The major points of our chat 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.
Can you explain the difference between buying in auction (TrueView) and buying media in advance (with reserve) on YouTube?
Think of it like a restaurant reservation. There’s a hot new restaurant in town and you want to go to this restaurant. Let’s assume you have to pay 20% more to make a reservation, right? But you can make a reservation well in advance for the best table, for your one-year anniversary, but your meal is going to cost 20% more. That’s like buying on reserve.
You know that you want to eat at that restaurant and you know the day you want to go eat there. You probably would want to make a reservation, especially if, let’s say, your anniversary is around Valentine’s Day or New Year’s Eve or Christmas when you know that it’s going to be busy at the restaurant.
While buying on reserve is paying a premium to reserve your media (or table if we’re continuing with the analogy) and TrueView is like walking in and hoping that you’re going to get a table.
Now, it could be that you walk in and it’s a slow night and a slow week. You get an amazing table and you pay 20% less. But, if it’s a hot restaurant, you may know that it’s never dead. You’ll have to show up and you’ll maybe wait an hour and then you’ll get a table. So it really sort of depends on the inventory — your risk tolerance — in a sense. Some people would prefer to take the risk and potentially get a really great deal, but other people are less risk-averse and would rather say, “I’d rather reserve in it advance, I know I’m going to get it. I don’t have the tolerance to go and show up and eventually have to wait in line.”
On TrueView, can’t you get the same inventory (ie any channel you want) but cheaper than reserve?
Buying on TrueView is operationally difficult to target on the channel level. Technically, yes, you can do it. There’s a section in adwords where you can target even to specific videos if you want. In my experience, though, that is an operational headache.
There’s also the idea that if you’re targeting a very specific set of channels and you’re in the auction, there’s a lot fewer impressions that you could win. If you’re like, “I need to fill a million impressions, only on these five channels,” you need to make sure that you win almost every auction to fill the campaign.
The final point – there are certain times of the year, Q4 for example, where TrueView is generally more expensive than reserve. I think if you were a sophisticated buyer of TrueView, you could probably target individual channels and get the same content for less, but there’s also risk involved. Maybe you won’t get the exact inventory you want because its already been bought on reserve or you’ve been outbid.
On the media side, creators often join MCNs thinking their CPMs are going to go up because more of their inventory is going to be sold on reserve. How often do you think that typically happens for a creator in an average MCN deal?
At the MCN I work at, when we talk about renegotiating or resigning channels, media and higher CPMs are oddly not a huge part of conversation. I don’t know if that’s a choice we make or that’s just not something that our creators ask about. Most of our creators are more concerned with content guarantees and with ancillary revenue opportunities. Book deals, licensing, stuff like that.
But I totally agree with you. I have to imagine it’s a bigger point of conversation for your mid- to long-tail creators, because I think that most of them are self-aware enough to realize that they’re probably not big enough to get brand integration deals. I have always been a huge fan, maybe naively, of reserved media. I think it’s one of the very few win-win-win products that MCNs offer.
Selling reserve video inventory is better for the creator because they don’t need to do anything and their CPMs go up. Even with YouTube rev-shares, those net CPMs are 20-30% higher than what they’re already getting via the auction and other AdSense revenue.
Selling reserve inventory is good for the MCNs because it’s operationally easy to do. Obviously you need to have a little bit of understanding, but there’s no back-and-forths with creators, margins are predictable because it’s based on flat pricing. Selling on reserve you don’t have unexpected travel expenses, you don’t have all of the stuff that comes with working with influencers — which is worth it, but it can be unpredictable. I think it can be a fairly decent margin business.
It’s an easy way to get revenue in the door at anywhere from between 20-40% margin depending on how you can scale it.
The third win is with the brands and agencies, in the sense that I think you could make a case that its more premium inventory than you could get anywhere else, or at least more targeted or more transparent. You could argue that a lot of the inventory that MCNs have in their network is among the most premium video inventory on the web. I think that’s good for advertisers.
For brands that do not understand or don’t feel comfortable with influencer marketing, buying media allows them to dip their toe in the water.
That is my belief on the media side of things.
But, I don’t think selling the ad inventory has really been a focal point of any of the MCNs.
How do you think the brands and creators have evolved to work with each other? One thing we hear a lot, especially from creators, is that brand’s don’t ‘get it’ (ie that brands don’t understand how to work with YouTuber creators). But, do creators ‘get it’? Have they adapted to work with brands?
I think brands have adapted to working with creators more than creators have adapted to work with brands.
I wonder if part of this, is the result of creators having gotten into this business because they didn’t want to get real jobs. They figured out what they love to do and they’ve been savvy enough to figure out how to make a living doing it.
I often get asked by creators “Why can’t I just do a cool video and just slap a logo on it. Why is that not good enough?”
They don’t understand that these companies have real people working for them that want to be great at their jobs, who want to work hard and provide for their families, live happy lives.
The prevailing perception among YouTubers, is that brands are just some faceless organization with a shit load of cash that is just indiscriminately throwing money and they don’t actually want something in return.
In reality, there’s someone who’s vouching for this creator or making a decision and their boss, understandably, expects a report showing why they made this decision. There’s hundreds if not thousands of people involved in the entire process.
We have gotten to a point where certain people treat popular YouTubers in such a way that the YouTubers don’t feel that they need to think about accountability. They think that because they’re the new hot thing, they don’t have to be accountable.
So what’s the outcome of this in terms of project execution?
I continually experience that kind of over-promise, under-deliver from the creators …a lot of them are super entitled. They’re a pain in the ass to work with.
They are surrounded by Yes Men and Women, management, MCNs.
I hate to say this, but in some ways creators are almost like a commodity in a sense that, if the [REDACTED – NAME OF FAMOUS CREATORS] are a pain in the ass to work with, there are 50 other channels that are pretty similar to. That’s the case across the board.
Eventually, everyone will get wise that some creators are easier to work with others, word will get around that so-and-so is difficult to work with.
I think some creators are going to realize that they have burned themselves by being hard to work with. In some cases, yes they’re hard to work with because they’re jerks or they’re entitled, but I wonder if another part of it is that creators don’t know when to ask for help, or they try to be a one-man team, but they’re getting five brand deals a month and they’re making $10 million a year.
There’s no one-person company out there that makes $10 million in revenue. Most organizations that are bringing in the amount of revenue that a lot of these creators are doing are creating sustainable businesses by making sound business decisions, by hiring a staff, by putting structures in place to be able to follow timelines and execute deadlines. I understand why some creators may have no interest in doing that. They may not personally want to make $250 thousand a year on 10 million in revenue by building themselves into a company.
They may prefer to keep it independent and to make $10 million salary on $10 million in revenue, but I think eventually a lot of them will either burn out or they’re not going to be able to handle that much big money, and in two years, word is going to go around that they’re not easy to work with, and they’re going to fall apart.
]]>My first guinea pig is a partner at a digital content studio that works with Fortune 500 brands and top YouTube talent with millions of subscribers.
In this extensive interview we covered a lot of ground, including how marketers can overcome the total confusion around the roles of MCN’s, management companies and managers, all the work that goes into selling ideas to brands, etc.
In my opinion, the major highlights from our interview 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.
Okay. So introduce yourself, what do you do in this space?
I’m partner at a digital content studio that works directly with brands and YouTube talent. We develop, write, direct, and produce all the content we create.
What’s it like working with brands on projects with YouTube creators?
Brands are becoming much more savvy now than they were even two years ago. It’s become much more common for brands to understand that this is a world where the content has to be in the voice of the creator.
Whereas a few years ago it was about kind of fitting these creators in a commercial box, now it’s much more about the brands empowering creators to make something special.
And what’s that process like? How do you mediate between the desires of the two (the brands and the creators)?
It’s about setting the right goals and expectations with the brand from day one.
With the creators, you have to create an atmosphere where the project feels like a genuinely fun and creative endeavor. It’s not going to result in good content if it’s just a financial transaction. On the creator side, what we try and do is go to them with the opportunity to make something that they either haven’t had the production resources or the financial resources to do previously. That’s how we make these feel like special projects for the creators.
On the brand side, you have to set expectations early on that you’re entering into a new space and you have to be comfortable speaking the language of that space.
If the expectations aren’t set with the brand and the right atmosphere isn’t created with the creator from the beginning, then you’re going to have a campaign that just feels like a transaction launched one day and forgotten about the next. But if you do all that work at the beginning and facilitate a positive experience for both sides, then you can create something that’s meaningful.
What are some typical challenges you run into?
The less savvy brand marketers try to control too much of the message and it’s counterproductive.
The audience can sniff it out and the creator will not put their best foot forward. There have been certain points along the way, where a process starts as, “Yes we want to keep things as authentic as possible,” but reality sets in when some offbeat video comes back from the creator and there’s a lot of nervousness on the brand side. But, when that weird video gets launched and and has 10 million views in a week, the brand is like, “Oh, I get it, this is real.”
The brand having a core message or a core platform is critical to creating successful content.
Ok, your favorite type of brands are the ones that have a defined platform. What are the type influencers that you like working with?
We like working with creators who have big ideas and big ambitions but haven’t had a chance to realize them yet. We like working with creators who are up and coming. They are less inundated with brand requests. They are going to come with a really fresh perspective to the project and be genuinely excited to be involved.
We also like creators that have started with a format that has the potential to be expanded upon. So they have something they are known for and it’s a format that can really be grown into something bigger, or different or more ambitious.
Honestly, enthusiasm is one of the things that I found could be the key difference. And there’s no data to measure this, but the key difference for a successful and an unsuccessful project is making sure that talent is genuinely enthusiastic about the project.
Enthusiasm and desire go such a long way for a successful project and it goes back to whether a project feels like a commercial transaction or like a creative endeavor.
What’s the difference between the up and comer and the guy who just has a million brand deals coming to him every day?
I think it’s directly tied back to their evolution and where they are in their career. Creators who have been in the “game” for a really long time are now diversifying what they are doing. They might be hosting a TV show, or they might be doing a music tour. And a one off brand deal may not be as sexy to them. Whereas the creators who are coming up, these opportunities give them the chance to really elevate their career. Finding people who are on the rise, and haven’t peaked already,is essential.
They’re hungry, they want it more.
Do you feel as though creators have adapted to understand how to work with brands as much as brands have adapted to work with creators?
Overall, no.
We have to do a lot of the work of selling the concept. Oftentimes, all we get is a sentence or something that’s scribbled on the back of a piece of paper.
We then have to turn that one sentence into a treatment, and then make sure that both the creator and the brand sign off on that treatment, and then turn that into a script. We translate the creator’s ideas into something that’s brand friendly.
The MCN’s, the creators, and their Management aren’t able to do that. They don’t know how to write a treatment. It’s awful. The MCN’s try and take a stab at it and it’s like written by an intern.
So that’s where our value is, taking ideas scribbled on a napkin, and not only making them big from a creative perspective but also understanding the process of brands and making sure everything goes smoothly.
My experience with the MCNs is they miss that. They write a shitty treatment or they don’t put any production muscle behind the actual idea and it just turns into just another video on the person’s channel. And it’s just like “Okay, there’s another video and there’s a link back to the brand in the description section.”
It’s like, “Who gives a fuck, you know?”
So I think there’s a serious gap there. They can’t make the creative awesome. The production has to not feel like a commercial, too. Just because you’re putting money behind the actual production doesn’t mean you make it look like a commercial. You make it look like something that belongs on this person’s channel. It just is bigger and more epic than they would do on their own.
And then the project management piece is super important and with MCNs I’ve been exposed to their project management and their process and it’s just not up to snuff. It’s just scatter shot with poorly written stuff and poor planning.
Now, how do you define great content? It means different things to different people.
Well, there’s a part of making great content that’s like either you’ve got it or you don’t. It’s about behind the camera talent as much as in front the camera talent. But, there’s a layer of great content that is just about “Put this person in front of the camera, see what happens and I will love it.”
But, with YouTubers, with their fans, they want to see their favorite talent in the limelight. They want to see them doing interesting stuff. I’ll go back to the project that we did with [REDACTED] a year or two ago, we did a video with him and it’s the most viewed video on his channel for the last three years, because the dude gets millions of views every video he makes. But he gets 15 or 20 million views when he makes something that’s epic and sweeping and incredible because his fans freak out.
That’s our philosophy and I don’t know if it’s perfect. It’s certainly more expensive, because you have to actually make something. Our philosophy “If you make something special or elevated, on the creator’s channel, while it may not be the same thing that got them to where they are today, their fans are going to lose their shit and be super excited to see their favorite creator do something really special.”
And in terms of great content you can’t just say great content is X, Y or Z.
A lot of it comes down to who you have working on the project. And I think using this [REDACTED] example, we couldn’t have had the idea for this video without him, and he couldn’t have made that without us. To us, that’s the perfect symbiosis.
Creators have something special. It’s undeniable, they have a voice that people want to hear. So how do you take that voice and do something special with it and create something that’s extraordinary and feels different and unique from all everything else that they are creating form a day to day basis. And in the process, make something that the brand could be really proud of. So it’s not just a direct to camera Vlog video but it’s something that the brand can show at their annual sales conference and be proud and say, “We made this, and it had this type of impact, and it looks good, and we’re really proud of it.”
So, in your mind what role is the MCN playing?
The fallacy of the MCN is that they’re capable of handling the production and project management. To me they are talent managers that have convinced brands that they have a distribution network to sell.
But you can’t just build a talent management agency and a network and then back into having creative and production capabilities. Those are learned behaviors and skills.You have to have to get the right people and the right atmosphere where the priorities are right.
So I think creative production and really good project management are missing, and when you pull those things out of the equation, you end up with basic product placement. And it just doesn’t feel distinct, or of note, or something that people should pay attention to other than the creator’s audience.
MCNs are fantastic opportunists, their timing was impeccable. I think they’re basically talent management agencies.
But then what role the UTAs and WMEs…?
They’re better talent management agencies.
But a lot of talent, they’re signed to an MCN in addition to a UTA, WME, or CAA.
I know. Honestly I don’t really understand that. I think it’s hard for everybody to understand. I think it’s hard for brands to understand.
Who should we be talking to, where people are charging margins, who’s making money? What are we being charged for? Management fees? What’s the pricing model? What’s the value?
What is the MCN? What are they charging a fee? I’m actually asking.
If I go to an MCN and I’m like, “Yo, we’ve got $80,000 to do an awesome video with talent X.” And they’re like, “Oh, yeah, let me add my VP of…” literally their most senior sales person for an $80,000 deal. Okay, $80,000 is all right, but it’s not going to change the world for them and it’s their most senior VP. What are they making? What goes to the creator? I have no idea.
I truly don’t understand what MCN’s are other than talent agencies, that have much more of a focus on brands, on selling. They just did such a good job of positioning and awareness with PR that people assume you have to go to them even though that’s not the case.
Do you think they have staying power?
Yeah. I do actually. I haven’t seen their financials, but they’ve been pumped full of cash. And, having influential folks and legacy companies propping them up goes a long way.
I don’t know if their business models are profitable, but they’re important media entities for AT&T, Disney, etc. Owning an MCN makes those companies look young and financially, it’s a drop in a bucket for them.
So, in your mind, what value are MCN’s providing?
It’s interesting to see what MCN’s are trying to do to move beyond YouTube – with their original content, new content platforms, etc. But, I think all that stuff is going to lack quality . I look at the stuff they’re trying to create and for the most part, it doesn’t look good. .
What’s the opportunity there if you can get all this content from creators for free?
I suppose it’s like more valuable content because these massive companies have bankrolled tens of millions of dollars to create higher quality content. So in that sense it’s beneficial for the overall ecosystem that MCN’s are sucking money out of the traditional players and pumping it into the ecosystem.
But digital content is difficult. Did you see what happened with Snapchat and The Onion labs?
Snapchat shuttered original content, and The Onion created something called the Onion Labs to create branded content. They both shut down their branded and original content division. Isn’t that crazy? The Onion Labs should have made a kililng. .
The thing that agencies can’t offer is built in distribution. The Onion or Funny or Die, the opportunity for them was massive to do really well off branding content, because they have that audience.
It seems like there’s this triangle where you’ve got the audience, the talent, and the production. And it’s tough because usually you’ve got two out of three. Nobody has the perfect trifecta.
So you’ve got great content, an awesome creative team but you don’t have built in distribution. Or you’re a media property like Funny or Die but half of their branded content wasn’t any good. They had some amazing stuff but it wasn’t consistent.
I would add production to that, as well. I think people undervalue really good production. it’s really hard for someone like The Onion or even Funny or Die to do shit that doesn’t just look like it’s made in a garage.
But, I think it relates back to the MCNs. their value add is being able to group together audiences and they do a good job on that piece. But, you can’t just whip up an awesome content team overnight. Content has to be part of the company’s DNA. It’s not easy to make great content and that’s something those guys are lacking.
So, to sum up, what should creators know, and what should brands know? What is the one key take away here? For either of them. It can be something different.
I think creators should know that brands can help you make incredible content. Brands can help you create things that be able to create on your own.
And for brands, trust the creator’s voice and give them the resources and the support to make something special.
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