Headlines like ‘The Dishonest and Wasteful Practice of Influencer Marketing’ paint influences with a broad brush as money grubbing and eager to take any brand deal coming their way and sell out their audiences along the way.

That’s just not true and doesn’t accurately reflect the majority of my experiences in nearly 15 years of influencer marketing.

Influencers say no and fight for work they believe in.

I personally have experienced influencers walk away from 6 figure brand deals because they didn’t feel it was a good fit, or they felt like they couldn’t do the campaign justice. Oftentimes they genuinely loved the brand, but simply couldn’t take on the workload or couldn’t quite wrap their head around a way to bring a campaign to life.

When working on branded content with influencers, they often say no to client requests and push back in order to fight for what they feel is going to work best. That’s their job. It can be frustrating, but ultimately, I’m incredibly grateful that they do it.

Ultimately, saying no to most opportunities makes sense for influencers.

The connection influencers have to their audience is the lifeblood of their business.

As tempting as it may be to take a nice paycheck in the short term, if it is going to compromise the relationship they have with their audience (real or perceived) they should say no. Brands come and go, but the audience is the renewable resource that keeps their business alive – brand deals or no brand deals.

This isn’t some deep insight, and I’m not saying that all influencers are saints. I have had some incredibly difficult experiences working with influencers. However, by and large, I’ve found my experiences in working with influencers to be extremely rewarding, informative, and effective for the brands.

The reality of influencer marketing is more complex than the knee jerk reaction being made by many marketers writing op-eds at the moment.

Some influencers are more talented or honest or hard working than others, and in many ways influencers have got more in common than a typical creative director than anyone else.

As a general rule they care about their reputation. They want to do work they’re proud of. They want to make work that is fulfilling and recognized by their peers.

For both groups this oftentimes means forgoing short term gains and carefully curating the opportunities they take on in order to create a career with longevity. For Creative Directors you see this reflected in the way many choose to work for more creative shops vs behemoths that pay well but churn out crap. Just like influencers, Creative Directors have a responsibility to push back on clients if that’s what it takes to get great work made.

Generally speaking, neither influencers nor creative directors wants to sell out their credibility for a quick pay day.

As frustrating as the creative process can be, I’d much rather have someone be honest with me about what they believe will work best, and is right than take the money and run.

Objectively, I think we can all appreciate the integrity it takes to say no and push back in the face of overwhelming pressure or walk away from the carrot in the form of a nice payday being waved in front of our face.

That much content would have been considered excessive, costly, and unnecessary five years ago.

Today, we as advertisers must approach content in the same way developers approach landing pages. What I mean by this is we have to test and iterate upon the design in order to increase the likelihood a visitor takes the action we want them to take.

Also, consumers don’t really visit websites anymore.

Mobile has upended how we use the Internet – today 2 out of 3 digital media minutes are spent are on mobile. As a result, apps drive the majority of our Internet usage. For brands, this means that there are fewer opportunities to fully own the experiences they serve to consumers.

As a result, advertising content needs to work much harder than it ever did before.

Your content must live independent of supporting information and be bite sized.

You must bring brands to life without relying upon a website – ads are now a microcosm of the macro brand – telling the same story and playing the same role your brand’s site once did.

Much in the same way developers have taken to adjusting all aspects of a landing page – fiddling with font sizes, layout configurations, and colors advertisers must now take the same approach to video.

We can’t take for granted that a great ‘big idea’ alone will carry a campaign.

The idea of landing pages originated back in 2003 when Microsoft was looking to increase online sales of Office. Back then the process of optimizing landing pages was a labor-intensive process. Since then, countless products and apps have come on the scene allowing developers to automate testing of countless landing page iterations.

For social ads we as marketers are facing the same issues that developers faced with landing page optimization in 2003. We don’t have the tools to simply have an algorithm automatically churn out test pages and automate

We need to do dozens of edits A/B testing intros and outros, as well as the content of our ads in order to generate the best result for our clients.

Currently, its common practice to test countless audience segments, and countless ads (so long as they’re still images), but rarely are we applying the same methodology to video.

Data driven storytelling is a pithy phrase that’s been touted in the ad community and lead countless agencies to turn their nose up at the role technology can play in influencing creative. But, I think there’s a broad misunderstanding as to how technology can elevate creative, and ultimately, improve efficacy.

Instead of thinking of data driving an idea, its important to think of it as informing the executions.

A computer is not going to spit out a big campaign idea (not yet anyway). We’re years away from algorithms taking over the Creative Director’s job.

What tech can do is tell us who’s getting the message, comprehending that big idea, and what executions are resonating and/or where they need to be tweaked in order to generate the best returns.

Ultimately, if you aren’t optimizing social video, and having data inform the story you’re telling, you’re only playing with half a deck.

Ad formats are getting shorter and shorter (:06’s and :15’s) and countless studies are showing consumers don’t want to engage with ads.

However, it isn’t the result of people having short attention spans – its shitty ads.

There’s an overwhelming amount of hype and headlines communicating that the next generation of consumers has the attention span of a goldfish.

Millennials only have a 5-second attention span for ads (CNBC)

Decreasing Attention Spans and Your Social Media Strategy (AdWeek)

Engaging Consumers In The Era Of The Eight-Second Attention Span (MediaPost)

Young Consumers Switch Media 27 Times An Hour (AdAge)

Personally, I find these headlines, and the associated gripes from marketers to ring hollow. That marketers and advertisers are using this faux technological ADD as a scapegoat for why their advertising is consistently underperforming.

Just because advertisers gripe about consumers being difficult to reach or to spend more than a few seconds with ads doesn’t make it so. I think it’s a cop out.

I’d argue people are more willing than ever to engage with content for extended periods and time and that we’re even seeing a resurgence in long form content across mediums. There’s plenty of information to reinforce this perspective.

Ooyala recently reported that long form video content consumption is up 30 percent from last year and we’re seeing social platforms adapt to incorporate long form content. For example, Instagram just launched IGTV which allows for 60 minute video uploads. Contrast this with Vine, the 6 second only platform, which died after failing to adapt when all the other social platforms expanded to incorporate longer form content.

Also, the most popular influencers post long form content. For example the most subscribed YouTuber, PewDiePie, regularly posts videos 20-minute-long videos to a community of millions of fans.

The most downloaded podcasts are all long – each of the top 3 podcasts are usually over 45 minutes long. Joe Rogan, frequently the most downloaded podcast blends comedy, politics, and philosophy for two to three hours at a stretch. The #1 Twitch Streamer, Ninja, regularly streams for 6 hours at a time, generating as many as had 600,000+ concurrent viewers.

Despite consumers regularly opting into content for extended periods of time, brands are struggling – consumers are avoiding ads as much as possible.

Ad blockers have become mainstream and according to some studies 75% of North Americans use at least one form of regular ad blocking and about 10 percent block ads across four or more types media channels. Furthermore, 90 percent of people skip pre-roll ads appearing ahead of online video content and 82% of people report that they have closed a web page because of an autoplaying video ad. Meanwhile the vast majority of young people are scrolling past their Facebook feed fast they’re seeing less than two seconds of most ads. This trend has advertisers seriously worried and for good reason.

The marketing model has changed, but a lot of brands haven’t changed with it. Alison Lewis, chief marketing officer of J&J’s consumer business, said that for decades, the company would create two 30-second TV spots, two billboard ads and five print ads every year. That is “not how the world works today.”

Look no further than the shaving category to see how advertisers have been caught off guard – just ten years ago, Gillette dominated the razor blade market. Their ads were comfortable, predictable 30-second units that reminded everyone of something they already knew: you need razor blades on the regular, so you might as well buy Gillette.

The market had to reorganize itself with the appearance of Dollar Shave Club (along with Harry’s Razors). Dollar Shave Club’s distinctly off-the-wall messaging, heavy use of social media, and direct to consumer sales won major viral attention. The notorious startup used quirky 90-second ads to spread its word online, presenting itself as un-ignorable by comparison to the competition. Even though we live in a time when people can skip ads, block ads, and avoid ads.

While Dollar Shave Club hasn’t killed Gillette’s Goliath it sure made Goliath sweat.That’s the power of a brand that knows how to market to consumers.

According to one study 83% of people agree with the statement that “Not all ads are bad, but I want to filter out the really obnoxious ones.”177% agree with the statement “I wish there were a way to ad-filter instead of ad-block completely.”

I’ve seen in our own campaigns (at Epic Signal) that consumers are willing to engage if the content is relevant to them. We’ve seen 10-15 minute long pieces of branded content generate 75% completion rates.

In our most recent campaign with Boost Mobile, we integrated digital influencers into the above the line campaign and paid social and as a result were able to reduce their previous cost per acquisition by 50%.

With some of the work we did with Starbucks Doubleshot we saw thousands of consumers engage with positive sentiment saying things like ‘thanks’ for the content, that it was ‘inspiring’. We’ve generated hundreds of millions of earned media views, and generated engagement rates more than 10X that of most branded/advertising content.

So, while people don’t watch (most ads), its clear that it is not the case for everyone and it certainly is not because we’ve all got some goldfish sized attention spans or have ADD.

Shitty ads are keeping consumers away.

Most Fortune 500 brands haven’t had the same success as us, at Epic Signal, or Dollar Shave Club and haven’t adapted to the times. Marc Pritchard, CMO of P & G was quoted as saying:

“We stopped wasting money on 30-second ads, and we’re designing ads to work in 2 seconds,” and that, “this raises a deeper question. Looking at it through the lens of the consumer, how valuable are these ads? For example, people use social media to share things about their lives with each other. And let’s face it, ads are annoying in that context. Bottom line, it is time for marketers and tech companies to solve the problem of annoying ads and make the ad experience better for consumers.”

So what, does it take to be successful and get people to engage with your content for more than two seconds and solve the problem of annoying ads?

I see the solve as a three phased approach for each brand:

• Listening
• Relevancy
• Optimization

LISTENING
The consumers are already out there. They’re discussing what they love about the brand, they’re interests, who they follow – they’re likes, dislikes, etc. Marketers need to social listening tools and get granular with their consumers and understand them deeply. If you can’t develop a clear picture of who they are, you’re going to lose – because as the old marketing saying goes if you market to everyone you market to no one.

RELEVANCY
After listening to your audience, you can create custom content for them.

Produce something that speaks to specific audience verticals, interests, and passions –you want to be specific and targeted in your approach – the beauty of social media is how granular and targeted you can be. Creative does not need to be one size fits all anymore. For example If you’re Levi’s you can push your campaign to a rock and roll crowd, hipsters, fashionistas, men, women, parents… the list goes on. So why not create custom creative for each of these subverticals? When overlaying specific creative with targeted ads you’re message becomes exponentially more impactful.

Oftentimes, a great hack to know you’re creating relevant creative is to collaborate with digital influencers with built-in followings that overlap with your target.

OPTIMIZE AND ITERATE
Lastly – the great thing about digital advertising is you get feedback instantly. Take advantage of this.

You can launch a campaign then iterate to make it better over time. Simple tweaks of copy, or imagery, or alternative edits can make the difference between a mediocre campaign with wasted media spend and a truly great campaign.

None of this stuff is rocket science. However, most large brands have massive agencies working on their business that aren’t willing to adapt to the times and most brands aren’t able to work outside those relationships, and/or don’t know what to ask for to get the results they need.

Until brands and agencies can learn to be more efficient and adapt to the new landscape – and really embrace integration of media and creative, optimizing for performance, and influencer marketing they simply will not improve.

 We covered a number of topics including:

• How Youtube’s relationship with creators has evolved
• The massive growth of the YouTube partner program
• YouTube’s relationship with MCN’s

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

———

A lot of people are confused about how hands-on YouTube does and does not want to be with creators. How hands on are they?

There were three critical moments in YouTube’s approach to creator relationships. Pre-2010, there weren’t too many interactions with creators.

2012 was a pivotal time. It’s when brands started to seriously invest into digital media, MCNs started to gain legitimacy, and YouTube made a million different bets and hundreds of millions of dollars. It was like, “We want to enable these YouTube-enabled businesses, we are fine with people intermediating.”

2014 and 2015 was the most material shift, where YouTube was like: “Holy shit, we are losing the thing that made us special and we will put humans as well as dollars behind getting that relationship back.”

So that’s where they are now. YouTube is on the defensive because a) they’re saying that because of MCNs, agents and managers have been further intermediated, and b) they’re nervous because of competing platforms like Facebook Video.

Going to the MCNs, what sparked you guys jumping in to address the affiliate and the managed?

The origin of direct and manage came from naturally the evolution of the MCNs.

MCNs were born out of feature arbitration. The partner program was important at the time because not only could you monetize, but you would also agree on certain features like custom thumbnails and custom banners. In the early days if you weren’t one of the YouTubers hand selected by YouTube to be a part of the partner program then you had to join MCNs to get these things.

This is the house that divided YouTube, where half of us were pro-creator. The other half was like: “No, we actually need to enable these MCNs to continue to thrive.” But if you look at the numbers it wouldn’t have mattered. Maker Studios would love to believe that they hold 10 percent of traffic for YouTube globally. They don’t, it’s less than two percent. If they left, they wouldn’t do shit.

Was there pressure within YouTube to kind of prop up the MCNs to a certain extent?

In a way. We got rid of their ability to feature arbitrage and were forced to create real value-added services. This is when you start to see them invest in real sales team, production houses and so forth. It’s because we forced their hand. Because we took their dependency on shit they should have never depended on.

Do you think they’ve done enough to provide value to creators?

It depends. For the larger ones that are highly scaled, do they provide the value they should? No. They never have. Talk to any creator and you will get that response.

My thoughts on MCNs are generally negative. It’s a questionable value they provide across the board, certainly on ongoing basis. In my opinion, all of them were saved by the big media companies who needed a digital play and just don’t understand shit. But, am I happy, in hindsight, that they did exist in some fashion and that we are validated…yeah. It was worth it. But do I think they are useful, in reality? No.

Could you talk at all about the growth of the partner program?

Initially the partner program was small – an ever growing group of hand selected creators. In 2011, we took it from 33 thousand people to 4 million. Now, when you fast forward to today, the partner program doesn’t really exist. And that’s by design. We made a super-conscious decision to move away from the notion of partner because it was brand inconsistent with YouTube, and we didn’t philosophically like the idea of a non-democratic platform.

We wanted to enable anyone to turn creativity into a career. And what that practically meant is anyone can use certain features and programs, anyone can have a deep relationship with YouTube, depending on performance. It wasn’t demarcated by the relationship you have with your MCN or otherwise.

We did this to scale monetization and as a result brought in 50 percent more revenue. Even though most of the channels we enabled monetization for were tiny, it mattered because of how big the platform is.

When YouTube opened up the partner program to the masses did CPM’s lower?

The CPM’s did start lowering. However, around that time another factor came into the picture that had a way bigger impact on the creator’s bottom lines.

In 2012 we launched Watch Time as guiding algorithm of YouTube. As a result, a lot of people who did click-baity stuff suffered. I remember overnight a lot of channels lost 50% of their viewership.

What was the impact of the Partner Program to YouTube’s bottom line?

By opening up monetization to more and more people YouTube has generated billions in revenue. In 2011, after we began scaling the partner program, we grew revenue 50%. This was in spite of the fact that most of the channels we enabled monetization for were tiny. That’s how big the platform was (and is today).

The addition of monetization of more of the long-tail helped us generate $400 million dollars, which that year, in 2011, was a third of all of YouTube’s revenue.

We covered a number of topics including:
– YouTube’s $100 million channel initiative breathed life into MCN’s
– MCN’s making money off clueless talent
– That MCN’s exploited talent early on and have to evolve

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

What was it like when you were starting out and finding new talent?

I started back in 2010 – I was working in network TV and producing some digital content. I had some insight to how powerful it could be, but it wasn’t something people took seriously yet. A friend had suggested that I would be good in the YouTube space. At the time it felt almost fake or scammy. I thought,  “What do you build with a YouTube star? How do you make money off that?” The partner program was super new and selective — it was invitation only.

“Viral videos” were still a real thing – it was a very different time then.

What was it like when you founded your MCN?

Originally, we were strictly a talent management company. Nine or ten months after launching our company, people were knocking on our door trying to figure out how to get in, either as executives or investors. Everything really started to take off when there was this $100 million original channel initiative – where YouTube funded original content. We saw this investment happen, people were approaching us, and we understood things were going to accelerate fast. We needed to figure out how to stay ahead, to scale our business and compete.

As MCN’s have scaled – how has the relationship with talent changed?

I’m not a fan of management companies being owned and operated by networks. It’s like the old Hollywood studio system, people are getting screwed. You get the talent young and put them in a crazy contract for two years, and if they explode, then you’re there for the ride. You didn’t have to do anything.

Some of the bigger MCNs have become so massive there’s no way they are properly servicing their signed creators.  In early 2012, most of the networks were super focused and creators were looking for a place to call home  YouTube did not yet have a YouTube Space or really any formal creators team or production team, at that time networks swooped in and started signing up talent.  Back then, creators were just looking for basic things like management and advice.  So when these networks reached out and offered some service (even with no proof or credibility) many creators flattered and excited signed up without understanding what they were really signing up for.

There are creators who signed up for an MCN several years ago, but didn’t know what they signed up for..  It’s almost the same as how AOL will make millions of dollars off of people who are still signed to AOL dial up, even though there are clearly much better options out there and they have become pretty much irrelevant in that regard.

What does the industry need?

Some creators get big so fast while they’re still young. When you are just starting off, that’s when you come across scammy companies that screw you over. If you are coming up and that’s your first experience it’s going to make you paranoid. All because some email came in your inbox like, “This seems credible.” There are 16 year old kids who have never even had a summer job before… They likely do not have the knowledge or guidance to figure out who to partner with or when to say no.

We need conversations like: What resources do creators have to protect themselves? Who do they trust? Who is a credible source? The industry needs that credible, completely independent resource for creators. It would be helpful to come up with, like, the five things MCNs need to do. Number one is transparency with their earnings and where that money is coming from.  So many networks add no value to pre-roll. Creators need to know how the money is being generated.

I think Hank and John Green’s The Guild may help with a lot of this.

Is it harder for creators to make money on YouTube?

It’s more competitive, and it’s a more saturated market. There used to be creators who could work the system, to get to the front page — boom, they made their $5,000. Not anymore. It’s much harder to game the system, but YouTube has gamed it for themselves. There are a few creators that they heavily promote, maybe with commercials or recommended tabs, just these five people Youtube wants you to watch and make into stars.

There are definitely creators who are YouTube darlings – they aren’t that relevant anymore (they don’t have big audiences like they used to) but YouTube still always hast them at the events, on panels, getting write ups. I think that it’s a little bit of legacy thing. They’re pushing the idea that the darlings are still relevant, but really, they’re not.

I will say there are a lot more ad dollars being shifted into the eco-system which is a great.  But, we need to continue as an industry to question what is valuable and the market value.  Is it views?  What if they are not organic?  Is it content quality? Is it access to eyeballs that will convert to purchases?  Not every view is created equal… we need to continue to push to the forefront the most valuable assets in our industry so that we can continue to evolve.

What’s the role of MCN’s now and in the future?

MCNs have done a really good job of creating and pushing this idea that they are needed in the space — that’s literally what they do. They’re marketing themselves to the brands and ad agencies and as a result they’re generating deals.

In five years, many MCNs will still be around, but it’s going to continue to become far more competitive. We’re seeing more focused networks pop up, and established companies come into the space. MCNs might transform to become focused businesses. Maybe you’ll have companies that become agencies, then become production companies, then become… whatever.

I never would have thought we’d be where we are today. I genuinely thought that there was  going be a revolt against MCN’s by the top creators. Most networks built their brands on the backs of creators – and many exploited some people early on.  That being said, YouTube has stepped up to created some systems to flag exploitation.

The short term goal for many of the MCNs was to aggregate as many views as possible and sell.  Now that the excitement and novelty is starting to ware off, many of the independent (and even acquired) MCNs are forced to figure out a sustainable business.  

We covered a number of topics including:
– The early days of YouTube MCN’s and signing creators
– How the relationship with MCN’s and creators has evolved
– How Hollywood’s influence is killing creativity on YouTube
– How money and success can negatively impact on creators

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

———-
What were the early days of MCN’s like when you were starting out?

Acquisition and signing was always my thing. But when I joined an MCN, there was really no book for it. We figured it all out by diving into the [Youtube] CMS.

We started scaling like crazy when we realized there was a very profitable segment of the business nobody was going after. There was this mid and long tail group of creators that were largely neglected – there was no clear pathway to monetization. It left us open to pick who we wanted and say: we want to work with you.

How have things at MCN’s changed?

After monetization opened up for everybody and our whole business shifted — we realized we had to start figuring out real value. At that time, it was all about digital growth. We were interested in social media economics, what makes a YouTuber grow, and a lot of it was education. We weren’t burdened by transactions.

Transactions make you a little dumb with digital. It’s a narrow focus: the brand is asking for this. You don’t really learn anything. But when all you have is, “I need to turn this person’s 10,000 subscribers into 500,000 subscribers,” — then every trick in the book that you learn, you’re going to a partner like, “Let’s try it.” It was a scrappy time, but I think there’s a need for it to come back. Transactional doesn’t grow you on that level — when it’s just money, it distracts and detracts from innovative growth.

What’s the focus for most creators today?

Most creators joining MCNs will say, “I just want sales deals,” when they have less than 100,000 subscribers. At that point you should be focused on digital growth, sales isn’t going to do much for you. You spend your time trying to figure out how to get that thousand-dollar deal or you spend your time growing, so you can have a ten-thousand-dollar deal.

Frankly, the best kind of development you can do is developing your own brand — that’s where the real money is. How do you have a fanbase that’s meaningful and will follow you, so you can move around? How do you build content that people care about? The smart creators are the ones that are able to develop their IP in such a way that it’s something that can extend beyond themselves.

What’s your perspective on the explosion of MCNs signing creators?

I can track it back to one YouTube launch of a feature in the CMS. Before, the way you invited channels was super manual. It was an incredible burden to get a single channel in and half the time they’d be rejected, for God-knows-what reason. In 2013 YouTube started the roll up tool, so you can invite dozens of channels at once. Things just exploded.

How did things evolve after that, with you and your competition?

It quickly became clear who was winning, and who the targets were. Every second that people on channel partnership teams were working meant big money. We knew the land grab was going to be over quickly. Creators started taking notice, and signing bonuses and minimum sales guarantees came into play. MCNs took deals they knew would lose money just to build their profile and value. In this second wave, MCNs became focused on revenue, not “This person’s cool, I want to work with him. Maybe he’ll be the next big star.”

The third wave of MCNs is when acquisitions started: Maker got bought for a billion dollars. You started juicing up your enterprise value to sell for as much as possible. Digital people got a crash course in the corporate world — it was an interesting time. We had already recognized the market opportunity, now we had to identify what the next evolution of MCNs would be.

What’s the thing you want people to be talking about, but they aren’t talking about?

The one thing that keeps me up at night is Hollywood influence coming into digital. It’s killing creativity on the platform — since it started, content has gotten worse. For creators who’ve gone to premium platforms, there’s this reaction from fans: “We liked you for what you were doing, why are you trying to do this other thing?” The idea of making fans pay for that, when the best version of you is free? When people talk about premium digital content, my stomach hurts.

The reason I started in digital is this: I believe in the democratization of media and in building an entertainment middle class. I hate gatekeepers, I like creators having control. People have the idea that if something has more money and people behind it, it’ll be better. I inherently disagree.

I’m interested in the weirdos creating stuff that revolutionizes audiovisual art and makes us think a different way, not the people who are playing the game, working the system, being super brand-friendly. It makes me sad that content is losing out in the algorithm. YouTube used to be for the outcasts, and I want it to be punk again.

What’s the next evolution of MCNs and creators?

There’s three different groups. First, the people building their own platforms, using the influence of their creators. Second, there’s some positioning themselves as digital marketing agencies with media sales, influencer stuff. They recognize that the most important value is in access to creators. And there’s MCNs building out other types of businesses—TV shows, movies, games—which they co-own with creators.

One type of MCN is not being addressed as much—this goes back to the idea of building the entertainment middle class—it’s the one reinforcing education on digital platforms. It’s finding new, interesting opportunities for YouTubers making $10,000 a year to go full time. Nobody’s focusing there, and there’s a lot of room for MCNs to fit into that market and add a lot of value. The original vision was figuring out how you grow talent in your network. Even though every major MCN has lost that vision, it’s still valid. I hope to see a lot more of it.

What’s your perception of creators these days?

I’ve worked with multimillionaires from YouTube, and they’ve earned every penny of it. To get that audience behind you is winning the lottery. When you post that first video, you don’t know if it’s going to get ten views or a million. Every time you do that, you buy a lottery ticket. But once Youtubers go from making nothing to making millions… once all the money’s at play, it adds a lot of pressure to something that was fun. Money doesn’t make people happier — fIfty percent of the time, I’d say it makes them sadder.

Why didn’t you change with it?

In a recent interview with Business Insider Sir John Hegarty, the accomplished, celebrated founder of Bartle Bogle Hegarty, stated that people don’t remember compelling web content. “Can anybody tell me, in the last 10 years, a piece of content that people remember and can quote back?” he asks, before invoking Purina’s ”Puppyhood” video with BuzzFeed as a negative: “Nobody I’ve ever spoken to has ever said: ‘Have you seen the BuzzFeed puppy?'”

I asked my animal-loving sister and a few friends who are pet owners for their own favorites — they all named the puppy video, remembering it with a laugh. And why shouldn’t they? As people who are perpetually in the market for pet food, the video was made exactly for them. With 30 trillion Google AdWords impressions being served, 303 million tweets composed, and 351 million Facebook status updates being written every single day, we live in a world where niche, hyper-relevant content is shot at us from everywhere.

One statistic ought to excite brands more than any other. There are 400 hours of video uploaded to YouTube every minute.

John. People love the BuzzFeed puppy. You’re a British advertising veteran, having joined the industry in the 1960s to build brands such as Levi’s and Audi by way of ads on traditional media that are still instantly recognizable decades later. You’ve left your mark on our industry. But you seem to think we live in a time 20 to 30 years ago before social and digital upended the entire advertising model.

Those conversations about the BuzzFeed puppy, and countless other social campaigns are happening, but they’re eluding Sir John entirely. Just because he’s not seeing them doesn’t mean they don’t exist and are not impactful.

I am the founder of a social agency, Epic Signal, my bias is obvious: social media and influencer marketing are pillars of my business.  That said, I can’t help but feel John is out of touch with the realities of business today. According to him, he doesn’t “get out of bed for less than a million [impressions]”.

In today’s hyper-fragmented media landscape – a million impressions is nothing to scoff at – especially if you can drive real engagement. With digital and social, brand messages can to be tailored to smaller but more relevant niches more easily than ever before. It’s quite unlike a bygone era when three major TV networks forced dumb commercials down everyone’s throats. Nowadays, people can pay for ad-free subscription services, pirate content for free, or simply install AdBlock. We are never actually obligated to sit through an advertisement.

The democratization of media means almost anyone could do Hegarty’s job, and a lot of them already are. Independent YouTube creators are eight of the top 10 most recognizable celebrities among teens today, and there are a ton of creators who have built up consequential brands of their own, making a living by selling their own merch and content directly to their fans. Such YouTube stars create ads for brands and earn millions in the process; they are the producer and distributor rolled into one. When a brand can partner with the right creators, their message can make a huge impact.

So let it be known that Sir John Hegarty has announced his new status as dinosaur of our industry by turning his back on the significant opportunities waiting for brands on the digital front. After all, do you think people are going to watch more or less online video in the future?

If I was a client of John’s trying to reach younger consumers John’s comments would certainly give me pause.

My latest interviewee is a YouTuber and director, he was among the earliest to adopt the platform and has been posting his videos online since before YouTube even launched.

Some of the highlights from our interview include:
– What the early days (ie 2006) of YouTube were like
– Why it’s best to use YouTube to build a career off platform
– What it was like being an early employee at an MCN

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

You were among the first crop of creators on YouTube to actually build a following, back in 2006. How did you get into it? What was your very first video?

Well, my friends and I, we all took drama class together and started making videos together before YouTube existed.

So when YouTube came around, we decided to start posting there. And honestly it was slow for all of us at first.

What was YouTube like back then?

In the early days of YouTube the popular videos were lip-syncing videos or people that did their own parody songs. That was the big first thing on YouTube. You do one of those and doing well on YouTube.

YouTube was never supposed to be anything but fun. It wasn’t even supposed to be a launchpad for a career, which it ended up being (I always wanted to make movies).

You had one of the earliest ‘viral hits’, what was that like?

Well, when we first uploaded [Redacted – name of video] no one really cared.

It was probably up for a month before it got big, and then [Redacted – name of site] featured it, and just like that it was literally overnight. We went from nothing to millions of views.

How did that hit impact things for you and your friends?

So that landed me a meeting with pretty much every single major studio. It landed me meetings with Warner Brothers and Paramount. Everywhere.

But, this was 2006. It’s not like now where you can just take whatever you learn on YouTube and transfer it to some other medium and people understand the business and are ready to cut checks. People didn’t know what they were doing yet.

I had all these meetings and they weren’t quite sure what to do with me. I did get a small production budget from one of the traditional studies and got to direct, but that didn’t quite pay the bills so I went back to YouTube.

Were you guys making any money back then or was this all for fun?

When we started there was no partner program, so there really wasn’t a future, we weren’t making any money. There was no possibility of even thinking about making money on YouTube.

Companies didn’t know what to do with YouTubers.

Now companies, they’ll start you off with a Web series and the start to build you from there. We’ll do a Web series, we’ll put it on YouTube, and maybe we’ll build from there, do a Netflix series or a Yahoo series.

I started getting offers to do random Web commercials, and I did a bunch of them to help pay the bills.

All the friends you started with have gone on to be among the most famous YouTubers out there. How has your relationship with them evolved or changed?

I remember when they all really just started blowing up. They were focusing on their channels and developing their personas, and then almost out of nowhere there’d be people showing up on set (or wherever we were filming) just to meet these guys. It was a really weird transition.

Luckily we’ve stayed close and no one developed crazy ego’s, but there have been challenges.

It’s hard scheduling stuff  – they’ve gotten more popular and they sometimes are spread a bit thin.

You were with one of the MCN’s in the very beginning, what was that like?

Yeah, after I did some directing for a bit I was hired by [Redacted – Name of MCN].

It was awesome. I was the 15th employee they hired. I was so broke at the time, that I didn’t even have a cell phone, I needed a job and they saw one of my videos the next thing I knew, I was working there.

Over the years stuff started changing, and the company got huge.

When it got big and corporate I started to lose my shit with all the bureaucracy.

Where is YouTube headed?

Back in the day, it felt like YouTube was all about bucking the norm, now it feels like it’s all about keeping with the latest trends. On top of it all everybody and their fucking grandma has a YouTube channel, even if it’s just a YouTube channel where they put random iphone videos.

It’s changed to the point where there’s too much now and it’s hard to comb through it all and find anything good or original.

I think people are just putting out more content, and I think it really started that way because I remember these MCN deals where you would sign up with them and you’d have to put up a minimum amount of minutes of content per month.

No matter who the fuck you are, the audience gets bored and just churning out crap doesn’t help.

So what’s next?

I think there’s just going to be another platform out there, I think something else is going to come out. It’s happened now with Vine and instagram – you saw how those fucking just blew up.

I don’t see YouTube as a place to make money; now I see it more as a launching pad for something else. It’s a great platform to showcase yourself and your work.

How do you recommend people make a living off YouTube these days?

The only way you can really make money off YouTube anymore is with brand deals, because CPM’s are just too low.

In the early days the CPM’s were high – it was probably between $7 and $10. Now it’s averaging about $1.25. Sometimes it goes up to $3, but mostly it’s hovering around $1.25.

If you’re looking to act or direct YouTube comes in handy – everybody now looks at your social media numbers. Everybody looks at the numbers. You want to get an acting gig? They’re going to look at your Twitter followers before they look at how good you are. And I’m seeing that everywhere.

What advice do you have for people looking to get into the space and build a YouTube following?

I talk to colleges all the time and I get that question all the time. I always make a joke and tell them, “be good-looking.” It’s very sad but it’s very true.

There’s really no guarantees in this space. Even if you’re the hottest person in the world, you have the best content, and you’re collaborating with someone like Jenna Marbles, it doesn’t necessarily mean you’re going to blow up.

My latest interviewee for The Confessional is a manager of top YouTube talent. Several of the creator’s in this individuals roster regularly receive tens of millions of YouTube views per month and hundreds of millions per year. In this extensive interview, we discussed the business of YouTube, the goals of this individual’s talent (both on and off YouTube), and the how much money top online video creators are really making. Some of the major points we covered include:

• SVOD and YouTube competitors
• YouTubers ‘making it’ on televisions
• YouTuber revenue streams
• How much money his top creators are making in a year
• How creators can better work with brands and vice versa

(Editor’s Note: The following interview has been edited and condensed for clarity.)

All the big platforms are going to continue to grow as marketplaces, both for integrations and for original content. I foresee Facebook developing its own YouTube Red, and Facebook developing content that they own. Netflix is going to open its doors to YouTube creators because these people are proven at driving digital audiences. People with a track record of driving digital audiences are going to have more and more opportunities, on platforms such as Amazon, Hulu, Go90, and Netflix. That’s where I see big opportunities in the near future.

You’re in a unique position in that you’re seeing both brand deals and entertainment deals. Do you want to talk a little bit about the SVOD deals that you’re seeing?

YouTube Red budgets are very legitimate. And they’re going to be producing really great content. They’re enabling people with creative visions who started out on YouTube to do what they want to do. I think they’ve got a strong chance of succeeding. However, Google is a search company at its core, not an entertainment company, and they’ve stumbled so many times when they’ve tried to dabble in content and entertainment. Like when they gave $100 million out to all those different players, they told them to create YouTube channels and they all kind of fizzled. I feel like that might happen again. If they really want to spend the money then they might as well do it right and buy a proven player like Netflix to be their equivalent of YouTube red. Then they could integrate Netflix into the Google ecosystem.

We got offers from Vessel, but I brought those offers to YouTube and got YouTube to pay us to keep uploading on YouTube first. Facebook has been reaching out and having soft conversations – but they’re not shelling out money for content the way Vessel and YouTube are. At least not yet.

Is the talent you manage interested in making the leap from digital to traditional media? Do they want a TV deal?

Yeah, several of the talent I work with want a TV show. They came out here to be in traditional entertainment and that’s their end game. However, that’s really not the case for everyone I work with. Some of them want to focus exclusively on YouTube. Several of them think YouTube is the holy grail. It’s a platform that’s internationally accessible and free and reaches a massive audience, and you can shop on it. You can talk about a product, put the link in the description, and somebody can click on that link and buy it. There is so little friction between consumer and the product via YouTube.

How are the conversations with TV networks being received so far?

We haven’t sold a show yet, but there are a lot of conversations. The fact that these creators have this loyal and engaged audience, that’s very appealing to the network executives. Broad City started as a YouTube show, Justin Bieber started on YouTube, Workaholics started on YouTube, and Garfunkel and Oates started on YouTube. There are enough case studies at this point of individuals and shows that have moved from the web to TV. But even people who’ve been in the TV game a long time and are really great at it, it’s still like a tough game.

Kurt Sutter, who Sons of Anarchy, just got his show cancelled. He worked on The Sopranos, then The Shield, then Sons of Anarchy. He just started a new show. It was called The Executioner’s Son and it was cancelled after a few months. TV is a tough, tough business. And so, yes my creators have big audiences, but like it’s still a business that you have to try your ass off to get into.

Do your talent want to maintain a YouTube presence even if they get a TV show?

Definitely. They never want to totally abandon YouTube. That is like the kiss of death, if you just abandon your YouTube channel. You’ve got to nourish that audience.

What do you think went wrong with Grace Helbig’s show? That was so short-lived.

If you’re taking somebody from YouTube, where a big portion of the audience may be international or not even have a cable subscription, and then you’re expecting all that audience to magically appear on an antiquated delivery system, then you might be left disappointed.

What kind of revenue are your creators generating in a year?

Maybe like $500,000 to $1 million per creator. My top 5 are generating that much revenue. Of the ten talent I work closely with, I’d say the average is probably $400,000 per year.

Where are your creators generating their revenue? Are there any revenue streams that are working well that you think most people don’t know about?

Merchandise. If you broke down most of my talent’s revenue it’s probably a third adsense, a third brand integrations, and a third merchandise.

What you do think about people who hate on the YouTube stars and say they don’t deserve all the money they’re making?

I look at television at something like Real Housewives. To buy airtime on Real Housewives you’re going to be spending $300,000 for 30 seconds. Is that highly crafted, premium content? Did those people go to acting school or do they have years of theater experience before they were on camera? No. They’re just shows where you just have random people doing their thing. Duck Dynasty has probably one of the most expensive ad blocks on television for years, and this is a random hillbilly family in Louisiana. What do they do that’s so special? So, all of a sudden because somebody’s on a smaller screen and not backed by a TV network they’re not worth those same financial and brand opportunities?

One of the things I’ve heard a lot from creators is “Brands don’t get it!” Often times I agree, but not always. But, on the flipside, do the YouTube creators “Get it”?

Creators have to understand that the moment they take money from somebody you’re going to have to make some compromises. They have to be respectful of what the objectives of the campaign are and how they’re going to achieve them. If you want to play at a higher level, then you have to elevate your game entirely. And that means how you listen to people. You have to be mindful of how you speak to people, how you execute on things. You’ve gotten to a certain point, but if you want to continue then you’re going to need to adapt. A perspective shift is healthy. If you are comfortable with complacency, then you’re not the creator you think you are and you’re not going to be the creator you want to be.

The major points of our interview transcript include:

•           – Why YouTube created MCN’s and how they’ve evolved
•           – Why creators often sign with MCN’s
•           – How brands should work with creators

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

Coming from the MCN side of the equation – what was it like working with the brands, the creators, the agencies? What worked and what didn’t?

My understanding of the MCN industry is that Google created it as a way to help produce better quality content and help support creators. It’s largely populated with people who are coming from the talent side of the equation versus the advertising agency side or the technology side.

The biggest challenge is that the industry is new, so the norms have not been defined clearly. You have the MCNs, you have the agencies, and I’m saying “talent agencies,” like WME and CAA. You have the advertising agencies. You have managers. You have creators.

You have a lot more inputs to that equation than what you had back in the old television days. All those inputs and all these people who think that they have a role in the equation make it complicated to establish any real norms, or rules of engagement, metrics, and ways of doing business.

The players have not clearly defined their roles, and because of this everybody is running towards every opportunity. And that causes murkiness. That causes aggravation. It causes the true value of influencer to be masked because of the immense amount of waste of people’s time to get to the bottom line.

So, depending on your entry point you could end up with a very different deal?

Right, and just to focus on the MCN part of it, one of the big problems with MCNs is that they don’t harken back to their mission. Basically their mission was not defined by themselves.

Their mission was defined by Google and it is to add value. That’s ambiguous, but you could say there’s three places that MCNs could add value.Very few are doing this. You could say ad agencies and talent agencies could do two out of three of these easily. 

•       – By growing views & subscribers
•       – Providing business and/or production support
•       – Growing revenue

So, it’s important for MCN’s to be doing something different – creating technology, interesting integrations with available APIs etc.  Because you want to differentiate yourself and if you want an acquisition it’s good to own IP or unique processes .

Even if a creator is signed to an agreement, then at some point that creator’s going to want to get out of that agreement or that agreement’s going to expire. That’s not something other companies really want to invest in because you can go and hire talent.  This is the secret many in Hollywood do not want you to know, talent will “go” with almost anyone who is creating interesting stories, product, services.  The challenge is managing the workflow.  A lot of brands have success working directly with talent.

Anybody can hire your talent. That’s something people forget.

So, what’s the future of MCN’s?

It’s hard to build a product in technology that is actually going to be used by creators, but that’s the need.

We should be more focused on technology to help channels grow.

My classic example is Brendan’s Omelet Channel and my Crêpe Channel, and your handler at the MCN says, “Hey, Brendan. There’s this guy who’s making omelets and you’re making crêpes and you basically have the same audience and you’re both releasing videos on Tuesday. Why don’t you switch to Wednesday and point people there to Interviewee’s channel on Tuesday? And he’ll reciprocate and then down the line, let’s see if there’s a collaboration we could do.”

So, that is a perfect example of not only adding value, but growing the network because traffic goes back and forth.  A couple of MCNs have automated this process again points to the power of making great product and/or using technology to add value. More monetization opportunities. That’s an example of a great way an MCN could add value.

What actually happens is that everybody goes running into the space and the investors who put money in go, “Hey, wait a minute. You guys aren’t making any money. You’ve got lots of expenses, but you’re not selling enough.”

So, the MCN’s try and sell more media (not just brand integrations). The problem with that is that that media is already being sold by a person who has a Google business card OR it’s being sold in real time via an exchange.

The largest ad exchange called ADEX, which is part of DoubleClick, which is owned by Google.

By definition, if you have a seat on the exchange, you can buy and sell YouTube inventory. So, you can just go bid on channels in the exchange because there’s not an exclusive. You can get that inventory if you want it and probably pay less than what the Google salesperson is selling it for if you buy it via the exchange.

So that’s a challenge for MCN’s. Any savvy media agency is going to know that they can buy inventory via an exchange. They have a trading desk.

That is a perfect example of how an MCN fails because an MCN goes to try and sell more media, which isn’t really working because of the exchanges. And, as a result, helping to grow their audiences is falling by the wayside.

Why would the MCN’s sell media? Forget about that the exchange even exists – there are hundreds of Google salespeople crawling over every agency with piles of data. You can’t compete with that nor should you.

They [MCN’s] are just not going to sell the media. They’re not going to get the price that they want. And, the customers don’t want to buy their media because they’re able to get it already and from a cheaper source.

So, how were you guys actually adding value to creators?

Every channel, as part of our agreement would get optimized. We were trying to create technology to solve this, so that it wouldn’t become such a manual process.

You really need a technical understanding of what the Internet and in particular YouTube is…how it works. If you don’t understand the technical intricacies or the map of how to navigate this web, you basically won’t get the views that you need for free via SEO. And that is, once again, a point where MCNs have failed, where they don’t offer leadership. They don’t offer enough of those services.

I’m proud that we offered that. I think most MCN’s just made a lot of promises, and were just casting a wide net and pulling channels in as fast as they could without actually delivering much value.

There’s a lot of name dropping and that’s like heroine to a lot of young creators. They want to work with the big names or go to Hollywood and that’s what sucks them in. They have a little success and they think they’re going to be on CSI. That’s it. They’re just like, “Oh, my God, Hollywood. I’m doing this. Yeah.”

Let’s transition to the advertising side of things. Do you feel brands are doing enough to capitalize on this space?

What’s happening now is that MCNs, advertising agencies, talent agencies, and creators themselves are making it very difficult for a brand to figure out how to get from A to B.

I think that brands over a certain size…let’s say, if you have over $50 million in gross sales per year, they should be interacting with influencers and creating content directly.

And when I say “directly,” I meant they shouldn’t be going down the chain, the digital agency goes to MCN, who goes to the manager, who goes to so and so and then finally goes to the creator who comes up with the idea. That needs to stop.

There’s no reason to have that kind of expense. The whole thing about the Internet is that it removes layers, so you can have more direct control and access and that usually means you save money and you can do things quicker. And that’s what should be happening in 2015.

It should be, “Decide, create, deploy, measure.” And then you just keep doing it.

In terms of execution, there’s always tension between the creator and the brand. What do you think is the best way to navigate that?

Well, that’s called “creative tension” and that’s something that has existed since day one. And it exists in the writers’ room. It exists on the set.

When Martin Scorsese or Francis Ford Coppola is yelling at you and Marlon Brando in “Apocalypse Now” to act a certain way.  It exists everywhere. So, I think people are just basically fucking idiots if they don’t understand that.

But you have to set and control expectations. My rule is early, loud and often. You over-communicate to ensure everyone’s on the same page throughout the process.

What advice do you have for those working in the space?

I don’t care what anybody says. This is goddamn 2016.

There is so much talent, out there.  If someone’s an asshole and difficult to work with.  Guess what. You can find somebody else just as good. I’m not saying it’s going to be easy, but you can find somebody.