustments with the next video. People are not shy at all about sharing their opinion with creators. So, the YouTubers have an opportunity to learn from this.

Now, compare this to the studio system.

If you’re an actor and you’re in a terrible movie that didn’t make any money, the odds are a studio doesn’t want to go out and hire you again. There’s a saying, “You’re only as good as your last project.” And it makes sense, a studio doesn’t want to invest and throw good money after bad.

But, this direct line of communication that YouTubers have is incredibly powerful. And it’s more than just likes, comments, and shares, there’s a real tangible benefit to this. In fact, Variety did a study among teenagers asking them who are the most popular celebrities today and the results were pretty incredible.

Of the top 20 most recognizable celebrities 50% were YouTubers, and all five of the top five were YouTubers.

And, going back to my point earlier about this not being a fad, these guys having real staying power, number one on that list is Smosh, who were the first creator that I worked with way back in 2006. They haven’t gone away. Even back in 2006 they were averaging two million views a video, so it’s pretty incredible.

Now, who’s number 20 on this list that Variety put together? Number 20 on is Leonardo DiCaprio. Poor Leo, not only has he not won an Oscar, but he’s also lost a popularity contest to YouTubers.

As an advertiser it’s tempting to throw my money at these top creators – those on the cover of Adage or Adweek or Variety.

But, it’s important to keep in mind the context of the new media landscape. Old media is based on scarcity, new media is based on abundancy.

Twenty, thirty, and forty years ago there were only so many distribution outlets, and so many networks, so you only had so many celebrities. Today, the whole model has totally flipped on its head.

YouTube has:
– Over a billion visitors every month
– 300 hours of content being uploaded every single minute.
– 50% of visitors are coming from mobile (so it’s a highly fractured audience)
– 10,000 channels with at least 50,000 subscribers

So as an advertiser that’s a huge opportunity, 50,000 subscribers is a lot.

To put it into context, there are shows on MSNBC, that don’t even get 50,000 viewers. So you have 10,000 outlets with the potential for TV scale. So you don’t need to necessarily go for the biggest creator to be effective, bigger isn’t always better.

A great example of ‘bigger not always being better’ is six years ago I was working with DKNY on the launch of a new fragrance and we faced a bit of a crossroads.

We were deciding how to allocate our dollars, we knew we wanted to work with influencers and we were debating whether we should we give our money to one of the top five fashion makeup beauty gurus at the time, or should we distribute our dollars across up and coming creators?

We did the math and on a cost per view basis it made a lot more sense to distribute our dollars across ‘up and coming’ creators. We got about 50% more views than if we’d allocated it to one of the top more recognizable creators. This was six years ago, there wasn’t as much competition among advertisers as there is today. By going with the ‘up and comers’ we were not only getting a more efficient spend but we were also tapping into more niche communities that hadn’t been as saturated with brand names like the those following the top creators.

In working within this space I definitely recommend you let your competitors be star fuckers.

It’s good to buy low, sell high. Spread your dollars amongst the most relevant creators because you’ve got plenty of options in terms of scale.

So, why does all this matter?

Well, in a lot of ways, we in the ad industry are behaving in a manner not that dissimilar from the same teenagers that we’re trying to target. I mean, we’re obsessed with what our peers think of us, we want all of these awards, this recognition, these accolades without necessarily putting the time and the effort to understand the realities of the way the world is working today.

By continuing to tell ourselves YouTube, Snapchat, Vine, etc are something that’s going to be big in the future. We wash our hands of taking any responsibility and taking action today. We need to change our mode of thinking.

An analogy that seems appropriate is this story I heard about Arnold Schwarzenegger. I heard that when Schwarzenegger was training for Mr. Universe he took ballet classes because he thought it would help him with his posing on stage.

At first I thought that sound so ridiculous, a bodybuilder doing ballet?!?! His peers must have thought he was crazy.

However, when you take a step back it makes so much sense. He wanted to look more elegant and fluid when he was doing his poses. So what more effective way to understand how to do that than study ballet? Who cares if it’s different, it works.And I think we need more of that thinking in advertising.

How ridiculous does it sound to say, “Hey, you know, don’t give your money to a bunch of professional directors, invest it in YouTubers, and not even necessarily the most popular ones.”

We in advertising can spend a few more years and try and win some awards for commercials, or invest in this space and in new ideas and ways of working.

Because, YouTube is not going to future proof you, it’s not the end all, be all of advertising. It’s investing in a mode of thinking and basing decisions on facts, and the realities of the way the landscape is working. When you do that, even if it looks ridiculous to your peers, you’re going to adapt and change and set yourself up for success to evolve and be able to learn, and ultimately that mode of thinking is what’s going to let you thrive and set you up for success in the long run.