The need-to-know takeaways from VidCon 2019
Extra Crunch media columnist Eric Peckham took part in all the craziness that has become VidCon this past week, where 75,000 influencers, YouTubers, advertisers, and more congregate in one place to see how many likes they all can generate (and I guess to discuss business strategy). This year, there were voluminous discussions about the rise of Chinese social media giant ByteDance’s TikTok as well as the future dangers and opportunities of synthetic media — deepfakes and also fictional influencers.
Eric has all the details of what was interesting from the conference in an exclusive conference wrap-up for Extra Crunch.
One of the use cases for synthetic media is the creation of “virtual influencers” — computer-generated characters whose social media accounts engage real people online and gain a large following. This remains a novelty rather than a mainstream trend, but it is on the mind of a number of people I spoke to.
Charlie Buffin co-manages (human) social media stars but is also developing virtual influencers like Cade Harper and Pippa Pei that post content with each other and with real human influencers. He explained to me that the opportunity is to own the original IP of these characters and craft storylines between them, plus for real-life influencers to create virtual representations of themselves that can engage fans in more ways.
What seed-stage dilution tells us about changing investor expectations
Scale Venture Partners operating partner Dale Chang discusses one of the major trends in seed financing: the rising dilution of early-stage rounds of capital. From there, he then investigates how those changes at the seed stage are changing expectations for Series A and B rounds.
When you look at the whole picture, an interesting story emerges. Founders today are making a trade-off that wasn’t necessary just a few years ago. They’re taking more capital and dilution upfront, then scaling their businesses to the point where they can attract as much capital as they need to take and hold market leadership.
After all, investors perceive many markets as winner-take-all. We’re looking for signs of leadership in those markets earlier than ever, then de-prioritizing short-term valuation considerations in order to secure ownership in market leaders over the long term.
Even a well-run #2 player is a tough sell to investors these days.
What we can learn from DTC success with TV ads
EDO president and CEO Kevin Krim meanwhile discusses how direct-to-consumer (DTC) brands (think Warby Parker, Harry’s, Ro, or Casper) are using TV advertising effectively as a cheap source of leads. As Mary Meeker pointed out last month, customer acquisition costs are rising for most digital channels like social and search, forcing startups to seek out new and cheaper paths to growth.
Mattress Firm and Sleep Number take a conservative portfolio approach to dayparting [apportioning ad buys across time of day], spreading their ad buys roughly evenly across time segments.
Casper takes a very different approach. It focuses the bulk of its advertising from morning into mid-afternoon—particularly in the early afternoon (“afternoon daytime”)—and spends little in all other times, including premium-priced prime time TV.
This enabled Casper to spend an estimated $2.5 million versus Sleep Number’s of $22 million in the same time period. Focusing on the daytime dayparts was clearly driven by Casper’s data-driven view of what was working for them. EDO’s data validates that Casper’s TV ads were 4.7 times and 6.6 times more effective in generating engagement than those of Mattress Firm and Sleep Number respectively.
Why commerce companies are the advertising players to watch in a privacy-centric world
Privacy is on the minds of many of us, given the data leaks from Big Tech and the increasingly Orwellian presence of omnipresent smart speakers. Nowhere is that privacy more of a concern though than in the advertising space. Justin Choi, CEO and founder of Nativo, discusses where he sees the future of privacy is going to come from: commerce businesses.
As mentioned above, the data-driven future belongs to the companies that can demonstrate a clear and irresistible value exchange for consumer data. In that regard, today’s commerce companies have an advantage over today’s publishers.
The commerce company advantage is clear. When people buy products and services, they must provide the information necessary to pay for the transaction and have the goods or services delivered to them.
Similarly, many commerce companies operate successful loyalty programs through which consumers are happy to offer up their personal information in exchange for discounts, rewards and custom offers. These important programs elevate commerce companies above even popular social platforms like Facebook, which lacks the ability to offer tangible products or discounts in exchange for data.
VE Growth Marketing Profile: TrueUp
Yvonne Leow has published our next Verified Expert profile, this time with London-based growth marketing firm TrueUp, which has worked with startups like Quizlet and Living DNA. Yvonne interviews founder Liam Reynolds about the firm’s philosophy and how it approaches growth.
Liam Reynolds: We already knew that a lot of the value we bring clients is the ability to test and experiment at speed. So we started looking at how we could do more and more tests. Facebook and Google weren’t exactly setup to facilitate this, so we ended up building our own tools to help achieve this. We ended up carefully structuring experiments where we run hundreds and hundreds of tests simultaneously. We then learn what overall message works, who the core target segments are, what message works within each segment and what the overall opportunity is for those specific channels (Facebook, Instagram, Google Search, Display, LinkedIn, etc). We then use those learnings and apply to other channels such as the website and ensure those user journeys are fully optimized and working as hard as humanly possible.
E3: Understanding your user – The Art and Science of UI/UX behind Facebook, Google, Mint, and Edmodo
Finally, we’ve been publishing a select number of edited transcripts of podcast episodes we think go beyond the daily headlines and analysis. Neil Devani and Tim Hsia of The Operators looks into the world of design in their latest episode:
This week’s edition features Gülay Birand, UX Lead and Product Design Manager at Facebook, and Tim Rechin, Head of Design at Edmodo, the leading education technology company. Gülay and Tim share their experiences and explain design, UI/UX, how to build a career in these fields, and how entrepreneurs should think about them.
Here’s one answer on how to think about building a career in design:
Rechin: Yeah, I would agree. One of the things I tell people is if you have the opportunity, do a startup and do a big company. It doesn’t really matter which way you start, but do both.
The other thing too is there is a little bit of analysis paralysis when you start and you’re really trying to, you put so much pressure on yourself to be at the right company, especially today where so many companies are out there doing amazing things and you feel the need to go to that company and join that culture. But what I think is in many ways, you just need to start. Just get out there and start.
I think that when you are starting out you have plenty of time in your career, and if it doesn’t work out at your first stop, the thing is you’ll learn something. And that’s what the most important thing is. Just take that away and say “Hey, I didn’t like that it didn’t fit, I wasn’t getting what I needed, I wasn’t inspired, I didn’t feel ownership.”
And then you go find the next place where you think you’ll get that. And I think that also combines with mentorship and finding people in the industry that can help guide you. But just get in there and get busy, get your hands dirty, and it doesn’t matter if you start at a big company or a small company, you’re still going to learn something and it will be amazing and then go from there.
Thanks
To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.