He helped demystified a lot my preconceived notions on the state of MCN’s, their businesses, intents and roles. Some of the big takeaways/highlights of our conversation include:
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.
In your experience, you being on the MCN inside, what’s it like working with brands, creators, and agencies?
Oddly enough, brands out of that group are the easiest to work with. I feel like if you’re in a position where you’re lucky enough to work with someone at a brand directly, that’s usually a pretty intelligent person at the brand.
In most cases, the brand people trust a little more. Maybe that’s because, unlike an agency, they’re not a middle man and they don’t have people pressuring them from both sides. So the brand sometimes is better about trusting the process.
Agencies, because of the fact they’re in this proxy position, are generally more concerned about the financials of everything. They care about the eCPM, they care about building up the media plan. And, more than anything they care about positioning the influencer marketing campaign within the narrative of the campaign direction they sold through to the brand.
As a result, you have agencies that really put the screws to the publishers and to the talent. I think this is because agencies pitch themselves to brands as the experts. They want to always be the strategic engine behind a campaign.
I worked at an agency before. It’s a pretty entitled position to be in. You have the checkbook, so you think that you can boss these publishers around, and in a big way, you can.
You’ve mostly been talking about media agencies. What is the distinction you would make between creative and media agencies?
When working with creative agencies, it can potentially be more combative and there can be more friction.
The logical conclusion of working with influencers is that they’re creating the content. That is what the creative agencies have been doing for years and years. Now obviously, the content that a YouTuber is creating doesn’t necessarily have the same production value of something produced by a big agency, but as technology gets better, the equipment that creators are using as they are maturing is getting better, their storytelling is maturing, that delta is closing.
The MCNs are saying that brands should be using influencers for their branded content, as opposed to the well-produced content that’s historically been created. So I could see why creative agencies would be a little scared or protective of their role.
Can you talk a bit about the layers involved in deals? What’s the role of the MCN’s and where you see them fitting in?
To be clear, I don’t think all the layers are unnecessary. I think managers offer a real value to creators. A lot of these creators, they are creative. They are filmmakers. they’re not business people, they’re not salespeople. They’re not super organized.
They need the support of accounting, and legal, and all that managers and lawyers and agents can offer. I think MCNs can offer a valuable layer in acting as a middle-man between the creators and brands.
In an ideal world, brands would know who they want to work with. They would go to the creator or creator’s management directly. The creator would get their shit done on time and to the brand’s specifications and timelines, but you and I have worked in this business long enough to know that that almost never happens.
The MCNs are a nice operational layer in the middle to help facilitate work. Maybe, as the industries get more mature, the need for that operational layer will be diminished, as creators start thinking more like business people and they understand that if they continually miss deadlines, brands aren’t going to want to work with them anymore. A lot of them understand that, but a lot of them don’t.
As more creators start thinking like businesses, and maybe even building teams around themselves, they’ll realize that an MCN might not be necessary. On the other hand, as brands and agencies start knowing more about the industry and who they want to work with, they have a better understanding of the nuances.
I’ve always liked the comparison that MCNs are a lot like record companies, or at least what record companies used to be.
You may get to a point where you have some MCNs who have such a strong or specific point of view and taste to be able to have the caché of something like a Sub Pop Records or Matador– these labels that have done such a good job curating stuff that fans trust them. It’s like, “Yo, I’ve never heard of this new band, but they’re on Sub Pop, and I love everything that Sub Pop does, therefore I’m gonna explore and experiment with this band.”
I think Tastemade and Whistle Sports are like that because they’re just so specific and have a defined point of view.
I see companies like Fullscreen and Maker almost like the EMI or the Universal Music Group of the world, where nobody really knows or cares who’s on Atlantic versus Elektra versus Columbia. These are like big, faceless, holding companies.
You said MCNs are currently acting like a middleman between creators and brands, but oftentimes creators work with brands directly or their managers do the deals. In those scenarios, what role is the MCN playing?
I imagine more of that is going to happen, as I said, as the two sides of the equation — brands and creators — start maturing and learning more about each other. To go along with the record label analogy, I think you’re going to see a lot more creators hiring their own small teams run their businesses instead of going with a label. You saw the same thing with the music business.
PewDiePie doesn’t need an MCN. He’s got enough money to hire his own social media person, his own licensing person, his own distribution person. Obviously not everyone can do that. It goes to the idea like when Radiohead put out their album for free, people were like, “Yeah, that’s great for Radiohead,” but there’s some things that an MCN still can do that individual creators don’t have the power or connections or money to do.
But, I bet PewDiePie can get a much better social media person by hiring them directly than by paying his MCN providing one. So, really, the top-tier creators are going to be more laser-focused in hiring their own staff.
Creators don’t need an MCN when they have smart people working for them.
There’s a lot of misconceptions around what people perceive the MCNs do and what they actually do. What do you think is the biggest misperception?
I think it’s a lot like record labels again, where you have the creators, who are similar to bands, and they’re like, “This label is doing nothing for me. They’re taking my money. They’re not giving me an advance and then I’m never going to recoup the costs. I’m never going to see a dime.”
You see that same kind of conversations happening around MCNs. You have creators who say, “Hey, I’m giving you anywhere from 0-30% of my ad revenue, are you giving me that value in return?” A lot of creators don’t feel like they’re getting that value in return,
But I also think that creators often don’t understand the challenges that MCNs go through. When you’re a creator of 5,000 subscribers, it’s not realistic to expect that you’re going to get a two hundred thousand dollar Ford deal.
In my experience working at two MCNs, everyone that I run into generally wants to do right by creators and make that value proposition worth it to the creators. I think when creators don’t feel like they’re getting enough value, it’s a result of a lack of execution, not necessarily a lack of empathy or a lack of interest.
So we’ve talked about the perceived misconceptions between creators and MCN’s. What about the perceived misconceptions of MCN’s buy brands and agencies?
As I alluded to earlier, I think brands sometimes see MCNs as a necessary evil, a one-stop-shop for building a large program with multiple pieces of talent. You get media thrown in, you get social support thrown in, and I think that makes a lot of sense for brands and agencies that don’t necessarily understand the space very well. They want to just write one check and have the MCN take care of the rest.
Maybe the brand or agency doesn’t have the appetite — sort of going back again to risk tolerance — they don’t have the appetite or the desire to go to three or four different managers and negotiate with each one and do all of that.
But, for really savvy brands and agencies, I don’t really see a need to go to an MCN if you know exactly what you want and you understand that working with talent can be a laborious process and you’re a cool hip brand that gets the space. Because, if a brand knows exactly who they want to work with, they understand what it’s like to work with that creator, there’s no need to pay the MCN Margins.
On the creator side of things, they have come to think MCN’s are the way to get brand deals. Not many creators have sales teams and they aren’t doing outbound outreach to brands and agencies.
The only people that the agencies generally hear from are MCNs. You can sort of understand on both sides (brands and agencies) why they would think they need MCN’s. They’re both getting pitched by the MCNs.
I’d imagine that some brands or agencies think that MCNs are a necessary evil to work with creators – that they wish they could work with creators directly, either to get a better deal or to push the creators to do more work. MCNs often act as a gatekeeper in a sense, where it’s like, “You sign this IO, we’re delivering to the IO, and you’re not getting anything more than that,” and maybe brands and agencies think that if they went to the creators directly, they’d have more leverage or negotiating power. At the end of the day, a lot of brands and agencies aren’t yet sophisticated enough to work with creators or their management teams directly.
]]>At the time, the grants were considered by many to be an attempt on YouTube’s part to bolster its premium content to woo advertisers to the platform.
Now, rather than bring traditional media companies and celebrities into YouTube, YouTube is turning its top creators into celebrities. In order to gain mindshare among advertisers and bring in bigger budgets YouTube has launched an ad campaign dedicated to featuring many of its top creators.
YouTube’s new CEO Susan Wojcicki stated that, “If you look at our top creators, they have a lot of subscribers; it’s all categories like entertainment, health and beauty, food, cooking, and yet I think a lot of times advertisers and users don’t know about these channels.”
Wojcicki’s comments, and YouTube’s evolving tactics, highlight the lack of understanding of the YouTube ecosystem that many advertisers are continuing to face. YouTube has changed the face of media, content, and celebrity but dollars haven’t caught up with the times.
YouTube is wildly popular with Teens and Young adults, and according to a recent study, “74 percent of 14-18 year-olds and 68 percent of 19-24 year-olds in the U.S. use YouTube, which is above Facebook and significantly more than Twitter.”
While ten years ago teens were watching Jon Stewart instead of 60 minutes, this generation is watching Phil DeFranco in favor of Jon Stewart.
So what’s the holdup?
YouTube is doing everything it can to spur adoption of the platform. In many ways Google Preferred is a step back for advertisers. It’s not the best way to buy ads on the platform – in fact, its more than likely worse. However, its clear Google is adapting to advertisers, but advertisers are not adapting to the times.
The Google preferred program is manufactured scarcity. YouTube has rolled up channels, verticalized them, and packaged them to advertisers in a way that makes sense to traditional media buyers. It’s limited inventory (by design), making it feel more akin to TV buying vs digital.
The irony is that with 100 hours of content uploaded each minute, and an audience of over one billion users, there is so much inventory that CPM’s on the platform are in decline. Also, a recent article brought to light the fact that the Google Preferred program is filled with a number of channels that are of dubious quality. In the end, most advertisers would be best served by logging into TrueView and bidding on the open marketplace on an as needed basis (or hiring someone to do this for them).
With YouTube’s glut of inventory and audience, it’s a buyers market.
However, advertisers are unwilling or unable to buy advertising on YouTube in a way that doesn’t follow their existing habits and infrastructure. They’re working with media buying agencies who have no incentive to optimize and make brand dollars work harder.
Most media agencies businesses generate profit by receiving a percentage of a total spend. As a result, they’ll want to keep margins low – a great way to do this is to buy your media upfront. The problem is, the ecosystem has changed, and the dinosaurs haven’t figured out that they’re already extinct.
In the long term, both brands and Google will come out further ahead once brands get a better understanding of YouTube (and digital media as a whole). The losers will be the brands and media companies who fail to evolve.
Brands may start to get a lot more bang for their buck as they learn to unbundle the outdated bureaucracies of yesteryear and begin leveraging the advantages digital has to offer.
]]>YouTube is an amazing marketing tool – a hybrid social network/search engine/content host. However, it changes constantly, so I’ve gathered a list of my favorites resources here. You can also get email updates with the latest tools and resources here.
THE BASICS
Getting Started (YouTube)
2013 YouTube Marketing Guide (KissMetrics Blog)
MANAGING YOUR CHANNEL
SEO Basics/Tagging, Titling, Description (YouTube)
Video Thumbnails (YouTube)
In-Video Programming (ReelSEO)
Featuring Channels & Cross-Promotion (YouTube)
Creating a Playlist (YouTube)
How to use YouTube Annotations (YouTube)
Channel Art Templates (Canva)
Tips & Tricks (Vlogging Pro)
ANALYTICS TOOLS (Free)
Syncing YouTube and Google+ (YouTube)
How To Use YouTube Insights (ReelSEO)
Channel Statistics (VidstatsX)
Channel Statistics (SocialBlade)
Top Viral Ads Chart (Unruly Media)
Video Shares, Tags, & Stats (VidIQ Chrome Extension)
Channel Level Stats (Channel Meter)
ANALYTICS (Paid)
Brand & Rights Management (Zefr)
Influencer Identification (Tubular Labs) –
Enterprise YouTube Tracking (Visible Measures)
Campaign Tracking (TubeMogul)
Influencer Identification & Optimization (VidIQ)
A/B Testing for Channel Optimization (VideoLC)
Management & Monitoring (ChannelMeter)
YOUTUBE PAID MEDIA/TRUEVIEW
About YouTube Ads (YouTube)
How to run a Campaign (AimClearBlog)
BLOGS COVERING YOUTUBE
ReelSEO
New Media Rockstars
TubeFilter
VideoInk
Zefr
ReelnReel
YOUTUBE MCN’S (Multi – Channel Networks)
AwesomenessTV
Alloy Entertainment
Big Frame
Collective Digital Studio
Discovery Digital Media
Forefront.TV
Fullscreen
Machinima.com
Maker Studios
My Damn Channel
Style Haul
TasteMade
If there’s a resource you think I should add to the list, please email me or leave a comment below. Also, get updates with the latest tools here.
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