- The youth-focused digital video network AwesomenessTV is building up its in-house division that makes video series for marketers.
- The company says it has recently been winning business in head-to-head pitches with creative ad agencies.
- It's the latest example of pressure on traditional advertising business models.
Traditional advertising models seem to be under pressure from every corner.
The latest emerging threat: digital entertainment companies claiming they know how to make ads better than agencies do. And these ads aren't even ads in the traditional sense.
The youth-focused company AwesomenessTV, perhaps best known for producing web video programming aimed at teens and tweens for YouTube, Snap and other outlets, is ramping up its in-house unit that makes content on behalf of brands. Harley Block, the company's EVP, brand partnerships, said that division's revenue jumped 50% in 2017 and it plans to add 15 to 20 more people this year.
The web video firm, majority owned by Comcast with Verizon and Hearst holding significant stakes, recently nabbed former NBCUniversal executive Tricia Engelman to bolster the team as its vice president of marketing solutions.
"What's really interesting is that as the creative agency space is getting tough, and you're seeing layoffs on a weekly basis, we’re doing this," said Block of the division's growth.
Block was referring to recent cutbacks at agencies ranging from Droga5 to BBDO to Arnold. In addition, many other digital publishers that produce branded content for marketers, such as Refinery29 and BuzzFeed, have also cut back on staff.
"The competition in this space is crazy," Block told Business Insider. "What’s fueled our growth is that the marketplace is finally paying attention to Gen Z."
And Gen Z requires a different, less overtly commercial approach, the thinking goes. For example, a few weeks ago Awesomeness introduced "Speak Up: A Made To Move Series" a show produced for the braces brand Invisalign.
The series features social influencers with built in followings, such as Lauren Elizabeth (nearly 1.3 million followers on YouTube) and Baby Ariel (who has over 20 million fans on Music.ly), discussing social issues like dealing with anxiety and bullying.
It's clear the videos are sponsored by Invisalign, but the actual advertising messaging is fairly restrained.
AwesomenessTV has produced similar original series for Hollister and Victoria Secret's Pink.
Block likened what Awesomeness is doing to Laundry Service, the social/digital ad agency that a few years ago spawned a separate content business called Cycle that specializes in video for social platforms.
He said among the reasons Awesomeness is able to beat out old school agencies for these kinds of deals is that it has legitimacy both as a programmer and a distributor.
In other words, it knows how to make shows this young audience likes (such as a scripted series about teens on a cruise ship for Royal Caribbean), and knows how to get them in front of these viewers where they hang out (which is less and less in front of a living room TV).
"We’re a digital TV network." Block said, noting that Awesomeness produces 21 original shows a week and 400 hours of video a year. "We have a relationship with this audience, because that's where we were born."
Of course, creative ad agencies will surely argue that they can help marketers with a more comprehensive strategy – from social media posts to mobile ad targeting to even TV ads – rather than specializing in one-off video projects.
But as more brands look to shake up their ad agency rosters and explore shorter term partnerships, these kind of pitched battles between agencies and media companies could become commonplace.
"It’s definitely a threat – and may be the future of how marketers spend," said Ian Schaefer, a digital ad veteran who was most recently chairman of the agency DeepFocus. "There are utopian and dystopian elements of that though. But the more transactionally clients behave, the more often this will happen."
"The question is how sustainable it will be once it gets more competitive," Schaefer added.
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