People are skipping ads whenever they can. But they don’t skip them because they were done poorly; people don’t watch ads because they are irrelevant to what they want to see. Introducing Reelio, the marketplace for brands, agencies and publishers to create rosters of social media talent that speaks to millennial’s. Simply put, you will be able to hire niche icons that are directly related to your company for commercials instead of having to pay for a big time actor who has nothing to do with your brand. These smaller but more specific celebrities then have a greater potential to create content that will actually be watched.
Today, cofounder Pete Borum takes us through his recently funded company and where it will go from here.
Who were your investors and how much did you raise? The round was led by a global syndicate of investors in strategically important markets, as well as by our existing investors (which include e.ventures; the venture capital firms of Philipp Schindler, Lorne Michaels, Tremor Video founders Jason Glickman and Andrew Reis, former Sony Music President and Bertelsmann executive board member Thomas Hesse; and senior executives from Apple, Google, Goldman Sachs, BBDO and others).
Tell us about your product or service.
Reelio is a marketplace for brands to find and partner with digital media celebrities for the purpose of creating original branded videos on YouTube and Facebook. It’s very similar in a lot of ways to the commercials that Michael Jordan made with Nike over the years, but custom-tailored to fit today’s generation and technology. For example, instead of working with one (very expensive) global icon, brands can work with dozens of affordable niche celebrities (known as ‘influencers’) with huge followings on YouTube and FB. And instead of creating a commercial (which everyone skips these days), these influencers create entertaining content around the brand’s products or services. Here’s a link to one of the best examples out there, also featuring Nike, to highlight the difference.
Our self-service platform uses reams of data to make it easy for brands to find the right creative partners, who can reach the right audience, at the right price. After finding these ‘creative soulmates,’ our CRM suite makes it easy for brands to manage those relationships. And our influencer marketing specialists are on call to help answer any questions brands have, or to even execute entire campaigns on their behalf.
The end result is that even a brand with absolutely zero experience on YouTube can, in as little as a few weeks, see their products or services highlighted in dozens of high quality original videos on YouTube and Facebook.
What inspired you to start the company?
Back in 2012, we were talking to a lot of advertisers who were salivating over the size of YouTube’s audiences (the platform racks up 9 billion hours of viewing time every month — that’s 30,000 years of viewing time every single day!), but who could not successfully tap into those numbers no matter how hard they tried. Everyone was skipping their advertisements, and no one was watching the videos they uploaded to their own channels (even the Top 100 advertisers, who are better than anyone in the world at getting our attention, were averaging less than 1,000 views on their videos).
At the same time, we were talking to YouTubers whose shows were generating more viewership each week than a primetime show on CNN, but who still had to work a full-time job to make ends meet.
Both parties were really frustrated, and we realized that they could be the solution to each other’s problems, if we could find a way to marry the massive resources of the brands with the massive reach of the influencers in a way that works for everyone. Everything since then has been laser-focused on making that experience faster, easier, safer, and more economically viable for both parties.
How is it different?
At our core, we are a technology company, but we also have an incredible team with a deep heritage in the arts, entertainment, advertising, and even financial services. As such, we are more cognizant than many companies in the space of how powerful technology can really be when applied to the creative industry, but just as importantly, where technology’s role ends and people have to take over.
Computers are very good at crunching massive amounts of data, simplifying workflow, communicating clearly, and keeping us organized, but they’re incapable of writing the types of songs that make our hearts ache, or of telling a joke that makes us laugh so hard we cry, or of knowing exactly how to angle the camera to capture the sun just so. Only humans can do those things. Fortunately there are already hundreds of thousands of creative professionals working at brands, agencies, and publishers, and millions of active YouTubers, who are busy everyday writing those songs, telling those jokes, and holding those cameras.
What makes us different is how well we have designed and implemented our product to do the things that computers do well in an incredibly unobtrusive way, allowing creative people to focus more on the things that they do so well. And because of the intelligence in our technology that is pairing the right creative people together, to reach the right audience at the right price, we are also able to generate very real and measurable financial returns in a way that no one else can. So the creatives are happy, their audiences are happy, and the CFO’s office is happy too. And our expertise and customer service are second to none, so that even nervous first-timers can get outstanding results.
What market you are targeting and how big is it?
We’re targeting two markets: the large, brand-savvy advertisers who are increasingly shifting their budgets from television to digital, and the small, digital-savvy advertisers who, for the first time ever, are able to use video to reach their audiences.
The television advertising market is huge, exceeding $70Bn annually in the US alone. They’re seeing television viewership drop off dramatically as cord-cutting accelerates and are looking for a safe haven in the world of digital. The problem is that there are currently 147 million users of ad block software, and growing, and these consumers don’t see advertising at all online. So applying the same interruptive TV advertising model to digital is not going to work.
Advertisers need something that audiences can’t block and don’t want to skip. Branded entertainment is the answer, but most major advertisers aren’t set up to be content creators. For those brands, Reelio is a godsend, because we can enable them to jump immediately into the creation of branded content, enjoying the same reach they enjoyed on television, with a buying process and pricing model that feels very similar to what they are accustomed to.
The same is true for smaller advertisers, of whom there are about 3 million that are currently buying keywords on Google and Facebook, but who are just figuring out how to use the cameras on their iPhones, and are in no sense positioned for successful content creation. And because YouTube and Facebook are as diverse as the human species, there are content creators whose reach, personality, and price are appropriate for the major advertisers and for the smaller advertisers alike. And we can reach all of them.
What’s your business model?
Brands can use our marketplace on a self-serve basis, and we take 20% of their spend, or we can execute more involved campaigns at larger budgets on a case-by-case basis. We will have more service offerings available later this year that we’re excited for, but not yet talking about.
What was the funding process like? You raised a seed round last year. How was it different this time around?
It was much easier this time around. The influencer marketing space has heated up considerably, and as an early first-mover, we have a significant head start over our competition in both technology and revenue. We’re already working with hundreds of brands, including dozens of the blue chip global advertisers (Visa, Unilever, Estee Lauder, and many others), and thousands of top influencers. And our technology is unique in the market.
When we went out for a seed round, there weren’t really any competitors in the space to validate what we were doing, and we only had completed one campaign for one medium-sized brand.
That said, the fundraising process is never easy, always takes longer than you think, and always involves more than its fair share of tedious and stressful due diligence. We’re glad to be able to put our focus back squarely on execution.
What are the biggest challenges that you faced while raising capital?
Whereas there were not enough competitors to validate our business during the seed round, in the past year, a lot of competitors have popped up on the scene and essentially put up a carbon copy of the exact same website template that we were using. As such, there were some concerns of commoditization and not being sufficiently differentiated, but those concerns quickly went away once investors got to see what was behind the landing page. We’ve been investing aggressively in building a best-in-class suite of tools with some very unique and patent-pending data processing technology behind it. Once we were over that hurdle, then putting together the right syndicate was also a challenge. We’re very happy with where things ended up.
What factors about your business led your investors to write the check?
More than anything, I believe it was the team. The foresight we had about how the space would develop, our grit and determination to keep the lights on as the market opportunity caught up to us, our execution over the past 12 months, our strategy for the next 6-12 months and beyond, and the reputation for competence and character that we have worked our entire lives to build, all added up to the belief that we’re the team to win this race. It’s really a huge honor to have the caliber of investors that we have, who believe in us with enough conviction to put their money behind it, because we’re in a highly competitive industry, going up against a number of very well-capitalized firms with very smart and accomplished leadership teams. We look forward to proving that their confidence in us is well placed.
What are the milestones you plan to achieve in the next six months?
We can’t get too specific, but everything’s going to get bigger and better.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
- Never give up.
- Leave no stone unturned when looking to bring cash into the business. We operated for two years prior to closing our first venture round by selling convertible debt to friends, family, classmates, former coworkers, etc., and we also did paid consulting gigs to monetize our knowledge before we had a product to sell.
- You’re going to need to attract the best talent, without being able to pay them as much as you/they would like. Focus on the nonfinancial benefits that your company offers and never stop aiming for the very highest quality candidates.
- Never give up.
Where do you see the company going now over the near term with the new capital?
First things first: we need a new office. We’ve got 30+ people in 2,500 sq ft in Chinatown. It makes for a great story, but people need to stretch their legs a bit. After that, you can expect us to continue hiring great people so that we can continue to accelerate our value proposition to brands and creators alike.
Where is your favorite place to enjoy the summer weather in the area?
Anywhere on the Hudson, from La Marina in Washington Heights to the Grand Banks in Tribeca and everywhere between (shoutout to the Boat Basin and Frying Pan for always being amazing).
