A Blog by Jonathan Low


Jul 21, 2013

How Celebrities Make Money From Social Media

Familiarity and favorability meet reach and frequency. Advertising and public relations success has always depended on engaging a target audience in a manner that stimulated purchasing.

It makes sense that celebrities who have tens of thousands of followers on Twitter, Facebook and the other social media launchpads should be seen as useful carriers of the message for brands that wish to employ them. Celebrities have always been sought-after, using their fan base, reputation and notoriety to enhance brand image. There has been some debate about how effective such third-party endorsements are, especially for products or services outside the traditional health and beauty sectors, which is where many sports and entertainment stars get the most attention. However, the easy allure of big names continues to be seen as a good value.

Some celebrities are paid outright for tweets or Facebook mentions of specific products. In addition, tie-ins with websites and other 'content integration' strategies have become a new revenue source for those wishing to trade on their fame, however - or perhaps, especially - short-lived it may be. The question that is arising, as the following article explains, is whether consumers are becoming more aware of such paid pitches in the form of seemingly innocent tweets, etc and beginning to ignore or reject what they perceive to be an intrusion. Given the other trends in social media messaging, that seems quite possible, but will not forestall the development of new innovations in the bid to marry devoted fans with determined brands. JL

Cotton Delo reports in Advertising Age:

Stars like Kim Kardashian are still routinely paid five figures for a single tweet promoting a product, but how else can they carve out a profit from millions of social-media followers?
Luigi Picarazzi is president of Digital Media Management, a 25-person shop in Los Angeles that's dedicated to helping stars answer that question. The company focuses on securing deals with brands to do content integrations on celebrity websites, deals such as Mattel getting a writeup in Felicity Huffman's WhatTheFlicka.com; Vidal Sassoon represented in a Vanessa Hudgens Tumblr post with a #selfie photo of her curls; and Kate Walsh giving tips on running a small business in a post sponsored by financial planning service Learnvest.)
The company also works with an ad-tech vendor called Bre.ad that can show a full-page ad to users upon entering or exiting a site, or from links posted to social-media accounts. (Bre.ad shares ad revenue with its celebrity and publisher clients; its CEO Alan Chan says that some clients are making as much as $20,000 a month.) Mr. Picarazzi -- a former assistant to Nicole Kidman whose agency also works with movie studios and counts "The Hunger Games" among its biggest clients -- talked to Ad Age about how celebrities are turning their vast social followings into real businesses.
Ad Age: What are celebrities looking to do in social these days?
Luigi Picarazzi: Every client is different for us. Some come with the goal of helping to promote their projects, some come to launch a brand, some come with a charitable goal … Oftentimes our clients come to us and say, "Hey, I see how digital is starting to be of importance in my traditional deals, and I'm wondering if there are also opportunities that exist online in terms of creating a business." And so we've partnered with our clients to discover what those opportunities are. From banner advertisements to sponsored content to digital-only product opportunities, we've really tried to make sure we're aware of all that's possible.
Ad Age: Do celebrities generally see social as a business or as a way to speak to their fans or promote TV and film?
Mr. Picarazzi: I don't think [revenue is] their primary goal because I do believe that they've learned the value of [social] in all aspects of their life. What we try to teach clients is to use it for themselves. We don't try to be them ... They've also seen how in their careers – from endorsement deals to securing magazine covers – it's helped. So I don't necessarily think monetization is the ultimate or primary goal. Maybe it is for some, but I think there's a value beyond that.
Ad Age: How do you approach content integrations with brands?
Mr. Picarazzi: We've built out web properties for them that are sometimes focused on them and sometimes they're the editor for. For example, Kate Walsh is a client and we have a website with her, katewalsh.com, and we use that for various objectives, but then with someone like a Felicity Huffman, we've created a site for moms called WhatTheFlicka.com. And with each of those types of sites that we build and create with our clients, we come up with an ad sales strategy ... For most of our clients it's content-based ... What we've found has been most successful is when we pair a brand with one of our talent and we create content with them. Whether that's a video a sponsored blog post or even sometimes an entire section of a site that's partnered with a brand.
Ad Age: Do the brands you partner with for content integrations tend to already be working with clients on other campaigns?
Mr. Picarazzi: They're usually new brand relationships. We've helped service some of those (existing) deal points, but a lot of the stuff we've participated in we've created ourselves. We've created an entity called the Women's Influencer Network, which is basically a network of all of our female-focused sites together. One of the big reasons we created that entity was to represent our talent and their traffic out in the ad marketplace … By joining forces in this network, we've been able to create an audience of over 3 million uniques each month and including social, over 40 million.
Ad Age: Are paid tweets going out of fashion?
Mr. Picarazzi: I think it's oftentimes something that is so disconnected from what you're usually talking about, and it's 140 characters. Why not take the time to find out what these brands' objectives are, how that matches your audience, and see if you can come up with something more native and comfortable than paying the celebrity to tweet something that's probably not something they wrote or even thought about wanting to plug? There have been a lot of those deals out there in the past, I would say more so before than recently. What a lot of brands found out was, "Oh, that was great. I got so and so to tweet about this, but no one actually went and visited my site." What brands have always been interested in are results and oftentimes that needs to go beyond social.
Ad Age: Beyond Twitter, are there any particular networks you're excited about?
Mr. Picarazzi: I think part of our role for our clients this year has been to educate them about YouTube. Beyond the premium, million-dollar deals that YouTube made available to some publishers recently, which we were a part of. Rainn Wilson's Soul Pancake was one of our clients, and we secured them a deal with YouTube … Our clients are people that people want to see. So we've been starting to make YouTube a real part of their strategies because one, yes, you're a celebrity and people want to see and hear you. Especially if they miss your show or you're on hiatus and they haven't seen you in a while, they want to see you. Combined with the fact that YouTube already has a system in place that says you do that and we're going to share revenue with you.
Given the fact that so many celebrities have been spending all of their time just completely focused on Twitter... it's not right. Our role is to educate people and say spread yourself out a little bit.
Ad Age: Are your clients getting interested in any of the newer social apps?
Mr. Picarazzi: We're definitely experimenting a lot with Vine and now Instagram video … It's funny because they're adopting them a lot quicker than they were before. As soon as Instagram video came out, clients were calling me and saying, "Hey, how come I can't do this? I can do this on Vine." And I was like, "Whoa, OK. Somebody's been updating their apps." And it's great. Especially because it's another creative avenue for them.


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