A new breed of social-video specialists is stealing business from old-school, TV-obsessed ad agencies

YouTubeStephen Curry and King Bach appeared in a YouTube video for Brita.
  • A new breed of social-video specialist is carving out a niche in advertising.
  • These startups are competing with traditional ad-agency giants by mastering the creative aspects of social media and helping brands connect with influencers.
  • Industry veterans predict that those this group could become acquisition targets down the road.

Creative ad agencies have traditionally focused on big ideas and making ads that capture them – think “Coke is It!” “Just Do It” and “Dilly Dilly.”

And while these TV-centric ad giants have focused on these big ideas, they haven’t had to think much about distribution, analytics, social-channel management, making thousands of ads for each social platform, and dealing with talent agencies for high-school-aged digital influencers.

But that’s exactly the sort of thing marketers need these days. Enter a new breed of scrappy, creative upstarts that are treading on these ad agencies’ turf while threatening to usurp their businesses and relationships.

In recent years, numerous startups have emerged that specialize in helping marketers connect with the right digital influencers and make content – mostly videos – designed to be shared across social media while subtly communicating advertisers’ messages.

This group – which includes companies like Portal A, Epic Signal, Collab, and Collectively – is tough to categorise.

  • Some of them produce original video entertainment series for brands.
  • Most of them make branded-content videos designed to travel across social networks. And they have become experts at customising this content for each platform, whether it’s Facebook, Instagram, Snapchat, or Twitter.
  • Besides just making content for advertisers, they promise to help distribute it and get it in front of the right people.
  • To that end, they’re well-versed in using social analytics.
  • Most are deeply connected with digital influencers and understand how marketers should and shouldn’t work with this type of talent.
  • Several are in Los Angeles and have Hollywood roots.

Regardless of where you put them, these firms are winning business from top marketers like Procter and Gamble, Warner Bros, Mountain Dew, and Nike. And that potentially represents a missed opportunity – and maybe even a long-term threat – to the classic ad agencies and their parent companies, such as Publicis and IPG.

Agencies are constantly playing catchup with new media trends

Matt Britton, the CEO of the social-influencer firm Crowdtap who was previously in that role at the social-media-focused ad agency MRY, says he’s seen this pattern before.

For instance, in the early 2000s, a bunch of agencies came on the scene and established bona fides buying search ads on Google. A few years later, startup firms appeared, claiming to be early experts on mobile marketing and social-media advertising.

Eventually, big ad agencies had to either snatch these companies up or match their capabilities – and quickly.

“This is the same pattern,” Britton said. Only, in this case, he said, “brands are getting more savvy.”

“Agencies are bloated, and that world moves very slowly,” he said. “So they are going directly to the source for these new capabilities.”

He added: “They are probably all going to get bought up.”

Portal A started making web shows

The Los Angeles-based digital production company Portal A has launched original series for platforms like Spotify and Verizon’s video app, Go90. But it is fast becoming a go-to for social-video work for marketers anchored by influencers.

For example, here’s a YouTube video crafted by Portal A – featuring the comedian King Bach and the NBA superstar Stephen Curry – that, while taking inspiration from the “salt bae” craze, promotes the water-filter brand Brita.

Zach Blume, a founder of Portal A, said this kind of work was tough for classic ad agencies to pull off and had gradually become his company’s sweet spot.

“You’ve had this 50-year precedent of brands working almost exclusively with [a single core agency] on creative work, and the last five years that’s been cannibalised,” Blume said. “For us, you’ve got a social strategy on one hand and influencer talent on another, then throw in production and strategy.”

He added: “It’s all very specialised, and there’s very little relevance and connection between this discipline and making expensive TV ads.”

Blume says Portal A’s revenue should net $US17 million this year, up from just over $US5 million in 2014.

Back then, it had 10 employees. It now has a staff of more than 50 in Los Angeles who work directly with dozens of marketers.

Epic Signal focuses on bespoke social ads

Brendan Gahan, the founder and CEO of Epic Signal, said his company had found a niche in working directly – and frequently – with a consistent crop of YouTube talent. It even helped Mountain Dew cultivate a network of digital stars.

“I think we’re seeing a backlash against scale, and we’re the antithesis of that,” he said. “Everything we do is custom. We are social-, mobile-, and digital-first. And we’re probably not going to do something that maybe a more traditional agency would. We don’t fit neatly in.”

The company recently put together a livestreaming event on Facebook on behalf of Dockers, as well as an extensive series of custom photos and posts on Instagram and Facebook and even a talk show on YouTube for Amazon Fire TV.

Gahan says he’s surprised the big ad-agency holding companies haven’t moved into the space more aggressively.

“It’s not that old anymore,” he said. “It’s mind-boggling to me. How is something that is over a decade old seen as new or experimental? This is a huge issue for the industry as a whole.”

Collab once built its name on Vine

Collab started out a decade ago focusing on YouTube and eventually became a go-to for marketers looking to connect with Vine stars.

The firm, which calls itself “a digital talent network and entertainment studio helping creators win at life,” is a bit more focused than other companies in this area on the talent’s needs, like managing creators’ content rights and things like syndication deals. It says it works with roughly 1,000 creators.

Collab’s chief strategy officer, Eric Jacks, said its connections with this group were a key differentiator from other influencer platforms or “multichannel networks” that claim to represent several hundred thousand influencers.

“This whole business really operates on relationships,” he said. “A connector with little context has little value. It’s a very high-touch business.”

Collab has landed ad work for top brands like Nike, including a Twitter and Instagram video campaign featuring LeBron James. It’s the kind of work most agencies would kill to be a part of.

“It’s very hard to be a digital agency and be good at everything in digital,” Jacks said.


Collectively helps brands with volume and gamers with rage

The San Francisco-based Collectively bills itself as a social-influencer-focused agency. It boasts of clients like GMC and Pandora, and it has been particularly successful with producing images for advertisers like Sephora on Instagram.

But the firm also recently showcased a group of popular gaming influencers smashing their computers as part of a “Gamer Rage” confessional series of videos for HP.

Natalie Silverstein, Collectively’s vice president of brand, marketing, and culture, says marketers need to figure out a way to connect with consumers in social feeds, where plain-old ads are easily ignored. Unlike in traditional media, these brands need to make lots more ads to constantly feed these digital platforms, she said.

“We’re in the middle of a major transformation in the way marketing works,” she said. “Marketers need content at scale, and it has to be really high-quality. And that’s often not the way traditional agencies are set up to work.”

She added: “These are relatively new practices in marketing, and that’s all we do.”

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