Friday, 11 April 2014

A Marketer’s Guide to the Business of the Blog

Blogging as a full-time job, in this day and age, is no new concept. There are countless blogger success stories out there for you to discover; whether it be 'Beauty Guru', Michelle Phan (who not only has her own makeup line, but also regularly collaborates with big name brands such as American Vogue, Lancome, Dr Pepper etc), to fashion blogger 'Tavi' (who started her blog at tender age of 12, and now curates her own digital magazine for teenage girls).

Michelle Phan on Sunrise – Credit: OscarOscarSalons

Although there is an aspirational value in these stories, from a Marketing perspective, they provide an insight into the current market for self-promotion, and development of a personal brand (without the support of academic or professional experience). Understanding how these, previously 'ordinary' people, have managed to capture a loyal audience, maintain it, and convert it into a commercially viable business, is perhaps the most intriguing aspect of their stories, but not the most important. As Marketers, the real value in exploring these stories is understanding the business model that these individuals have adopted, and discovering our place in it.

YouTube Marketing Ambassadors – Credit: Google Blog

For the average video-blogger (vlogger) on YouTube, the framework for financial success really stems from the opportunity for the monetisation of their original video content. Once a video has been uploaded, there is an option for placing overlay in-video ads, or in-stream video ads that either appear before the video begins, during, or perhaps after it has been viewed. The revenue generated by a YouTube partner really depends on a range of different variables that determine the CPM (cost per mille, or opportunities to see) of an ad being placed on their content; including, but not limited to, the number of subscribers they have. Although the option for monetisation is automatically offered to all content creators on YouTube, there is an emerging market of specialised companies who offer their partnerships to YouTube content creators, and provide personalised, and in most cases, elevated, revenue structures for them to work with. These companies will often offer to promote their partner's content on their own networks, and place content-specific ads on partner videos. The benefit in these tailored partnership structures (as opposed to a straightforward partnership with YouTube), is that it enables businesses wanting to advertise on YouTube to have their ads placed on videos that either mention, or are closely related to, the content being discussed or presented in a video. So companies that are able to match their business clients to their YouTube partners provide a direct link to the targeted customer of the ad, and in doing so, are able to offer a higher CPM, or revenue share, to their partners.

The only potential down-sides to such an arrangement for a Vlogger is regarding ownership and content creation issues; in that some companies may have stricter guidelines surrounding what the partner is allowed to mention, or show in a video (i.e. restrictions on product placement). These companies may also expect the endorsement of their own brand on partner channels (and often all their related social media outlets), and will essentially own the right to exclusively sell and place all advertising revenue on some of these platforms.

Putting monetisation to the side for a moment, other variables for success in this domain really come down to the content that's being pushed by a vlogger, and the tags that each video are being attached with. Content creators really need to understand why people watch them, what key words viewers search to come across their channel, and what content their followers want them to produce. Taking a recent interview of Phan by, she mentions that the success of her videos doesn't come down to purely aesthetic qualities - "I don't want people to think they need a perfect amazing-lighting video. If it's authentic and has a great message, people will watch." And people do watch, considering her 5.9 million followers on YouTube, and her most popular video boosting over 52 million views. In considering the success of her channel, and many others, what it comes down to is developing a positioning strategy, and working to maintain this. For Phan, her target viewer could possibly be described as a make-up enthusiast interested in re-creating over-the-top make-up looks. Given her top videos include how to look like 'Barbie', 'Lady Gaga', a 'Vampire', or 'Sailor Moon', it could be easily agreed upon that she has stuck to this niche, and really pushed herself to the forefront of it.

Michelle Phan K-Pop Tutorial – Credit: Michelle Phan YouTube

Understanding one's viewer has never been easier thanks to the wide range of analytical tools YouTube has made available to its content creators. You can not only see rankings of the top geographies that view your videos, but also the gender, age, time, and playback locations of the people viewing your content. So for vloggers like Phan, tailoring her content to these characteristics is a walk in the park, considering this information is free, and is constantly being updated by the Google databases.

But as easy as it is to breakdown other factors of the YouTube vlogger business model, for our learning purposes as Marketers, the above discussion is probably enough to get a taste of how this business model works, and perhaps understand our place in the model. The opportunity for our involvement is quite clear; in that these individuals are essentially fostering a community of consumers with similar characteristics as the target markets of many brands out there. So for a business looking to advertise to the same market as Phans', or any other YouTuber for instance, having their product advertised on these videos, could not be a better way for them to reach out to their consumer, and achieve the kind of exposure that any brand is looking for amongst its market. 

Salil Kumar
Current student in the Master of Marketing program at the University of Sydney Business School

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