Outside the Box: Social-media stars are advertising’s darlings
Jan. 15, 2011, 1:48 p.m. EST
The hits keep coming
By Larry Kramer
SAN FRANCISCO (MarketWatch) — It’s a time-honored tradition for companies to hire stars and celebrities as spokespersons for their products.
General Electric Co. /quotes/comstock/13*!ge/quotes/nls/ge (GE 18.82, +0.22, +1.17%) had Ronald Reagan host the GE Theater on TV. Hanesbrands Inc. /quotes/comstock/13*!hbi/quotes/nls/hbi (HBI 24.49, +0.02, +0.08%) featured Joe Namath trying on a pair of panty hose; Chrysler had Ricardo Montalban talk about “Corinthian leather.” Brooke Shields put Calvin Klein jeans on the map, and James Earl Jones announced the call letters for CNN /quotes/comstock/13*!twx/quotes/nls/twx (TWX 33.13, -0.47, -1.40%) . Nike Inc. /quotes/comstock/13*!nke/quotes/nls/nke (NKE 84.07, +1.51, +1.83%) used Michael Jordan and Tiger Woods to endorse shoes and clothing. Nestle SA’s /quotes/comstock/11i!nsrgy (NSRGY 53.79, -0.03, -0.06%) Nespresso shows George Clooney drinking its coffee.But today the world is changing. While actors and athletes are still being hired, many companies are going after a new breed of endorser. The rise of the Internet and particularly YouTube /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 624.18, +7.49, +1.21%) has resulted in a new breed of star, the unknown talent that captures our imagination with a short but clever, funny or poignant video.
Meet the new faces of advertising
These are our people. They aren’t rich or famous, but they captivate us with their ability to tell a story in short-form clips. They call themselves names like “Smosh,” “Katers17” and “MysteryGuitarMan,” and are often the people who make social media interesting and fun. Between just those three, they probably have accounted for almost 1 billion video viewings over the past few years. They can garner a million page views a day.
Many of them work with an interesting, small but bicoastal company called Hitviews, which serves as both a talent agency for dozens of online stars and talent “finder” for traditional brands and their ad agencies. Hitviews is a great example of a business that couldn’t have existed until the last few years, but could grow rapidly as brand advertisers begin to understand the growing power of the medium.
The company was founded in 2007 by media consultant Walter Sabo — a former radio executive who has run radio networks and stations for ABC /quotes/comstock/13*!dis/quotes/nls/dis (DIS 39.29, +0.03, +0.08%) and NBC, as well as worked for Sirius XM Radio Inc. /quotes/comstock/15*!siri/quotes/nls/siri (SIRI 1.56, +0.03, +1.96%) and Clear Channel — along with his partner, Caitlin Hill, an Australian woman who created Web videos under the name “Thehill88.” They got funding from some of Sabo’s friends from his long broadcasting career, including network-TV executives Fred Silverman and Ed Hersh, advertising guru Jack Myers and others. See MysteryGuitarMan’s YouTube channel.
Hitviews has a roster of more than 50 “talents” who collectively have more than 3.2 million subscribers, or regular viewers, and routinely reach more than 100 million people a month with their work. These are startling numbers, considering that these new-media stars were attracting just thousands of viewers only five short years ago.
Over the past few years, more companies have begun to understand the power of social media. Increasingly we are talking to each other about what products or services to use, eschewing the traditional advertising or media influences. Those who sell things know they need to join the conversations, and reach out to us where we are spending our time.
So it is that PepsiCo Inc.’s /quotes/comstock/13*!pep/quotes/nls/pep (PEP 66.78, -0.13, -0.19%) Mountain Dew has hired Katers17, also known as Kate Elliott, to create short, fun YouTube videos using its product. PepsiCo is letting Elliott do her thing, not follow a script written by the company’s ad agency. See Katers17’s YouTube channel.
A-list clients
The Hitviews client list is impressive, including CBS Corp. /quotes/comstock/13*!cbs/quotes/nls/cbs (CBS 19.94, +0.07, +0.35%) , Fox /quotes/comstock/15*!nws/quotes/nls/nws (NWS 15.94, -0.03, -0.19%) , Kraft Foods Inc. /quotes/comstock/13*!kft/quotes/nls/kft (KFT 31.34, -0.10, -0.32%) , Logitech International SA /quotes/comstock/15*!logi/quotes/nls/logi (LOGI 18.62, +0.50, +2.76%) , Microsoft Corp. /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 28.30, +0.11, +0.39%) , MTV /quotes/comstock/13*!via/quotes/nls/via (VIA 47.85, +0.44, +0.93%) , Panasonic Corp. /quotes/comstock/13*!pc/quotes/nls/pc (PC 14.26, +0.10, +0.71%) , Reader’s Digest, Sony Pictures /quotes/comstock/13*!sne/quotes/nls/sne (SNE 35.88, +0.26, +0.73%) , TiVo Inc. /quotes/comstock/15*!tivo/quotes/nls/tivo (TIVO 9.77, 0.00, 0.00%) , Virgin Mobile and the Weinstein Co., among others. Many are repeat customers.
“You no longer have to hire the top sports star or biggest actress to promote your product,” says John Moore, chief media officer of the Mullen advertising agency in Boston. “Web stars are the rising stars, and their influence provides brands with built in viral reach and authentic association to the passions of their target audience.”
Andy Pray, senior vice president of public-relations firm Ruder Finn, said he has worked with Hitviews to create videos for clients including TiVo, Virgin Mobile and Logitech. “Each time Hitviews helped deliver results that spoke for themselves. One campaign netted nearly 2 million views … another got 250,000 in one week. But it’s not just about views. They were able to drive traffic to my clients’ websites, helping to spur sales and amplify awareness.”
One of the more interesting ironies is the fact that traditional television networks have embraced Hitviews’s nontraditional video stars to help launch network programs.
When Peter Liguori was at Fox, the network hired Hitviews to help promote two new shows, “Lie To Me,” and “Fringe.” Hitviews Web stars produced a dozen videos in January 2009 and helped pop awareness of “Lie To Me,” which became the first regular series in the history of the network to debut at No. 1 for the week.
‘Unbiased anarchy’
While Liguori can’t correlate the work of Hitviews to ratings success, he did say the talent company generated “very sizable numbers of views online.”
He added that he likes the Web stars, because “the key for me was that it was the audience, and not some manager, publicist or marketing exec who made these folks into Web stars.”
Describing the Internet as “a form of unbiased anarchy,” Liguori said the audience found these stars, “liked them and trusted them. We did not ask them to like the shows, nor did we put any words in their mouths. Cool begets cool. As these Web stars were popular and influential, we assumed their followers were as well. It kick-started the whole social-media discussion” inside Fox.
Hitviews talent has promoted several TV shows, including “Glee” and “Melissa & Joey.”
“Our talent will only speak for products they like and use,” said Elliott, who now is working for Hitviews as its West Coast talent coordinator. In the early days of Internet video, most of the “stars” were “hot young girls,” she noted. “But that’s changed now. Actually now the most popular video artists are guys. The common denominator among the stars — men and women — is their personality and their talent making video.”The number of Internet-video artists that make significant money is probably “several hundred,” according to Elliott. “People are making a living at it now … it’s a whole new career.” Some have their own agents; many use Hitviews to coordinate their gigs.
Industry sources say some of the top artists are making six-figure incomes regularly, with some up around $250,000 a year. They also come from all over the world, many working from homes in Europe and Asia, as well as throughout the United States.
Ruder Finn’s Pray said he has used Hitviews to find people for “five or six different business situations, and they have given me a different solution each time.” He added that he considered every campaign successful. Some have used multiple artists, some single artists doing multiple videos.
It’s easy to sell to clients, Pray commented, because success is quantifiable in viewing and hit numbers. Clients also treat this as PR as well as marketing.
For Hitviews founder Walter Sabo, the company has become his obsession. He believes that it can help many brands reach audiences by weaving products into creative content.
“Brands can be part of the show,” he said. “not a preroll or pop-up ad, but rather have their message woven into content that speaks to what online audiences are thinking and saying online.”
Larry Kramer was a founder of MarketWatch and is the author of “Cscape: Conquer the Forces Changing Business Today.” He does not have a financial or other affiliation with Hitviews.
