Zach James cofounded Movieclips.com in 2009 before embarking on his latest venture into video with Zefr, which helps brands and networks manage and monetize their YouTube video assets. James is also the brother of Josh James, founder of Omniture (which was sold to Adobe Systems for $1.8 billion in 2009) and currently founder and CEO of BI software company Domo.
Zefr earlier this week raised $30 million in new funding from Institutional Venture Partners (IVP), though James said the company has no plans to sell yet.
Zefr was spun out of Moveclips.com three years ago, which managed media rights for clients like Warner Brothers and Sony Music. It now counts brands and agencies like Adidas and Starcom Media Group as customers.
James spoke with AdExchanger about the future of reaching audiences on YouTube and turning fan-uploaded content into targeted opportunities for brands.
AdExchanger: How did Zefr get started?
ZACH JAMES: [Cofounder Rich Raddon and I] started by building [Zefr] really for the content owners at first to help them understand how a fan uploaded their content, identify it, monetize it and get all the analytics from it. Then we said, “Why don’t we do this for brands?” Of course, there are other platforms who are trying to play in channel management and developing ad tech for YouTube, but no one is really going to brands or agencies and saying, “Mr. Adidas, we understand you have a giant presence on YouTube where your 360-degree view would be to understand your owned channel, your earned media, which is any time your fans are talking about you, and your paid reach, which is anytime you want to advertise on YouTube.”
So, we built products and a brand suite under all three of those things. Our owned solution is called ChannelID, our earned solution is called BrandID and our paid solution is called AdID. We like to go direct to brand, but we’re getting a ton of interest from agencies because they want to bring it to multiple clients.
How are you working with brands to amplify earned media through paid video placements?
We ask the brands, “How many views do you think you have on YouTube a month?” and they’ll give us a number like 30 million and quote their official channel. But then we’ll run our software and we’ll come back with 300 million views this month on their brand and show them where it’s happening. We find about 90% of the conversation on a brand is happening when their fans upload content based on the brand and talk about it and engage with other people. Once we help them understand who all their fans are, we rank their fans, their top 100 influencers, message those fans, and after they get to know them, we show them where they stack up against their competitors in terms of keywords and fans they’re influencing.
Can you give an example?
I’m a major retailer and I have a live event coming up around the Olympics. So I can go into BrandID and type in “Olympics” and my brand, and all these videos will show up, and then you can type in “Olympics and my competitors’ brand” and other videos will come up and you can take all those videos and create a campaign around it or a commercial around it for the Olympics. It’s really highly targeted and it’s one of the first times you can really start to put paid in front of earned media. All of a sudden, you click on those videos because you really want to watch this one guy talk about this soccer ball he has, and the ad that runs before it is the retailer who made the soccer ball. The conversion is really high.
This is a result of AdID?
AdID has played a huge role. After you identify all these people and what they care about through BrandID, AdID plays a role based on whatever creative you have coming out. You can do keyword search to find what people are talking about and then target against on those URLs. Or, if you have an official channel and you want more views and more subscribers, we find all those people who are already talking about your subjects and then run campaigns in front of them.
What does Google’s appointment of Susan Wojcicki from SVP of ads and commerce to SVP of YouTube mean for you?
With Susan’s expertise and all of her background in ad tech now moving to YouTube, I think it’ll be great. YouTube already does creative things. YouTube’s TrueView video ads are an amazing tool. Now you have AdWords as an option and everything they’re doing there is really interesting and we play around a lot there. We bought a company last year called Pipewave, which basically helps figure out how to pair the right ad with the right person at the right time, and so we’re definitely investing in advertising. We bought that platform and now Susan’s coming over, and we think she’s a great person to think newly about the platform. Luckily, part of being a developer on a platform like YouTube is they have hundreds of engineers working on the APIs and measurement, so we have access to all that.
Can you discuss revenue and headcount?
We built an engineering team around Pipewave to fill out our AdID product. [They have] a Boston engineering office. We have about 200 people and we have about 50 of them coming from engineering and we’re going to significantly grow that number on the engineering side. This new money will be going heavily toward engineering and just building more software as well as sales and marketing. We’ve doubled our revenues every year for the last two years.