Episode 138

The Integrated YouTube Influencer Strategy Ridge Wallets Used to Build a $60 Million eCommerce Business

Sean Frank - Ridge Wallets
October 21, 2020
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There are two different types of sponsored YouTube influencer videos:

  1. An integrated sponsored video and 
  2. Stand-alone sponsored video.

Stand alone sponsored influencer videos are what most brands use and what most people think of when they hear “YouTube influencer marketing.” Stand alone videos are typically an influencer providing a quick review or endorsement about a particular product.  So the video is titled “Widget 12 Pro Unboxing and review.”

An integrated sponsored influencer videos is an ad put inside of video on a separate topic.  The video might be about Fortnite or camping, or whatever, but inside the video is a 30 second ad, read by the creator, for your product. These integrated video ads are Ridge Wallets secret sauce. 

Here’s a quick look at what we uncover on the show:

  • Why integrated sponsored videos are so great and why they scale better than stand alone influencer videos. 
  • How to approach influencers
  • Why subscribers on YouTube is largely a vanity metric
  • How to spot a dead channel vs. an active channel
  • How to measure the impact of your influencer videos 
  • What to pay influencers and how to think about CPMs (cost per thousand)
  • How to achieve scale in your outreach and deployment of influencer videos
  • Plus more!

Mentioned in this episode:

The eCommerce Fuel Podcast

Andrew Youderian

TrueView

YouTube Attribution

YouTube Smart Bidding

Adzoola

eCommerceFuel Forum

Sean Frank -  COO at The Ridge Wallet

Via LinkedIn


The Ridge Wallet - Slim, RFID-Blocking Metal Wallets

Via LinkedIn

Via Facebook

Via Twitter

Via Instagram

Via YouTube

Episode Transcript:

Brett:

Hello, and welcome to another edition of The eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today, I can say with confidence that I think I'm going to blow your mind with a topic and with a guest that I'm pretty confident you have not heard this approach to marketing before. My guess says if you have heard little bits and pieces of it, you're not using it.

Brett:

I am just thrilled to welcome to the show Mr. Sean Frank. He's the COO of Ridge Wallets, and today, we're diving into their approach to YouTube. Now, you know if you listen to the podcast, I'm no stranger to YouTube. OMG Commerce is a big spender on YouTube Ads, specifically the YouTube Pre-Roll Ads, so we do a lot of that, and Ridge does, too, but they go beyond that and they do some really cool, blow-your-mind type of stuff. I don't say that lightly, so just excited to get into this and excited to welcome to the show Mr. Sean Frank. Sean, how's it going, man?

Sean:

I'm good, man. Thanks for having me here, Brett.

Brett:

Yeah, really excited to chat. We connected on eCommerceFuel, Mr. Andrew Youderian, a friend of mine, runs an amazing community over there. Sean, you posted kind of the way you guys approach YouTube marketing and influencer marketing and your unique look at that. I just sat there kind of dumbfounded like, "This is brilliant, this is beautiful." It was like hearing a concert and you're like, "That was amazing," but on the marketing side.

Brett:

Let's do this. Before we dive in to the ins and outs of this, give folks your background a little bit. Prior to Ridge, you ran an agency. You want to talk just a little bit about that?

Sean:

Yeah, yeah. Happy to. I ran a very small boutique agency. Tried to keep it up under 10 clients because I didn't want to hire people, that's really what it came down to. It was me and three other guys and we did everything from like the financial planning for eComm brands to Facebook Ads to everything on Google. My brother's like a programmer so he did all of the tech stuff. I met the Ridge guys like a year or two after the Kickstarter. They were a fast-growing brand. They did like a million the year before I met them and they're a father-son team and like a best friend and they really sort of focus on product and they also don't want to hire people. They started just outsourcing their marketing to us and then tech, and then it ended up being the operations. Every year that just kept doubling. We went from one million to two million, to four million, to eight million.

Sean:

Ended up being that my team hit 20 people, because we were just doing so many things for Ridge, and it just made sense for them to bring us inside, because the agency fees we so high. We merged. We still run the agency in house, but it does something very niche and specific, and I joined Ridge as the full-time COO a few years back, and it's been a crazy journey ever since.

Brett:

Yeah, that's amazing. I want to talk a little bit about the product, because I think that is a lot of what fuels this. Without the quality of this product, the creativity and the execution of what we're going to talk about today, it wouldn't matter as much, but I was telling some of the guys around the office, that I'm talking to Sean from Ridge Wallets, and they're like, "Whoa, dude, love those wallets." Talk a little bit about what the Ridge Wallet is for the few people that don't know and what makes it so great?

Sean:

Yeah, I wish I had my wallet on me, but I lost it a week ago, so I'm still looking for it. I moved apartments.

Brett:

Only you, if only you had a source where you could get another one. What will you do, you have to go on Amazon or whatever?

Sean:

Right, right. No, it's just that the men's metal minimalist wallet ... the biggest thing is it's a better designed wallet. I still have bi-fold to tri-fold, thick leather things they sit on all day. And the Ridge is a new take on that. It's made of metal, it's premium, it blocks credit card theft and all that type of stuff. And the biggest features like you can't put a lot of stuff in it. You can fit a couple bills, you can fit 12 cards, so it's about the size of a credit card, maybe a little bit thicker, and that's all you should have on you. So it's a great product, and that's the reason why all this marketing stuff works, because it starts with a good product. We're not trying to sell people snake oil.

Brett:

Right, yeah. Really, a good product makes all the difference. I think this is just where we are with transparency of reviews for the most part and information is available online. It's really weeded out the ability to be a snake oil sales person. At least for the most part.

Brett:

So these are wallets that go in front pocket, I don't know, are you a Seinfeld fan? Sean, did you ever watch Seinfeld?

Sean:

Yeah, yeah, yeah.

Brett:

The George Costanza wallet.

Sean:

Yeah, we've been trying to get Jason Alexander for a year, to get him to be in some commercials.

Brett:

That would be perfect. I'm a huge Seinfeld fan. If you're a fan of the show, you know the George Costanza wallet. Fat thing, put it in your back pocket, it throws your back off, stuff like that. I've been going front pocket wallet now for years, and it's so much better. It's way better. Now, I was only introduced to Ridge and you a very short time ago, so I'm excited to get the Ridge and upgrade my front wallet, but it's the way to go. If you still have the back wallet, come on guys, get with the program. You got to go with the front wallet, it's way better.

Brett:

So let's talk a little bit about YouTube Preroll, because that's something I talk a lot about on the podcast. So the TrueView, and TrueView for action ads. People will be familiar with that. How is Ridge utilizing TrueView and the Preroll ads on YouTube, and just speak to that a little bit?

Sean:

Yeah, yeah, so back in 2017, maybe a little bit before when were did all the marketing for Ridge, we're still super Facebook focused, and we heard from a bunch of brands that Google Display was where it's at. I'm going to take you on a little bit of a journey before we get to YouTube. We didn't really do Google Display, we did some Taboola some Criteo stuff, but we were like "Displays isn't that junky?" Isn't that bad ad space.

Brett:

Just curious, did you have any luck with Taboola? That's a fascinating one to me. I've not experimented with it, I'm just curious.

Sean:

Oh yeah, we had great results. We look at everything at Ridge on a last click basis. So before we can see if something's good or not, we have to see one to one last click returns track through Google Analytics. The reason why we do that is attribution isn't good across Facebook, or Google. It's all different, they all take credit for different things, and there's not a good solution yet. There's some cool companies that are working on good solutions, but to try to true up and make it as easy as possible, we just like the lazy thing and just start looking at last click results.

Brett:

But add a little context there, because I think most people that listen to the podcast probably have this view, and I think you guys too, because I know some other really smart marketers, that do what you're doing. You know that multiple ads lead to a conversion. That happens a lot where somebody sees an ad here on Facebook, but then they re-market it to you on YouTube, and then they click on a brand ad. So it all works together, and to really untangle that web and see what had the most impact, it's hard.

Brett:

So you're looking at last click, but you're looking for a one to one, because you realize there is a halo effect and you realize that all of it does work together. So am I understanding the way you guys look at it well, where you're looking at last click, but you're only looking for a one to one, not a three to one or something like that?

Sean:

Right, because probably 70% of our sales come from direct non or group organic or branded search. And people aren't just typing in Ridge Wallet for fun. Something makes them want to search that. And that's either a display ad or something else. But 2015 there was still a bunch of ad fraud around Display. There's bad actors in the space. So we had to have some way to know that we weren't just wasting money. We defaulted to this one to one system. I think since then Google's gotten a lot better about cleaning up some of the bad actors and limiting mobile ad app space, because there's a bunch of farms around that or whatever. Anyway, it started with Google Display. A lot of brands told us that's who you have to check out, that's where you're going to see great results, and we're like okay, let's try that. Before that it was just shopping and search on Google. We started Display, and it worked out great.

Sean:

And this was when we were going from eight million to 15 million. So we spent a bunch of money on Display, and when you spend a bunch of money on Display, you get more and more reps at Google, people try to spend more time and attention on you. And this was just around when they were pushing ... I mean they started pushing YouTube Preroll ads on us pretty aggressively. They're like once you do great on Display, we can do a bunch of really cool stuff on YouTube Preroll.

Sean:

And their tracking sucked back then. This might have been 2017, so we would do it, we would spend-

Brett:

And that was also pre TrueView for action, or either right at the beginning of TrueView for action where you could bid on a CPA basis. Wasn't that right around the beginning of that or just before?

Sean:

Yeah, and I don't even think we were in that program. They were like, "This is a great place, we'll manage the whole thing for you, we're going to get you great results." We spend $200,000 and we don't see any last click sales, where on Display we're getting one to one last click results at a clip of 8K or 10K a day.

Brett:

I'm sorry, what were the results you were getting on YouTube again?

Sean:

Nothing. We saw zero last clicks. This is when they started doing Brand Lift surveys. I don't know if they do that anymore.

Brett:

They do. Actually, what's interesting, so now it's baked into the platform, but you have to spend a certain amount, and I wish I could remember off the top of my head. It's several thousand a day, but once you get to that level of spend, I can even show you, it's in your account now. It's called Brand Lift 2.0 it's there. Yeah, it used to, you had to sign up for a study, help map out the questions or agree to the questions or whatever and then launch for a certain period of time, now it's baked into your account.

Sean:

Okay, yeah. So when we were doing it, they were trying to do anything to prove to us that it was a good channel. They were pulling very complicated reports, they were going above and beyond. So hats off to Google trying to make YouTube work.

Brett:

Asking guys on the street, "Hey, hey, hey, did you see the YouTube ad, do you have a Ridge Wallet?"

Sean:

Right, right. So I think also part of that was, we're a very small team. At this point, there was probably 15 of us, and none of us are good at creative really. We have really smart CMO, we have a really great designer, but we don't have any people to do video on our team. So we were slapping together videos, and that probably had something to do with it. We were probably a quarter of a million in spend wise, and we were just like okay, YouTube Preroll is not for us. I've always watched YouTube, today I probably spend six hours a day on it.

Brett:

I got to know, just because it's fun, what are you watching on YouTube for that many hours a day?

Sean:

Oh man-

Brett:

Are you learning, music, or you do both, what are you doing?

Sean:

Yeah, one thing is just a bunch of universities put a bunch of lectures on there, so you can learn whatever you want. At the same time-

Brett:

YouTube University, baby.

Sean:

Yeah, so there's that, and then there's also because we sponsor so many people, it's so many random videos. Anything I've ever clicked is on there, and I'm just sinking hours into it.

Sean:

So we couldn't get YouTube Prerolls to work. It was probably we were bad at creative, or we had different expectations for the platform, so we started doing ... I know there's a way for us to spend money on YouTube, because I spend a bunch of time on YouTube and I know everyone else is. That's what kind of started the influencer program, just reaching out to creators and negotiating it. I think we're going to go more in depth on that. After two years of success with that, we're like, "Okay, it's probably time for us to look back at YouTube Preroll." And now, one they've updated their attribution aggressively. So you can actually track conversions and user flow way better than ever before. It used to be you couldn't see someone who looked at a YouTube ad and then came through a search ad. They used to not be able to show you that, now they can actually do that, so it looks a lot better. The last group results are still poor, but now that we're more mature marketers, we understand more of the YouTube ecosystem and how it actually plays a part in the whole Google ecosystem.

Brett:

And are you guys running TrueView for action now? Are you bidding on a target CPA basis, or do you know?

Sean:

Yeah, we are.

Brett:

That's the way you got to do Preroll now in my opinion.

Sean:

Yeah, and so we're doing our Q4 budget planning right now, and YouTube Preroll will probably get $800,000 between now and the end of the year of our budget. So it went from being a minor part to absolutely hero, and now that we trust it more and the tracking is better, we're spending a little bit more money.

Brett:

Cool. Very cool. Okay, that's awesome. Love to hear that. And it is one of those things, just like a lot of automation, a lot of Google's automation has gotten way better over the last few years, and since that 2017 to 2020, YouTube Attribution and YouTube, the Smart Bidder for target CPA, infinitely better and really useful.

Brett:

Okay, that's awesome. Let's talk a little bit about why influencer marketing on YouTube is so great. And I know you guys do traditional influencer marketing on YouTube, and you do some really unique stuff too, which we're going to dive into, but first of all, why is influencer marketing on YouTube so great, versus influencer marketing on other platforms? And I assume you guys do influencer marketing on multiple channels.

Sean:

We started like everybody else on Instagram, and we weren't very good at it. There was other brands spending so much money per post on Instagram, at the heyday, 2015, 2017, 2018 that we were just priced out. We knew that the tracking sucks, we're never going to see it work. We haven't done an Instagram influencer deal for probably two years. So we still do some stuff on Twitch as a different platform, but that also goes right back into YouTube, and then we do some stuff on Discord, which is that messaging app, is the Discord group, we do some sponsor stuff there, and then we do some sponsor stuff on Twitter.

Sean:

YouTube takes 98% of our focus for sure.

Brett:

That's awesome. What makes it so great? Why the lion's share of your influencer marketing budget, why does it go there?

Sean:

Yeah, so we can kind of break down and do a couple .. The first thing is the value of the impression. I'm sure everyone in your audience, they're marketers, they know about business, that an impression on Facebook is if an ad shows on your screen at all. It's as long as it's around a second, or even half a second, that counts as an impression. So somebody could just go on Instagram, and just scroll, and all those ads they see is an impression.

Brett:

And it doesn't even have to be the whole ad. It can be, and I've heard different numbers, but a few pixels of the ad, or a few lines of the ad. Not the whole ad even.

Sean:

Right, right. And also, they don't tell you any of this stuff. Facebook got sued, because they were telling people that Facebook video views were more than they used to be. Anyway, we can go into that whole thing. Facebook impressions, Facebook, Instagram, they're weak. And then Display, the exact same thing. If a page loads that counts as an impression, doesn't matter if you're at the top or the bottom or anywhere in there. They have ad blocker sometimes it counts. So display impressions are weak.

Sean:

And then podcasts are typically sold on a download basis, which always are inflated. I have about 15,000 podcasts downloaded, that I'm going to listen to about 10 of them. They're already inflating their numbers, and then on top of that, we love Joe Rogan, we've done a lot of stuff with Joe Rogan, he's an awesome dude, but he puts all of his seven minutes of ads at the very beginning, because it's a better listener experience. They can skip it if they want, but that means at least some percentage of people are skipping it.

Brett:

Skipping it, yeah.

Sean:

Yeah, yeah.

Brett:

I know nobody that subscribes to this podcast does any of that. They consume it all, this is what they wait for, this is the highlight of their week. But no, you're absolutely right, so the metrics around podcasts are really poor. iTunes does a terrible job of supplying data around podcasts, so all we have to go on is downloads. Did someone listen? We don't know. So yeah, the numbers are inflated.

Sean:

Right, so also, podcasts, because the personalities, or because it's typically a more affluent audience, they charge the highest CPM. So there's a question mark about how impactful the ad is, and what the true CPM is going to be, because of the things we just talked about. At the same time, we've done podcasts that deals with NPR, and we did a big buy, six figure buy, and we get a CPM that's around $10, we've done podcast buys with more niche podcasts that want $20, and then if you go to, I don't want to put them on blast, but if you go to Time Ferriss, he's charging a really high CPM.

Brett:

I bet. I bet.

Sean:

We're talking about 50, 80, it gets up there. So the value of the impression for a YouTube influencer campaign is astronomically higher. So what we're buying, to clarify, there's two different types of videos you can pay for. One is a dedicated video, which is somebody taking eight minutes, 10 minutes talking about your product in detail, those are great for SEO if you go on YouTube and type in Ridge Wallet, you'll see a bunch of people who have done that for us. That's not what I'm talking about here. What I'm talking about here is an integrated ad. So it's 15, 30, 45 seconds, a minute, where somebody has a video, they're going to talk about whatever topic, and we're just paying for a hard spot in that video.

Brett:

So this kind of could be about anything. And I want to break this down just a little bit. So the review videos, and we see this a lot, whether it's a hair product, or skincare, or supplement, widget, whatever, you see someone, an influencer say, "Hey I want to talk to you about this new iPhone case, and here's why it's so great, and why I love it, and why I use it." That's cool. And that will show up if someone is searching for that product and review, if they're really digging into that product. But that really hits someone at the consideration stage. The consideration stage or the purchase stage. It's not an awareness play, because I would only see that, in your case, if I'm searching for Ridge Wallet review, or something like that. So what you guys are doing, this is brilliant, because I really don't know anybody else doing this who's not at scale, so you're looking for how do I reach someone higher in the funnel, but still use influencers, so here's what you do.

Sean:

Yeah, so we're reaching out to hundreds if not thousands of influencers as week and the ask is we want to pay you a flat fee to have a 30 second ad in your video. And the reason why that is so impactful, we can get into all the metrics and the details you want, but the reason why that's so impactful, and gets such good results is YouTube is one of the last platforms where people are choosing to spend time. They're choosing to spend so much time, and it's dedicated time. They're watching a video, they're watching a personality, they're interested in a topic. And Instagram isn't like that. You can follow thousands of accounts on Instagram, but if you subscribe to 15 or 20 channels on YouTube, and you're spending 40 minutes watching somebody's video, you actually care about this person's opinion. It's a true personality with a true community.

Brett:

Which that is the average watch time, you were sharing that, that 40 minutes is the average watch time on mobile? I think that's right for YouTube.

Sean:

Yeah, the average mobile session on the YouTube app is 45 minutes, which is insane.

Brett:

Crazy.

Sean:

They do a great job capturing that app. But people have creators they like and respect and that's the reason they're spending so much time watching them, and it's dedicated time. Sounds always on, you're staring at your screen. So you get 100% share voice, 100% share a screen, and it comes with a stamp of approval. There's some sort of authority attached to it, somebody you like is talking about a product and it goes a step further when you sponsor really small channels. The guys like, "Hey, this person's giving me money. This brand is giving me money." Which is a big deal, because one thing we care a lot about Ridge, and this is because we're all young people and people to pursue their dreams or whatever, but so many people want to be full-time creators, and it's so hard to rely on YouTube ad revenue to do that. You can get demonetized or whatever, so knowing that this brand is going to stand with me, and I can make videos or whatever I want, I can get thousands of dollars from them, so they're grateful for it, and the community is grateful for supporting someone they care about.

Sean:

So I would say it's the only ads that actually develop good will. No one wants to see Facebook ads, no one wants to see Display ads, but people actually, it's positive when we give a YouTuber money, because they're like, "Hey, this is a good thing that's happening for me and my life." And they feel like we're helping out a community or whatever.

Brett:

That's awesome. And so then kind of going back to this, you talk about you're putting this ad in the middle of a video, so these videos can be about anything. It can be about Fortnite or camping or outdoors, whatever. It can be any type of influencer talking about any topic that could be related to guys, because that's your market. I'm sure you got a little more specifics in there, but it really could be any guy. So now you're reaching someone, now you go to that awareness level, and different levels of awareness.

Brett:

How are you having them structure that ad, and what does that ad actually look like? And so as they kind of placed wherever in the video they want to place it, or you kind of giving them guidelines on that, letting them do whatever they want? What does that look like?

Sean:

Yeah, so we have a basic ask. We really, small pain, we have two people who do this full-time, and I oversee them. We work with, in a given month, 150, 200 creators. So we have to make it really easy. We have a little checklist thing we send them. It's like, "Hey, here's the talking points." We ship everybody products so they get a wallet, and be like, "We want you to show it on screen, we want you to show the link, talk about the discount, talk about the value props or whatever." But really it's like do whatever you think your audience is going to like best.

Brett:

Do it in your voice, right?

Sean:

Yeah, we have people who put a lot of effort into it and they make little skits around it, and they insert that in there, or they make a series about it or whatever. Other people just read the value props. At the end of the day, we always tell them look, "We don't know your audience, you know your audience, do whatever you think is going to work." We're super easy to work with, we don't require approval on any of the videos. We're just like, "Just go ahead and put it live." When it comes to timing or placement, some channels are real particular. They're like, "Look, we only do 15 second ads at the very beginning, at the very end." We're like, "Okay, if that's what you're comfortable with, go ahead and do that." Other people were just like wherever you want to put in, we want in the first third, if you can do that great, if not totally fine. But the creators like working with us, because this is going to sound somewhat mean, we're not a mobile game, and we're not a VPN. Because those are the other people spending a lot of money. It's some weird mobile game or some VPN software. So they like working with us, they think we're cool, and we make it really easy, we don't try to control their content or what they can say. They typically try to do a good job.

Brett:

That's awesome. It's a legit product. It almost, when a creator gets to the point where they can run ads, it's almost like the legitimizing thing, right? So for the content creators that maybe aren't huge, the fact that they can get an ad in their programs, it's kind of cool. It's a milestone potentially. And yeah, it's a cool product, it doesn't look questionable, or make them look like they're desperate for ad revenue, it's a legit thing and it's got a cool factor for sure.

Brett:

So you said, you're talking to did you say 200 to 300 influencers a month? You're working with that many?

Sean:

Yeah, so that's signed deals. We probably approach 1,000 in a given month. A lot of that is just man power, just finding channels, finding emails, blasting it off. But yeah, signed deals in a given month is probably 150 to 200. Yeah, yeah, it's..

Brett:

Are most of these deals ongoing, or do you do a one and done and then evaluate how it did, and maybe do it again? What does that look like?

Sean:

Yeah, so there's a couple different phases. So the first phase, we try to find three to five video, we call them tests, a test campaign, just like let's see how it goes. Once again, we look for one to one last click returns. We typically beat that, which is crazy. We're talking about people who have never heard about us seeing an ad, going through and making a purchase, and we're talking about over blowing the six figures a month spend, so we typically beat that, and any channel that gets pretty close, we will bring them back for a bigger deal. So we'll do three to five video deals. We're probably batting 70%. There's a lot of times we miss. We'll think a channel will do good, and we'll strike out, and then if something is close at all, we'll bring them back. And everyone we did a deal with that didn't work out, six months later or right before Q4, we'll revisit that deal, because there's a halo effect.

Sean:

The other thing about this ad space is it's the only evergreen ad space. If somebody makes a video about top Photoshop tips 2020, that video will get views all year, and probably next year and probably the year after, and we have our ad inserted into that video. So there's always going to be a halo effect. So even if a channel let's say we sponsored a channel, we think it's going to go great, but the algorithm goes haywire and they stop getting recommended or whatever, the deal isn't great, but in a couple months, people find that video search resurfacing, YouTube decides to recommend it, it could end up working, and we come back and we work with that guy again.

Brett:

So when you're looking at the initial measurement, and that is one other really important distinction about YouTube is that the content is evergreen and really good content actually gets better with time, it doesn't just expire, it will keep getting views potentially for years. So when you're making that initial analysis, and you're looking for that one to one last click return, what kind of window, what kind of attribution window are you looking at? Are you waiting 30 days after the first few videos are created, or what time frame are you considering there?

Sean:

Yeah, usually 90% of sales happen within the first two or three days. There will be some additional spike, but the reason we do three to five video deals is one video, there's just way too much risk. You go on any creator, they have some videos that spike, and hit a million views, some that do 200,000. So doing one video is way too risky. It's like playing Letter Black, sometimes you'll get a hit, sometimes it won't work. Because if I do multiple videos, we'll get some sort of bounce bag out of it. 90% of sales will happen in the first couple of days. We'll wait 30 days, because we do this on a rolling basis, so when their videos are done, we'll see how the first one did, that typically takes 30 days to rollout anyway, and then we'll decide then.

Brett:

That's awesome. And so again, you're asking for a three to five video deal?

Sean:

Yeah, yeah. With most creatives it's three to five video deals. And then after they prove themselves, we do a 10 or 15 video deal. Just be like the rest of the year, just post these within this rough time frame, and let us know if it doesn't work or whatever.

Brett:

Awesome. So how do you guys ... It blows me away one, you reach out to 1,000 influencers a month and end up getting contracts with 150 to 300, how do you find them? How did you map out criteria what you're looking for, very interested to hear that?

Sean:

Yeah, so the first thing I want to clarify, if you're a new brands who wants to start doing this, just personally reach out to five people you think are going to work. That's like I give people this advice all the time. I talk to a bunch of different brands. I'm like, "Look, if you want to do this, don't try to map out rich people. You'll get swamped, you'll get burned, you won't want to do it. Just as the CEO or as the director of marketing or whatever, find five people you think would do good, and just make sure you get deals with those people." You can get in touch with basically anybody you want on the internet, especially if you're like, "I'm trying to give you money, talk to me." That's the first thing.

Sean:

The way we do it, is we started doing that, we started manually pulling all the videos we thought would be good, but then it gets to a point where we have to reach out to so many that we have two people internally who come with a bunch of different topics, off of Google Trends, or off of Reddit, or off of YouTube, whatever. There's a bunch of different topics, categories, hobbies, interests, just a big mess of keywords. And then we give those keywords to a VA. We're like, "Hey VA, find YouTube channels within these keywords. Type this in to YouTube, pull over the channel, the average views, the subscriber counts, the emails, everything." We look at those, we do a spot check, we make sure that they're English/language channels, we make sure the content is somewhat relevant, and then we blast that out. We call all those people.

Brett:

That's awesome. There's actually a tool you might want to consider called AdZula, got referred to it by a friend of mine, but they allow you to do all kinds of channel searches to find channels that meet certain metrics and certain criteria on YouTube, so it's kind of cool. We're just sort of getting started with it, but kind of cool stuff.

Brett:

So I love that advice, if you're just getting started, reach out to five people or so that you know. Any criteria you would give on okay yeah, maybe you just start with who you know to begin with, but should you be looking for minimum thresholds of subscribers? Should you be looking at how many views their top videos get? What should you be looking for there so we know that if this person says yes, it's likely to have some impact?

Sean:

Right, so the first thing is subscriber count as a vanity metric. Subscriber count does not matter to us at all. A lot of YouTube channels-

Brett:

Is that because a lot of people subscribe and then forget, never unsubscribe, but they really don't care about that brand anymore? Or that channel.

Sean:

Yeah, YouTube pushed subscribers in the very beginning, but they've basically deprioritized that feature. I subscribe to probably 50 accounts, but I don't see those accounts videos. They care way more about what you're interested in right now based on what you watched previously, and that's what they're sculpting your recommended based on. And almost all YouTube views come from recommended. Just so everybody knows, really the biggest invention on YouTube is that side recommended bar. When you're watching a video, recommending other videos on the side, or beneath, that's 75% of video views come from those two places. So subscriber count is a vanity metric, it's a holdover from the old days. They're never going to get rid of it, but if you subscribe to a channel and a new video comes out, there's no notification process. They added the bell to try to circumvent that and actually have you reselect your top priority ones, like get those into your feed or whatever, but YouTube they have a social feature now, they have stories now, they're doing all this different type of stuff. But subscriber count is just a vanity metric.

Sean:

YouTube trends happen in waves. So a couple years ago, prank videos were really popular. And they put up massive views. 15, 20 million, and they would have massive subscribers of 12 year-olds. All those channels are dead. The biggest thing to check for is non-dead channels. Are they posting consistently? Are their views consistent? And then it's like, is it an English language channel? YouTube's an international platform, the most subscribed channel on YouTube is key series, which is Bollywood. It's an international platform, most of our sales happen in the U.S. so we have to target English speaking companies.

Sean:

My next advice is don't go after the people that everyone else is going after. The reason why more brands will spend money on YouTube is legacy brand marketing teams are made up of people who are like 45. So they're spending money still on TV, they just got into Facebook. If you work for Pepsi, you're not being like what are the coolest YouTubers I should sponsor. And if you are trying to sponsor YouTubers you're trying to sponsor the ones you know about. The mainstream ones, the normy ones. You're like oh David Dobrik, that guys popular. So just don't try to sponsor the ones everyone else sponsors, because you'll just get into bidding wards you can't really win.

Sean:

We work with a lot of top tier YouTubers, like Philip DeFranco or the Needle Drop, or this guy JonTron. They all put up massive views and massive subscriber bases, but we don't work with David Dobrik or high pass people. Or Casey Neistat, you'll never actually end up seeing a deal get done.

Brett:

Yeah, that's really, really interesting. I think what this is hopefully doing for people is opening their eyes, we all know that YouTube is huge, there's two billion logged in monthly users. It's the second most visited site online behind Google, it's also the second biggest search engine, so people are also searching and finding videos, although, I know the recommended is where a lot of consumption is. So we see that, we get that, but understanding that there is almost an unlimited supply of influencers. You'll never run out. You'll never run out of influencers for you to reach out to, and your testament to that since you're reaching out to about 1,000 a month. When you're looking, what criteria do you have when you're saying I want to find someone that's somewhat relevant? Is that a pretty loose definition or is that clearly defined?

Sean:

It's super loose, because we don't know what's going to happen. We've tried to pull all the data in and be like okay, channels with gaming content that focus on games from this decade are the best. It's totally random. We've tried to use Patreon Subscribers as a metric for if a channel is going to work or not, because they have some sort of loyal audience that's willing to pay them money. There's no correlation. It's entirely, it seems like it's random. So channels I think are going to work out, I have a 50% chance of calling them. Channels I think are going to bomb end up doing great. Where the program is right now is we'll basically do deals with anybody. There's a couple of layers which to consider. It's like how risk adverse are you guys? Because maybe you guys should only do things that you know are going to work out, and then also how brand faith are you, because we're supposed to be showing people, sometimes you sponsor content that we end up getting flak for, you know what I mean? Either you're a brand that can deal with that, or you're a brand that can't deal with that. Both are totally fine, but that's going to affect who you can work with.

Sean:

Recurrent trend on YouTube is making videos about other YouTubers, so that's immediately a drama machine right there.

Brett:

So they got other YouTubers on blast? What's going on here then? They making fun of each other? What's the end game?

Sean:

Yeah, that's the current trend. I'm a YouTuber, and I'm going to review your video, and talk about why it sucks, and then those people are going to freak out. It's all play for views. But luckily, that trend is dying. So there's going to be-

Brett:

Good, that does not sound enjoyable. It's funny that that exists. I know you talk in a lot of eCommerce groups, and you share your knowledge openly, which by the way thank you. What are some of the mistakes you see people make? So people listen to this and they go oh man this is fantastic, I'm just going to go do it. What are some of the top mistakes you see people make?

Sean:

The number one mistake is not doing it. I'm blown away, there's probably 10 companies that aggressively spend money on YouTube with influencers. It's us, it's it's Honey, it's some mobile games, and then it's like Raycon, which is like Ray J's earbuds. So that's basically it. There's not very many people doing it. The first thing is if you've considered podcasts, YouTube ... As a podcast is, is the audio version of a YouTube video. That's really what it is. For sure, if you consider podcasts just spend money on YouTube. The second thing is brands getting in their own way. It makes for bad ads, and bad relationships with creators. And what I mean by that is writing a script of everything you want them to say. Being like this is exactly what you have to say, this is exactly what you have to show. That simply could be because agencies are doing it for brands, and agencies don't want to lose the client, so they're like don't do anything outside the script. Which makes for un-fun ad space. You want something to be engaged with. The creators want to create stuff, just let them do what they're going to do.

Brett:

Yeah, certainly give guidelines like you talked about, and give those selling points, make it easy for them, but don't tell them exactly what to do. You want it to be authentic, and you want it to ring true, and you want it to be fun.

Sean:

Yeah, yeah. And we've had videos that we pay for go live with some legitimate criticisms of us. You know what I mean. And we're like, "Hey, I guess you're right." You know what I mean? You just got to roll with the punches.

Sean:

And then the third thing would be, be willing for it to go bad. The thing about YouTube is we think we know how many views this video is going to get. It could get way more, it could get way less. It's just like creators want their videos to get views. That's the thing. I've worked with some brands who freak out if a video doesn't hit their expectations or whatever, and it's like look, don't do that. For fledgling brands where budgets are tight, and this is a big risk, the thing about Facebook is you can spend $10 a day, you can spend $500 a day, you can spend $5,000 a day more. And you can turn that up or turn it down by the minute, YouTube videos with in filters are what's called hard ad space. They can't be divvied up. You're putting this in, and if this guys going to get five million views, it's going to cost a lot of money. It's some of the only hard ad space, because even with podcasts, they can do visual insertion, so you can sell on, I could buy half of a download or whatever. Or half your total downloads. Or TV they divide it up all the time, just by market.

Sean:

So you're going to have to make a big investment, and hopefully it works out, but don't forget if it doesn't, you have to find one that will. That's why you should handpick your first ones.

Brett:

Yep, totally makes sense. And I love that mindset of, and I've got a specific question about how you price things and how you negotiate, I want to talk about that a little bit, but there's this concept I think as entrepreneurs where in the beginning we're willing to try new things, we're willing to experiment, but then as we reach a certain level of success, we sometimes then become risk adverse, and we're not as willing to step out and do something new. I think you have to have this mindset of to do something new and different like this, you have to be willing to be a rookie. You got to be willing to say, "I don't know, and the only way I'm going to know is if I do it and make a few mistakes, and have a few things go poorly." That's the only way. Obviously we take some shortcuts by learning from guys like you, and so you're not starting from scratch, but you still are going to make mistakes, but you got to be willing to go through that, because the reward on the other side is so good. That's an important mindset.

Brett:

So let's talk about this. This is a hard ad space. Maybe a video launches and it does poorly, maybe a video launches and it gets five million views. Are you just negotiating a CPM cost up front, and then you're sticking to that regardless of how many views the video gets? What does that price look like and what does that negotiation look like?

Sean:

Yeah, so we don't do that anymore. We used to be like okay we'll give you x number of dollars as a CPM, and then we'll scale up or down, and that's a good model, that's a good system, people can do that. The reason why we don't is it's really difficult to manage and track. That's the biggest thing. We don't want to have to send out 30 payments every week or whatever, 80 payments every week for these deals. We have to recalculate and do whatever. It's resources on my team. So I true that up every time.

Sean:

So I think people can do that if they have a better system, awesome. Paying for CPMs guarantees you're going to get what you pay for. But just can't do that. Over here, it would be a logistics nightmare.

Brett:

A nightmare to manage.

Sean:

So what we end up doing is, we figure out what an average amount of views is. We'll look at the last 10 videos, kind of come up what you think this next video will do, that's a lot of guess work, and then come up with what you think the fair CPM for that type of content. So the thing to remember is AdSense on YouTube doesn't pay very well. YouTube's great, I'm not going to .. about YouTube, because it's the only platform that pays you for your content. Instagram doesn't pay you for your content yet, YouTube does. So it's awesome they do that, but it doesn't pay very much. Typically, a CPM is $3 or less, and they take half. I've seen some people have $10 CPMs if you have financial content, or content that reaches a really affluent audience, but it really comes down to however your channel reacts to Preroll ads, or how your channel attracts YouTube premium subscribers. So the pay isn't great.

Sean:

So we start our negotiations at $3 CPM. So we're like you're getting-

Brett:

Which is double what they would get from YouTube itself.

Sean:

Right, right. Because it is a harder ask. You can just put a video up and start making money, but you have to work with us, we have to ship you product, you have to talk about it, you totally get the harder ask. So we start at a $3 CPM. A lot of people say yes. A lot of people are sponsoring for the first time, like oh yeah, cool great. We're like, "Hey, you have 1,000 CPMs worth of ad space, we're going to give you $3,000 and we're going to buy three videos right now." And they're like, "Okay, sounds good." Because we're literally offering you $9,000 right now. Some people are like no. If they have agency, they have managers, they're like we want a $15 CPM. A lot of times what you'll find is for very big YouTubers there's a bunch of people selling their ad space. So there's a podcast YouTuber we're doing a deal with right now, we've been approached by two or three different managers or agencies to sell this ad space, but we can just VM that person and be like, "Hey, how much is it to actually work with you, and we can get a better deal?"

Sean:

There's a lot of sharks in the water. So yeah, we start at three on average, we probably pay $4, maybe $5. Some people are great performers, we pay $8. Philip DeFranco, his default CPM is like $17. He will not go below it, but his ad space really works. He knows what he has, he always gets a million views, so yeah, he's worth every dollar of that.

Brett:

Got it. Super interesting man. This is awesome, really. I know there's so much work that goes into it, but it sounds like it's totally worth it, and what a unique thing. You mentioned just a little bit ago, there's so few brands that are really going hard after this. And so big opportunity. I think big opportunity for someone that says, "Hey, I can actually execute this, I have someone on my team who can actually execute this. And if they follow this roadmap and learn along the way, I think they can make some huge end roads with it."

Brett:

Sean, what about those that say, "Hey, first of all I need to get a Ridge Wallet, because that's cool, that's what the cool kids do." Talk about that a little bit. And then how can people connect with you, and where can people get more of your wisdom, or is it just rarely you show up on podcasts and stuff like this?

Sean:

Yeah man, I don't use social media. I do have a LinkedIn, so you can add me there if you want to talk to me, or you can join the eCommerceFuel forum. I'm in there, you can find me there. You can email me. You can shoot me an email and we can talk about something.

Brett:

Sweet. So shout out again, Youderian, you're welcome buddy, we're plugging your forum, it's pretty great. And then yeah, go check out the Ridge Wallet. Sean, man, greatly appreciate your time and your wisdom and your transparency geeking out about this stuff. It's super cool.

Sean:

Yeah man. I think it would be better for everybody if more brands spent money on YouTube. More creators could go full-time. There would just be more diversity of ad space, and more creators would get on board. I think it would right the discrepancies we're seeing, where some people are trying to charge $20,000 for integration, some people are trying to charge $1500 and it's the same ad space. So I think it's going to be good for everybody.

Brett:

That's really good. As more creators get more ad revenue, they can reach their dream of being a full-time content creator, but that really makes YouTube then more attractive, and YouTube has been growing aggressively in terms of viewership since the lockdown and stuff. Viewership I've seen is up from around 80% or something. But yeah, the more you help the ecosystem, the more it grows, the more eyeballs are there, the more opportunity is there as well. Really cool stuff, Sean. Thank you. Much appreciated. Everyone else, as always, appreciate you tuning in. Let us know what you'd like to hear more of. Give us show ideas. Give us some insight into the burning questions or topics you'd like us to dive into.

Brett:

And with that, until next time, thank you for listening.

Brett:

I think that's a wrap. That was really good man.

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