How This Digital Agency Is Cashing In on a New Kind of Celebrity Endorsement
This story appears in the April 2015 issue of Entrepreneur. Subscribe »
Three days after time expired on Super Bowl XLIX, Oliver Luckett still can’t wrap his head around how badly they blew it. His frustration has nothing to do with the Seattle Seahawks snatching defeat from the jaws of victory and everything to do with halftime-show headliner Katy Perry’s failure to exploit her moment in the spotlight to connect with fans via social media.
In the hours leading up to her performance, which drew a record 118.5 million U.S. viewers, Perry tweeted only three times to her 65 million Twitter followers. Other social platforms got no love at all.
This, Luckett contends, is heresy. “Shame on her. Look at her Facebook page—not one mention of the Super Bowl! It’s unbelievable,” he says, shaking his head as he scrolls the MacBook screen in front of him. “The night of the Super Bowl, I sent her page to the execs at Universal [Music Group, Perry’s record company] and said, ‘Guys, y’all need to be fired. You’re embarrassing yourselves.’ Her fans wanted to interact with her. Where are the Instagram photos? Show me her inspirations. Show me something. Get people excited.”
Luckett knows that even the smallest scrap of content—a clever tweet, a Vine video, an image filtered through the Instagram prism—can have a massive and long-lasting impact across the social landscape. TheAudience, the Hollywood-based media publishing startup he founded in 2011, is cashing in on this fact with a new kind of celebrity endorsement that aligns corporate clients with social media tastemakers and trendsetters—the digital-savvy teens and twentysomethings who’ve leveraged YouTube, Snapchat and other platforms to catapult to global fame. Some are fashion models, some are DJs, some are extreme athletes, and some have no discernible skills at all. But they share an uncanny aptitude for the art of self-promotion as well as an unparalleled mastery over social channels that most corporate advertisers still struggle to comprehend.
TheAudience teams with these social superstars, or “influencers,” to roll out coordinated digital campaigns for clients such as 20th Century Fox, Sony Pictures, McDonald’s and Ford Motor Co. Typically an influencer is paid to integrate a brand message or product directly into day-to-day social media activity—tweeting from a sponsored music festival, for example, or shooting a workout video dressed in the client’s athletic wear. TheAudience works closely with each influencer to guarantee that content remains on-message and brand-approved, and implements campaign road maps dictating how, when and where influencers will share it.
“Really what we’re doing is casting each campaign,” says Rami Perlman, theAudience’s vice president of talent and influencers. “We’re looking at data and analyzing who is the right person who’s hitting that target. It’s not about who they are. It’s about who’s listening to them.”
Influencers succeed where traditional advertising stumbles by establishing a profound emotional bond with their followers, Luckett explains. “They’re talking directly to you, and they do it really well. You know in a play, when they break the fourth wall and directly address the audience? [Influencers] do it all the time, and they keep it going. Take Acacia Brinley—she was one of the first non-celebrities to get to a million followers on Instagram. In every photo, it’s like she’s peering at you. She’s really going for it.”
Brinley, a teen actress, model and singer, was the first influencer signed by theAudience. The talent roster now numbers 6,000. Between the in-house creative team and the influencer network, theAudience develops and distributes some 6,000 pieces of content—videos, photos, animations and tweets—per month.
“Our definition of an influencer is someone who brings great content but also brings an audience with them,” says Luckett. “The kids we represent are digital natives. They don’t need a lot of handholding. We come to them and say, ‘This brand wants to reach this audience with this story. Can you be a part of telling that story?’ These are super-successful campaigns that get 80 [million] to 100 million impressions and millions of engagements. That’s viral gold.”
TheAudience is based at two offices located a few blocks apart on Beverly Boulevard. The sites house a growing staff of 150, as well as hundreds of pieces from Luckett’s collection of contemporary art. An Anthony Lister mural adorns the exterior of the main office; inside, the walls are lined with works from the likes of Shepard Fairey and Jordan Crane. The pièce de résistance: a Kevin McHugh shark sculpture, encrusted with 76,000 Swarovski crystals.
For all the larger-than-life characters in theAudience’s influencer menagerie, arguably none is more colorful or compelling than Luckett himself. A burly, bearded bon vivant, he spends his rare off-hours in the company of confidantes like avant-pop icon Björk (“She taught me generosity. She’s so sweet and nice.”) and London fashion eccentric Daniel Lismore (“He’s my muse. I want to turn him into a DJ.”). Equal parts CEO and celebrity, Luckett eschews boardroom platitudes in favor of speech patterns closer to performance art—philosophical flourishes, dramatic pauses and bursts of obscenities, all delivered in his Mississippi drawl.
Clarksdale, Miss., to be exact. The son of attorneys—his father, Bill, was elected mayor of Clarksdale in 2013 and co-owns local blues club Ground Zero with actor Morgan Freeman—Luckett got a glimpse of his future at age 6, when his grandfather gave him a TRS-80 color computer.
“I learned to entice my older brother and mom to type,” he recalls. “I could conceptualize what I wanted, and they would do the work. That’s really what started my career, and I’ve been doing that ever since.”
After graduating from Vanderbilt University with a degree in French, Luckett moved to San Francisco. He landed a job at telecommunications provider Qwest, rising to chief IP services architect before exiting in 1999 to co-found Los Angeles-based iBlast, a wireless data broadcasting network spearheaded by Michael Lambert, the former president of domestic television at 20th Century Fox. Luckett left three years later and, following a sojourn to Spain, returned to L.A. in 2003, signing on with Declare Yourself, a nonpartisan, nonprofit online voter-registration initiative established by legendary TV writer-producer Norman Lear.
“We registered 1.2 million people to vote in nine months,” Luckett says. “When you’re providing a utility like online voter registration and you put it in front of someone who cares, at the moment that they care, it’s extraordinarily effective. It’s basically going to where the audiences are.”
Declare Yourself inspired Luckett’s next move: Revver, which launched in 2005, enabled users to upload their video clips and earn a share of resulting advertising revenue—a then-unprecedented step toward monetizing the online media ecosystem. Beneficiaries included Eepybird Studios, the video production duo behind the viral sensation “Extreme Mentos and Diet Coke,” who earned $50,000 during their first month on the platform.
Revver’s meteoric rise led to investments from Comcast Interactive Capital and Turner Broadcasting. That’s where its troubles began, Luckett says. “Revver was genius. But [investors] basically wanted to put the cable television model onto sharing video. They wanted to geo-restrict everything. We had to watch every video that came into the network to block it for copyright infringement. It was unscalable and untenable. I got kicked out of the company because I was so vehemently opposed to screening content.”
LiveUniverse acquired Revver in 2008 for $5 million, but by 2011 the site was no more.
In 2007 Luckett launched DigiSynd with ex-Revver CTO Rob Maigret. DigiSynd anticipated theAudience by offering outsourced packaging, syndication and marketing to traditional content providers seeking to translate their properties to the digital realm. Funded by Greycroft Partners, Warner Bros. and others, DigiSynd turned heads with viral campaigns for Warner productions I Am Legend (the 2007 Will Smith vehicle) and the Harry Potter series. DigiSynd quickly extended its services to rival studios, and in 2008 The Walt Disney Company acquired the firm for an undisclosed sum, retaining Luckett as senior vice president and general manager of the DigiSynd subsidiary.
DigiSynd assumed control for Disney’s brand presence across social media, managing campaigns for Disney Studios, Disney Animation Studios and Disney Parks and Resorts. For the 2010 theatrical release of Disney Pixar’s Toy Story 3, DigiSynd created an application that fused social networking with commerce: When consumers bought movie tickets through the app, the software alerted their Facebook friends and generated a prompt encouraging the buyer to invite them to secure tickets of their own. Toy Story 3 went on to become the top-grossing animated feature of all time (before it was dethroned by another Disney blockbuster, 2013’s Frozen).
Luckett thrived at The Mouse. “I didn’t speak my mind until Disney. I didn’t have the self-confidence or validation. Disney validated me,” he says. “I’d had success before and made money before, but when [Disney chairman and CEO] Bob Iger buys your company and gives you a massive amount of responsibility to go change something, and you kick ass for him, you feel a sense of confidence.”
But by 2011 Luckett felt he’d done all he could do at Disney. When William Morris Endeavor co-CEO and Hollywood powerbroker Ari Emanuel suggested he head up a new, independent venture that would help WME’s celebrity clients navigate the social media realm, Luckett was all ears.
In its original incarnation, theAudience—backed by WME and investors like Guggenheim Partners and Napster co-founder Sean Parker (who sits on theAudience’s board)—managed the Facebook pages and Twitter accounts of actors and pop singers while creating original content to share with their fans. Clients included Mark Wahlberg, Hugh Jackman, Charlize Theron and Usher; the firm also oversaw Barack Obama’s Facebook page during his 2012 reelection bid. TheAudience’s social presence for the reunited Black Sabbath culminated in the 2013 release of 13, the heavy metal gods’ first-ever U.S. chart-topping album.
TheAudience planned to generate revenue by landing digital endorsement deals for its celebrity clients. “We ran into some headwinds there, where even with big checks being waved in front of the talent we were supporting at the time, some of them were reluctant to do it,” says Mike Drath, theAudience’s COO and CFO. “There are all sorts of gatekeepers around them. They have conflicting brand issues.”
Those obstacles don’t exist with influencers, the team soon realized; what’s more, influencers are social media savants who relate to their followers in ways that megastars can’t. Most important, influencers work for a fraction of the cost. Not that they’re complaining.
Brodie Smith, an American Ultimate Disc League player and Frisbee trick-shot performer whose YouTube videos boast 110 million views, has done “a handful of campaigns” with theAudience. “They’ve brought a lot of amazing opportunities for me to make a living doing this. Sometimes in this business you work with people who are about ‘What’s in it for me?’ but Oliver makes you feel like he’s looking out for your best interests.”
TheAudience will attempt to corral conventional celebrities if that’s what the client requests. A campaign spotlighting Ford’s energy-efficient vehicles recruited singer-songwriter Jason Mraz, actress Felicia Day and health guru Rainbeau Mars.
“Large companies like ours are much more comfortable being evolutionary rather than revolutionary,” says Toby Barlow, executive vice president and chief creative officer for Team Detroit, Ford’s ad agency. “We needed to reach a new audience—one that hadn’t connected with Ford, people who didn’t know we had a green and sustainable platform. TheAudience helped us connect with them.”
But make no mistake: Influencers are the stars of the show. “There’s a new company every week that says it does what we do,” Luckett says. “They don’t have any fuckin’ clue what we do. They think we still manage celebrities’ social media presences. We haven’t done that for a year and a half. It was a terrible, thankless business. Why try to move celebrities that are digital immigrants into it when I’ve got 6,000 kids that speak this language that can push anything and make it trend globally with a push of a button? We are like the puppet master inside of these [social media] systems, and we work with these creators that do their thing every day, and we bring them funding. We did that to the tune of $27 million [in revenue] last year. And we’ve doubled every year.”
As theAudience has grown, so have its creative ambitions. Last year American Express approached the company about a project to promote the AmEx Serve prepaid card while illuminating the plight of the 70 million low- to middle-income American citizens without access to traditional financial services. It’s a demographic whose reliance on pawnshops, check-cashing services and payday loans costs them $89 billion a year in fees and interest.
“American Express was looking to do something different. They didn’t want to spend on a big TV campaign. They didn’t feel it was an effective way to get into the communities or reach the individuals most affected,” says theAudience senior vice president Tim Sovay. “The way to reach them is through social. We have found that the audiences they were looking to target over-index on social platforms.”
TheAudience recruited Participant Media, the production company behind the Academy Award-winning documentary An Inconvenient Truth, to create the AmEx-sponsored Spent: Looking for Change, a 40-minute video on financial inclusion filmed in Luckett’s native Clarksdale and narrated by actor-director Tyler Perry. TheAudience launched a website, SpentMovie.com, and rolled out the documentary for free across the AmEx YouTube channel, Pivot TV and iTunes. The campaign encouraged viewers to share opinions on social media using the hashtags #Spent or #LookingForChange.
TheAudience promised AmEx a combined 5 million views. Spent: Looking for Change shattered that within the first week, with total views now eclipsing 18 million.
TheAudience also is increasing its investment in developing content and artists in-house, buoyed by the colossal success of “#Selfie,” a viral phenomenon in 2014 and perhaps the quintessential expression of the Oliver Luckett aesthetic.
Recorded by DJ duo the Chainsmokers, “#Selfie” is a satire of the self-obsessed social media culture. Chainsmokers manager Alan Alpert secured a meeting with Luckett, who quickly grasped its commercial possibilities and commissioned a music video featuring David Hasselhoff, Snoop Dogg and DJ Steve Aoki alongside dozens of theAudience’s influencers, each captured in a selfie photo. When the “#Selfie” clip hit YouTube, the featured celebrities shared it on their social platforms. From there, it spread like wildfire. At press time, YouTube views of “#Selfie” were approaching 300 million.
“‘#Selfie’ was the perfect moment at the perfect time, with the perfect sarcasm,” Luckett says. “We made [the video] in a week. I willed it into existence. I just wanted to see if we could make a phenomenon out of nothing. It had 46 influencers in the video, and I knew I had viral distribution through them. It was built in.”
TheAudience has broken other acts, too, such as teen duo Jack & Jack, whose “Wild Life” video Luckett directed, and Israeli DJ Borgore, whose “Decisions,” with the memorable lyric “Bitches love cake,” features Miley Cyrus. Both clips incorporate click-to-buy overlays encouraging T-shirt sales.
“We used to represent [electronic duo] LMFAO. They made more money off Party Rock Clothing than they did off their music. Everything was for sale in their videos,” Luckett says. “So we made ‘Bitches love cake’ T-shirts, and we sold 46,000 of them. The video got 16 million views, and there were 181,000 clicks to buy the T-shirt. If you’re a music artist, you can sustain yourself off of YouTube revenue and controlling your video and selling music and selling tours and merchandise.”
Which explains why Luckett found Katy Perry’s radio silence ahead of her Super Bowl performance so maddening. The singer didn’t just squander a chance to generate fan goodwill; she missed a golden opportunity to generate revenue. Her Twitter feed and Facebook page never made mention of the virtual pop-up store Universal Music launched at halftime in partnership with digital commerce firm Delivery Agent to market exclusive Perry-branded clothing and accessories.
Luckett vows that theAudience will never make those mistakes—that it will maximize every opportunity available to brands and content creators, and originate a multitude of new revenue opportunities along the way.
“I think I’ve pretty much nailed the formula—where these brands trust us, and allow artists to be artists,” Luckett says. “My lifelong goal is to build eco-systems where brands, content and consumers all work together to create sustainable businesses for artists. Social media is an amazing equalizer. There’s never been a more incredible time to be a creator than right now.”