Trading Secrets - 164. More Than Money: Selling a media company for $300M?! Serial entrepreneur & angel investor Krishna Subramanian reveals the $ecrets to dominating digital marketing

Episode Date: May 9, 2024

This week, Jason is joined by serial entrepreneur and angel investor in the digital advertising and marketing space, Krishna Subramanian! Krishna breaks down how his original plan of attending med school to become an orthopedic surgeon changed when burnout hit and taking a chance on tech, selling Blue Lithium (which he co-founded in 2004) three years later for $300 million to Yahoo, how retargeting works, how he got into digital marketing, what motivates him, some of the biggest apps they have worked with, how influencer marketing has changed, how Captiv8 works, and how they work with predictions for the future.  It’s an episode you can’t afford to miss!  Host: Jason Tartick Co-Host: David Arduin Audio: John Gurney Guest: Krishna Subramanian  Stay connected with the Trading Secrets Podcast!  Instagram: @tradingsecretspodcast  Youtube: Trading Secrets Facebook: Join the Group All Access: Free 30-Day Trial 

It's more than money, and if you are new to more than money, I should tell you, it is the second episode that we have launched per week under the Trading Secrets podcast. Every Monday, we have a Trading Secrets episode. Every Thursday, we have a More Than Money episode. This is the sixth episode, and the numbers so far have supported keeping a second episode per week. The whole idea of this episode, exactly what it sounds like. It's more than money. Whether we are bringing on founders and CEOs and talking about intricate business things,

or we're literally bringing on someone like my mom or friend or an update for my personal life or a therapist or a sleep specialist, the whole idea behind more than money is focusing on our health. and our happiness and business at deeper levels than we would get at trading secrets. So some days we'll get a founder, CEO, other days we'll have a therapist, other days we'll just be talking life, we'll have to see how it all evolves. But this week, we have the CEO of Captivate, which is one of the largest agencies in the world. But he is no stranger to business. He has exited companies selling for millions and millions of dollars. We'll get into that. But again, with this episode more than money, we talk about what continues to keep motivated.

what the creator economy looks like, all the moving parts, whether you have social media and you have a following or you literally have one follower, there's so many moving intricacies. And we know this is a big topic, whether you're an influencer or not affecting all different businesses, especially when we look at the TikTok ban. You know, the latest with the TikTok ban is TikTok is actually now suing the United States. It's suing the Fed, saying it's unconstitutional for what they're trying to do. And the fact is that they could not sell off their U.S. business in the time period that they have allowed for so many reasons. And the time period they allowed for was 12 months. Now, based on the lawsuits and everything that stands today, this will be going to the Supreme Court. And at the earliest, at the absolute

earliest, TikTok would be banned in 2026. But something tells me there's going to be a lot of scratching, a lot of clawing, a lot of fighting as there are over half of the entire of the entire country is engaged with TikTok. And it has a huge impact on our economy, small businesses, and our overall economics. So we'll see what happens. It'll be interesting. And we'll talk to Krishna about that. But because this episode is more than money, I got to say, there's a huge holiday on Sunday. Don't forget it, Mother's Day. There's such an important holiday where we honor mothers all over the country. And so what I think I want to say, say about Mother's Day is a couple things. I feel so grateful and so lucky and fortunate and

blessed that my mom's still alive, that I have a great relationship with my mother, that I talk to her probably every other day, and that I do have so much, so much admiration for who she is a person and so much fortune that I have two parents that love each other and that are best friends and that I got to see that. I know that's not the case for most. And, you know, I also want to recognize that I understand how tough of a holiday Mother's Day could be for the mothers that we've lost

that are no longer with us or for hardships that are happening amongst families. There's just so many moving parts with holidays like this for the good and the bad. And I just want to let everyone know, regardless of your situation, I'm sending you love and energy on a day like today and a little shout out to my mom, Mama Kaluche,

who will have on more than money, but you are the backbone to our family. You have taught me such an incredible amount that has really determined who I am as a person. You've built my character. You've taught me right from wrong. You always taught me how to look in the mirror and take accountability

instead of pointing the blame. I remember I'd be a kid and I'd be like, well, I was the teacher, it was the coach. It was never the teacher or the coach from your perspective. It was how can you learn, Jason, from what you did wrong? Let's stop blaming people. And I will say, because of the parent you were, mom, I developed such a respect for you.

I didn't want to let you down. And I think part of the reason I was a good kid really never got in trouble was mostly because I wanted to make you proud and I wanted to show you the respect I had for you. And I love you dearly. You are the best mom. Make sure everyone out there gives their mom a hug, a kiss, a call, or a gift. Mothers are so, so important. So it's a beautiful day. Make sure to shower your mother with love. This part of more than money is the most important part. But let's ring in the More Than Money episode with the one and only, the CEO of Captivate Krishna. Today we are joined by serial entrepreneur and angel investor in the digital advertising

and marketing space. Krishna Subramanian. Did I do it right? Yeah, you did it. Perfect. I nailed it. We were practicing it before. And I said with his last name, I said, that's the coolest last name. It's like the Hulkomanian. Krishna is the co-founder and CEO of Captive 8, which states. tune, guys. I have done influencer deals with Captivate. Our agency has worked with Captivate. They're an influencer marketing platform that organizes social data and provides products and services that connect brands to content creators. Prior to Captivate, Krishna co-founded four companies throughout his career, including Blue Lithium and advertising business that sold to Yahoo for $300 million in 2007. Krishna's resume in the Tech and

marketing space has been nothing but a success. And he frequently appears a media outlets such as CNBC, Bloomberg, Wall Street Journal, and New York Times discussing topics and advertising and the marketing agency. We are so excited to have Krishna on all things from starting the business, executing the business, exiting one for 300 million and bringing you a business to the NASDAQ. I mean literally A to Z. Krishna, thank you so much for being on this episode of More than money. Thanks for having me. That was an amazing intro. By the way, like, as you're reading this stuff, like, I've had the pleasure now of doing, like, so many intros and there's some people I read, I'm like, oh, it's pretty cool. And then I read some people, I'm like, yeah, okay, the future's

bright, but let's get it going. I read this. I'm like, this is just, like, your resumes and say, when you hear this stuff, like, did you anticipate and forecast all this stuff to happen that's happened to your life at such a young age? Not at all. And it sort of goes back, back when I was going to school, you know, medical microbiology. My plan was go to med school, become an orthopedic surgeon. So none of this was supposed to happen. It was supposed to be a completely different life. And so what was the turning point from going into, you know, medicine and biology to literally becoming a world-class serial entrepreneur? Yeah. I went to undergrad at Davis, was going to med school. I needed to take a year off. I was just getting burnt out. Got into this program at the New York

Academy of Medicine, moved out to New York, was living in my uncle's basement in Queens, doing research during the day, coming home at night, building websites, apps, and just trying to find a way to get out and move out of the house and move into Manhattan. And, you know, one thing led to another, started skipping research, started meeting really interesting people. And that's where, you know, I was like, I need to give this tech thing a chance. And that's where, you know, really started to lean into, like, blue lithium. And that's where that idea that really sort of formulated. Very, very cool. Okay, we're going to get into the influencer marketing guys. I know you're excited about that, the numbers, the trends, all the things from a co-founder and CEO. But before we do,

we have to talk about. We got to extract as much as we can from Krishna as it relates to these companies. He founded and exited. Let's start with blue lithium. I mean, you know, you co-founded this in 2004 and three years later, sell it for $300 million. It's the fifth largest ad network in the US. It was the second largest in the UK in 2007. I mean, how in the hell did you found a company in 2004 and exit it in 2007 for 300 million? What's the trading secret there? I think a lot of it is, a lot of it is timing, right? And, you know, I think part of that is figuring out how to navigate what's going on in that space, do something really, really well. So back at that time, everyone was talking about behavioral targeting. No one was really doing it that well. We focused in on retargeting

specifically. So if you think about like, you know, that long ago, right, in 2004, 2005, everything that you're seeing today is normal, right? You go to Nordstrom's website, you look at a pair of shoes, you go to Facebook or somewhere else, and that those same shoes follow you. So back then is something that we did, and we did really well. We got a pixel up on MySpace's homepage, on Yahoo's homepage. And that started to get us so much data. And that really helped us just differentiate what was going on in the space. Okay. So for my 101 listeners out there that have certainly been behavioral targeted and retargeted and probably clicked on those shoes from Nordstrom and bottom. Can you just explain a little bit about what Blue Lithia has done

and exactly what those two things mean if they don't know? Sure. So Blue Lithium, if you think about it, from an advertiser standpoint, the biggest thing is how do you find the right person to show your ad to, right? So that's what advertisers want. So we would partner with thousands of different websites and publishers. So publishers being like a Yahoo or MySpace or CNN, ESPN. And then we would have to figure out every time a user goes to one of those websites, how do we identify which advertiser to show to that specific user? So when Bob comes to this, you know, Bob goes to ESPN, what do we know about Bob? Where is he sort of, what is he looked at? What are his favorite things? And how can we sort of sort against our database of advertisers? And in milliseconds, say,

here's the ad. That's perfect fit for Bob. And so we were doing that and really just focused in on the retargeting aspect to make advertisers smarter, meaning as opposed to just buying every impression, right? We're saying just pay more for the impressions that matter the most. And that's sort of what our secret sauce was. And I know it's pretty implied by the name of it. But for people that are still a little lost, retargeting, can you give them a breakdown of when they've been retargeted? Oh, yeah. So today, you're going to retarget it everywhere. You're getting retarget it from your desktop to your phone, to your TV, which is just kind of crazy these days. But let's say you go to any retail website and you're essentially looking at specific products and then you start to see

that same product following you around somewhere, right? So Instagram is a perfect example now. So if you're on your phone and you're browsing on Nordstrom and then all of a sudden you see an ad for that, right, you're getting retargeted. And it's gotten even more sophisticated. So let's say you go to Alaska Airlines and you start looking at flights and you've signed in, but you leave. You might get an email saying, hey, Krishna, you know, you forgot to finish booking your flight to New York. And that's like another form of retargeting. So retargeting is really evolved.

And like how people build these profiles around people is definitely evolved too. Okay. It's fascinating because this is 2023 and we're talking about now, but you were doing this in 2007. I got to ask this question for my viewers at home. They are getting retargeted. They are buying. Maybe they can't afford those purchases.

So they're actually trying to minimize their impulse clicks because they're retargeted. you are part of the guy that, like, helped create this. So give them some inside scoop as to how they could possibly avoid it if they are maybe impulse. Man, that's tricky, right? Because that's all. You're like, my life was designed for them to click. Yeah.

Well, so now I've sort of moved on, right? And we think about influencers. And influencers is a different part, a different type of, like, impulse buy, right? And creating this emotional connection with folks. I think just advertising in general is going to evolve a lot because cookies are, essentially going away. So doing a lot of the retargeting, doing the behavioral profiling is going to be a lot, lot harder to do. And people are going to have to use different types of data and different things. So it's just like the, like, e-commerce and like online shopping is just evolving

on its own. Gotcha. So if that is a problem, would you say one like simple trick would be when the websites do ask, allow cookies or not? And you have the option to click not and still proceed. For those people, would you say, if you really feel like you're getting stuck, probably hit not click, not cookies? Yeah. I mean, that's like, that's an easy way right now. That's an easy way. All right, guys. At least you got something from the mastermind here. All right, but in 2007, and I want to understand just the business model real quick, is you would go to a company like ESPN or like a naturally high-trafficked website group, ESPN, NHL, NFL, whatever it is. And then what you say to them is purchase our services, and we will increase all of your throughput and your pull-through ratios on your ads. And as a result of that, you're going to generate more ad revenue. Is that kind of the model? 100% yeah nailed it yep and then when they contract you and they pay for whatever it is the work that you're doing is it is it a lot of manual labor with people doing this day and day out or is it actually like a product they're buying oh it's a product so it's completely automated because if you think

about the speed at which you have to identify which ad to which person at any given time it's got to be so fast right and so that's it's all automated so we would have code that would sit on a publisher's like on ESPN's website, and then that would call our ad server to say, here's what we want you, here's the ad that we want to serve at this second for this customer, things of that sort. Okay. And I don't know if you could show this or not, but my curiosities are driving me as per usual. If someone wants to, like if ESPN wanted to buy something like this,

what do they pay for this type of product? So you could think of what a publisher might be getting paid, right? So ESPN's not necessarily paying for the product. They're getting paid for their inventory, right? because they have all of these users and eyeballs and these eyeballs are buying products or they're they're enticing advertisers to want to run their ads there so publishers get paid advertisers do the paying a premium you know tier one publisher might get let's say $30 for every 1,000 views so that's like one way of thinking about it okay interesting there you go and then of that so if they got

a CPM of 30 bucks per 1,000 views what would they have to pay for the product of that like a dollar or two? So the publisher doesn't pay anything. Oh. Yeah, the publisher won't pay anything. The publisher gets paid. And so the advertiser is paying to say, I'm willing to spend, you know, 30, 40, 50 dollars for this person. So once you start identifying that this is a perfect fit for someone, right? So let's say of those thousand impressions that a advertiser sees, they might be willing to pay 10x for one user. Sure. Because they know that user went to Alaska Airlines, added the flight to the shopping cart, didn't buy it. So they know there's a higher likelihood that we might be able to get this person to actually convert and do something. Got it. And so then they'll say, I'll pay $100 for this

person. So it's the company that's advertising that's going to pay that premium. Amazing. And 300 million in three years, was that a vision that you ever saw coming to fruition? Or was it like after a year or two, this just took off in a direction you didn't forecast? Yeah. So being a part of that founding team, I think the CEO was definitely like had his eyes set on this really big, and opportunity. I think the pace at which it happened was definitely we started to see how things were growing and evolving so quickly. And I think that was a bit of a surprise, but it was still an opportunity where we're like, we got to go bigger, faster. And, you know, there's more and more competition. And I think one of the things that you realize within marketing, everything has

a period or window where it's exciting for an advertiser, right? Like, whether it's behavioral targeting or influencer marketing or, you know, whatever it might be video advertising, it's sexy, for a certain period of time, and then if you don't innovate and lead an advertiser to the next step, you end up becoming stale and boring, and then you just, you know, you're treading water. Yeah, that makes sense. When I hear the number 300 million, I instantly go to, I wonder if Yahoo got the return. If you look back on that, do you think Yahoo made that a good return? I mean, I think they probably made like 10, 20 X. Just because of the speed in which that whole entire area evolved. Yeah, yeah, exactly. All right, good move by Yahoo, good payday for you.

co-founder of this company, 300 million in 2000. Mob clicks you then found in 2008. And we are going to get into all influencer marketing guys. You just hang tight. But you found it. I always scratched my head. I'm like, dude, you're a co-founder. You exited a company for 300 million. Like, you not have enough cash in the account to be like, I'm going to take a few years off. Like, what is the motivating factor after you do that to not take a little breather? Yeah, I know. It's kind of interesting. So right after we exited, I stayed at Yahoo for maybe three months or so. And it was I got out. And then I just really wanted to know what was next, right? Was it like video advertising or mobile, mobile advertising, mobile analytics? And really just dived into it. And like the big

thing for me was how do I start to learn from other folks that are in the space? So I got three consulting jobs. And I ended up being busier than I was while I was working. And these were three different people, right, three different CEOs that I just thought were being really smart in the space. And we're trying to figure out like what do they see as a white space? Why are they excited by this. What is that, you know, what's motivating them to do that? To just generate more like ideas and just like get more exposure. And while I was doing that, I was like, man, it's time to, it's time to jump back in and do something new. This is pretty cool. So you, I think a lot of people at home, like pay close attention here. When you got that consulting job, you didn't actually do that

for any type of money motivation. You did that to be aligned with the brains of the people that you thought were best in the business or world in that world. Exactly, exactly. And I was just super motivated, like, you're spending all of your time doing this. How do you look at it? And they were all slightly different, right, in different spaces. And, you know, one was Pubmatic. They're public today. That was a, it's sort of like a supply side platform, right? One of the largest players out there now. Another one was Terescent, which was doing like almost like smart ads, dynamic ads. They were required by Google. Another one was ad camie. So it was all around this digital marketing space and just different angles on it. Okay, absolutely fascinating. Are you motivated by

money? I'm not. Interesting. What does motivate you? I'm definitely motivated by creating impact and I'm motivated by winning. And so I'm definitely motivated by, I think all of these, you know, different companies are, it's super exciting because there's no book on how to build a mobile advertising network or how to build influencer marketing when we started it. And so being able to define what's happening in the space, being able to define, you know, what this means for an advertiser, you know, what it means for a creator or a publisher, I think that becomes really exciting because you're essentially changing the world and you're giving, whether they're app developers or creators, a new revenue stream that allows them to go build, you know, and fulfill their

dreams. It's really, really, really cool. It's always interesting that the people that are the least motivated by money are the people that end up backdooring into the most amount of money. It's really, really cool. Tell us a little bit. Before we get into Captivate, which I know my listenership is super excited to hear about. MobClicks that you co-founded in 2008 and that you ended up exiting in 2010, another two-year turnaround. Tell us a little bit about what MobClicks is. Yeah, so MobClicks essentially helping app developers make money off of free apps. So back in 2010, probably 80% of the ads that you saw on iPhone apps were coming from us for better or for worse. And so what we sort of looked at is, you know, the App Store only

had free apps at the time. Paid apps didn't exist. So how do we create a revenue transfer? for these folks. Mobile ad networks were only running on mobile web. No one was running on apps. So we just went at it and said, let's build an SDK. Let's give analytics to app developers and let's start just plugging in mobile ad networks and online ad networks. So we create this revenue stream for app developers. So we didn't build an ad sales team and go sell directly to advertisers. We just took all the advertising inventory that was out there. And we created a really, really strong developer community around everyone that was building apps. Okay. So let's bear again, let's break it down 101. Words with Friends, right? The app back of

the day, we all know it. I think it still is free, but you can upgrade. But it's free app. And then obviously you guys back at home, you see all those ads when they pop up there. So MobClicks was essentially responsible for taking a free app like this. And then being able to put ads in these apps for the app developers so that they can monetize at a significant value without paying anything for the actual price point of the ad. Exactly. Got it. And so when that had to absolutely revolutionize the app game.

Oh, it was insane. Was anyone doing that? At the time when we started, no. And then the way we were coming at it was very different. They're like really big on mobile ad networks, right? So there's like ad mob that got acquired by Google for like 800 million, Quatro, which Apple acquired. So there was a lot of these really big mobile ad networks.

But no one was focused on the app space, right? Because the app space was so new. knew like what should we be doing should we lean into it or not and for us because we didn't have you know we didn't have any other legacy products or business we just leaned into that and we just said we're going all in on the apps and said cool give us your app at inventory we'll run it on these apps words with friends was that was one of our apps and in sort of seeing the amount of like impressions and in ads if these guys were generating right it was going from like thousand dollars a day to 30 thousand dollars a day to like 50,000 dollars a day and

And so things of that sort just became really interesting. That's crazy. You then go public with this company. Is that correct? Yeah. So we got acquired by Velti. Velti was public on the aim in London. And so they needed U.S. ad revenue to go public on the NASDAQ.

And so they acquired us. And then we went public on the NASDAQ. And it was a super exciting experience just to see that sort of company, you know, grow. And being a public, being a smaller public ad tech company, it was the first mobile ad tech company. And so, you know, being able to explain that revenue and that concept to public, you know, street investors was something that was very new and difficult. It was hard for people to understand that. It was definitely a bit of a roller coaster, but it was really exciting because Velty went on to acquire four other companies in India, the UK, and China. And so it was just an awesome learning experience at another level, being able to integrate different brands and think about just not advertising, but mobile marketing, mobile messaging,

all these different things. So we're getting kind of, you know, tired and wanted to move out. We tried to buy MobClicks back. They're other companies and myself. And we had a battle against Telefonica. Telephonica won and just have deeper pockets than us. And, yeah, and then that, you know, we ended up leaving and taking a little bit of time off then. Does MobClix still is still in existence today?

It still exists, yeah. Wow. It's kind of wild to see your baby you created and a publicly traded company takes it. Then a privately held company buys it and you can't have access to it anymore. Yep, and it's just there. It's crazy. Yeah. Interesting.

But you still got those dollars in your bank. And that's really all that matters going forward. Okay. So then you co-found. I mean, the story is just remarkable. You take some years off. At this point, I'm going to make an assumption. I don't want to assume, but you probably don't have to work anymore.

I guess it depends, right? Like, for my mental sanity, definitely needed to work. Got it. Okay. And so, you know, we took some time off my other co-founders and myself, and we're like, we need to get back in shape. And so the first thing we did is we signed up for an iron man and did you do it so we signed up for a sprint along and then the full iron and you know i and it was

a year out so you know it was it was great to just get in that mindset of let's let's start training and all of that stuff did the sprints and then you know the second one and then i was like you know this isn't for me i'm not i'm not going to be able to do this but senile my my other co-founder he went all the way and he did he did you know he did the full iron man like the mental toughness is just insane on that and and was able to complete that and so at that point you know we're like great Like, we can, we can sort of conquer anything we put our minds to. And so we started to look around, like, what are other ideas and things that are going on? Spent a lot of time just thinking, like, how big could different markets and opportunities look?

And then we started running into just craters, and they just kept coming up, you know, over and over again. Okay. And that's where captivate. I also find it just hilarious. Like, you accomplish what, like, 0.0001% of people in the world accomplish, bringing companies public and exiting to Yahoo for 300 billion. And you're just like, okay, let's go find the next big task that no one in the world can do. Let's go run an Iron Man. I love the mentality. All right.

But then you start with Captivate. And so this is 2015. What did influencer marketing looked like in 2015? And how drastically has influencer marketing changed from 2015 to 2023? Yeah. So back in 2015, right, it was influencer marketing wasn't a thing at that time. It was like it was YouTube, YouTubers. It was MCN, right?

some multi-channel networks, and that was the big thing, is there was all of this YouTube content that was coming out. There was a lot of kids that were exploding in views on YouTube, and there were agencies and companies that were trying to figure out how to make them more money. And at that time, it was, it was sort of maybe what was happening in like the music industry. You would see a young creator, influencer starting to hit that rise. You would come in and say, great, here's how much money I can give you. I'll give you all this money up front.

I own all of your reviews and all of the revenue you're going to generate over the next year or two years. And, you know, you sort of make that trade. But these creators, right, started to outgrow the revenue that was promised them, you know, for the majority. Because YouTube started exploding. There was all these other platforms that were coming out. And then the notion of these multi-channel networks started to evolve, right? Because before it was like, let's figure out how to get sponsored dollars to these YouTubers. Let's figure out how to manage their ad words, you know, and things of.

that sort. And so that's, that's really where it was. And, you know, I think like some of these these conferences like Comic-Con and, you know, VidCon, right, like it was all about YouTube only. And that's to where we are today, right? I think it's become a, you know, a must have in every marketer's sort of marketing strategy. It's no longer these test budgets. They're actually line items. There's teams that are built around it. There's agencies that, you know, are built to to manage these multi-million dollar budgets. And there's so many different parts of influencer marketing or creator marketing and things of that sort.

Okay. And so for anybody that might be a little confused on where Captive 8 stands in this entire process of influencer marketing A to Z that you've mentioned, can you let us know, like, what is Captivate's SecretSauce? Where is your space and all these different moving parts with influencing? Yeah, yeah. So we have a platform that we license to enterprise brands and ad agencies and it allows them to essentially do two things. It allows them to think about partnering with creators and sort

of, let's say, from a top of the funnel standpoint. So what that means is, let's say, if you're advertiser like Bud Light, you're spending money on TV for the Super Bowl, how do you take that money and bring it into social and creators? So we have a platform that allows you to streamline that entire process by finding these creators, negotiating with them, contracting with them, handling all of the content approvals and measurement analytics just seamlessly in this platform. Over the last couple of years, we said, well, you know, depending on where the economy goes, it's not just TV dollars that matter. It's also, you know, full funnel attribution.

So how do you drive sales? And so we started to figure out, you know, how do we get into the social commerce space? How do we integrate with like Shopify and Woo Commerce, things of that sort? And really allow these brands to build enterprise affiliate programs to pay creators on a commission basis. So what this is is you're only paying every time a creator drives sale or drives an install or, you know, things of that sort. And so for creators that are out there listening, that might only have like a thousand or 10,000 followers, and maybe there's a couple of creators who have millions

of followers listening. What is, from an affiliate marketing standpoint, what have you seen on the low end per conversion and the high end to paid to the creator? Oh, it is insane. I think when we're looking at affiliate in just like conversions, right? I think the biggest thing is, one, is looking at the number of followers, right? You have. It is, you know, you can have like 10,000 followers on Instagram or 10,000 subscribers.

on YouTube and you could be doing $20,000 in sales, right, over the course of a day or a couple days, right, whenever you launch your content. It's a very different creator, right? Because they're all, let's say, I'd say 150,000 followers and less. It's all about creating that content, having a very focused niche audience, maybe around like fashion and, you know, retail for, you know, for sort of like, let's say, like retailers that are excited about just buying what this person is recommending. And so, yeah, it's very, very different. but the amount of money that people are making is significant. Okay.

And so people that are creators in that exact realm that you had said that have no idea where to turn, how do they get a hold of a company that might want to work with them from an affiliate marketing standpoint? One way is going to captivate. And we have this handraising feature. So as a creator, you can come in and say, here are the brands that I want to work with. And if they're not already, if they're not already on the platform, then they'll get a notification. And I think there's two ways of thinking about it. Typically, on the affiliate or performance side, you can get access.

creator, if you meet those requirements, you can get access to those deals instantly. Whereas when it's like TV dollars coming over, there's, you know, there's a lot more in terms of like the marketing strategy and the brand fit before you get approved to running. Got it. We've seen some creators come on and talk about like their Instagram posts and stories. Some people have talked about the fact they're paid $1,000 to $500 for a story. We've had some people come on and talk about their $300,000 post, one post, right? So what is the variability you're seeing, not in the affiliate side, but in the actual influencer marketing, on an Instagram, a TikTok, a YouTube for execution.

What's like the high end and what's like the low end of the type of deals that you guys run across? I'd say the high end are probably in like the millions, but it's not for just one post, right? But it goes over a series of posts, let's say maybe three or four over the course of a year. And you're building this long-term relationship with the creator and the brand. I think part of what also commands that those dollars from the creator is it keeps them out of the category, right? So if you're a really strong beauty creator, you can't work with other brands at that time.

And so it pulls you out of that category. So you're thinking about term and usage. And then can you take that content and run it on TV, you know, things of that sort? So when you see like King Batch running, you know, like ads on the Super Bowl on TV, you know, for Sprite or Jack in the Box, he's definitely getting paid, you know, a significant chunk, not just for social, but across the board. But for the exclusivity in general. Yeah. Okay. What's your take on? There's so many, you know, there's younger generations now where their dream job is to become an influencer. And there are so many naysayers saying this industry is done and it's dead. When you see the historical performance of where we've been up until 2023 and you see all the crazy moving parts ahead, like maybe TikTok being banned, but you also see the growth. Where do you see influencer marketing going? And do you think that these younger generations that have this desire to want to do this full time is a sustainable.

career that when they're prepared to do so, it's going to still bring in the dollars that are there today. Great question. I'm biased. I definitely think there's a huge opportunity. I wouldn't rush to drop out of school to go do it, right? But I think the way I really look at it is creators are the new SMBs, right? Small to medium businesses. And so they need all the tool sets that a small to medium business would need. They are leveraging these social channels, whether it's TikTok, Instagram, YouTube, Twitter, whatever it is, to reach their audience. And historically, an SMB might be using email or phone number or whatever it might be. So the same sorts of strategies that you think about how you market to your audience to get them to do something is a skill set that all of these SMBs want.

And I think the, let's say the holy grail for a creator or an influencer is not all the branded content that they get, but it's to build a brand themselves. Right. And so how do I take this and now go build a beauty brand or build, you know, a whatever might be, something that's, not connected to just sponsored post. And I think you've got like this emotional connection with your audience. How do you take it and do something more with it? So I do think there's a huge opportunity. So that's like the quintessential, like I would say the Logan Paul Prime example, right?

Oh, exactly. Build Prime, get a massive valuation. And you'll make more than you'll ever make from a sponsored deal. Okay, a lot of people are curious out there just because they follow a lot of influencers. They're always wondering themselves, how much these people make? And there's really what we've learned is there's no really true algorithm. to understand. You could have someone with 2 million followers in the wrong demographic for marketers, make less than someone with 200,000 followers with the right demographic. How do you back into

like what someone should be paid based on what their landscape looks like? What are things you're looking at? Great question. I think there's so many different components. One, right, one variable is how bad the brand really wants to work with the creator and how bad the creator really wants to work with that brand. That's always like the biggest sort of variable, right, that can change price no matter what. If you love Mercedes, you know, you might work with them for half your rate. And if you hate, you know, Listerine, you're going to charge them 10x. But I think some of the things that really important are really important for a brand is understanding where that audience of that creator is. Are they based in the U.S.? Are they potential type of customer

that they would want to reach? What is the, like, the age and gender of that audience? What is like the brand affinity of that audience? What's the engagement? Right. So, you know, if this creators posting content, is the right audience actually going to see it? And are they going to resonate well with it? And if they do, like, what is the sentiment of that? What is, you know, a brand thinks about like brand lift or purchase intent? Those are all like different metrics that brands will really look at and lean into to justify spending more. And the big question people ask out there is, how do they get all this metrics? How do they know that? So that's obviously what they want. But how do they go to all these creators and then find that out other than the insights

that creators give them. What are tools they use to understand what type of impact a creator will actually have on their campaign? Yeah. Captivate? Us. Hey. Well, then what do you guys do? How do you understand the success of a creator, the impact of a creator? What are the things you're looking at? Yeah. So those are all the things, right? So when a creator signs up, we're asking them a series of questions, right? We're asking them, are you married? Are you a parent? How old are your kids? Do you own a pet? Are you allergic to anything? Do you have curly hair? So we build this database of first party, you know, creator data. And then brands are, you know, can sort of tap into that even more and start to just build out different data sets around this creator. Creators are

authenticating and then we're able to get things like their audience breakdown or age and gender breakdown. And you start to build more and more profiles around these creators. Then, you know, let's say creator is on the affiliate side and you know that their audience is very likely to drive sales for retailers, right? You can even narrow it down to female retailers, female retail brands, or even thinking about, you know, who responds to short-form video content versus long-form video content, all of those come back into recommendations on the type of creator for the type of brand, all of that, and the type of content. Okay.

We have heard rumors out there. Now, well, let's omit OnlyFans, right? We know people on OnlyFans have a ton of success, right? Let's omit that. We've heard that creators will get identified with some type of, like, rating. And we've been told that the rating is similar to like when a outside consulting group will rate an actual movie. Is it rated R, PG-13, PG-G?

And then we've been told from a profitability scale, it works in an inverse manner where G-rated content usually would go at the highest premium, then PG-then PG-13, then R-rated. Do you agree with that analysis and that type of feedback we've received? That's interesting. I think it really depends on the brand, right? So if you're advertising against a G-rated audience and that's your target audience, then sure, right, I don't think that's necessarily, you know, the premium dollars for everything. And sometimes when it's a smaller audience, you know, maybe it's like an adult audience. Like let's just say, you know, like liquor, right, or beer, you're looking for like LDA compliance and that needs to be at like 87%, you know, above 21 and up.

they're probably paying a much higher rate for a different audience set. Okay. I think if you think about like luxury auto, right, they want to find people with high household income. And so it might be a different sort of audience and they might be willing to pay more. Thinking about like pharma, right? It's like there's not a whole lot of what they might want to target. But when they find those people, they're willing to pay a lot more. Interesting.

Okay. So you have an influencer that has the same subscribers, the same followers, the same followers. the same demographic, the same engagement. Everything is identical. And it's on YouTube, it's on TikTok, it's on Twitter, and it's on Instagram. We're going to go with those four. And if you think I'm missing a big one, you tell me, where are they going to make the most money? Everything's same across the board.

If everything's same across the board, it depends on the strategy and the audience that you're looking for. Generally speaking, YouTube is significantly high. and I think it's just, you know, premium content and thinking about it that way, and it's always commanded this higher price point. And so that's, like, if you say all things are equal, YouTube is probably just generally higher. Interesting.

And then what would the list look like from down there? I think Instagram and TikTok are probably very similar. You can put them side by side. Okay. And that's changed, though. Like, wouldn't you say that it's pretty much been Instagram, Instagram, and now you think TikTok has caught up to Instagram where they're pretty much level set?

I do, yeah. And I think what's interesting, right, is from a brand perspective, when you work with a creator on Instagram, you know what that audience is going to look like. It's just that creator's audience. When you work with a creator on TikTok, you never know, right? It might go beyond that. Yeah.

And so once you go beyond that, then it becomes, you know, there's this huge value ad for brands. What about Snapchat one I didn't list out there? How do you see that in the ranking amongst all those? I think Snap has been interesting just given like the new types of folks that they're bringing on board and they're being more open to creators, especially, you know, fairly recent. And so it is an uphill battle given, you know, when they first started. It was like it's a messaging platform. We don't care about creators.

And now it's all about we care about creators. We want to pay them and we want to create an ecosystem around them. And now it's just how do you broaden that even further out? Very, very, very interesting. There are so many moving parts. But let's ask you about this, the whole TikTok ban. I mean, how much does this impact your career? I'm sorry, captivates like forecasts.

How much does it change things for influencers? What's your take on it? Good question. So we are partners with TikTok. So there's probably certain things they can't say and can't say. I think for us, right, we're really trying to make sure brands are educated in knowing how to create content that performs really well for different platforms specifically. So not just taking an Instagram campaign and running it on TikTok.

And I think the big thing is just thinking about diversification as well. So as you build these marketing strategies, you know, how do you sort of look at what needs to run on YouTube? what needs to run on Twitter and what needs to run on TikTok. I think if there are, you know, let's say sanctions or bans that are put on, it's going to be this long process that I feel like we'll get a lot more insight into along the way. We don't see it as something that all of a sudden pops up tomorrow saying, hey, this is gone, right? But I also am not in the inner circle, so I don't know what could happen at any given time. Okay, we'll see.

Question mark there. Let me ask you this. Same exact question as far as the setup, same followers, engage. Everything is the same across all forms of social media, and the person is tracking their revenue. And in 2020, let's say they made 100 grand, 2021, they made 125 grand. Let's say nothing changes. Their engagement is just the growth of the area. By 2022, they're making 175.

By 2023 first quarter, they're on track to make 225. Again, no engagement followers. Nothing has changed. How would you forecast this influencer will see a shift in revenue in 2024 and 2025? same less more what are your thoughts without diversifying anything they're doing everything is consistent so I think the idea of this is like where's the industry headed do you think that these creators will pay less because there's more creators out there but they haven't grown they haven't taken off but they haven't declined everything stayed consistent

do you think their revenue to stays consistent or do you think it fluctuates with where the industry moves and how it moves I think I think it essentially starts to go up right so I think they'll keep going up within that same growth rate. I think advertisers will start to get smarter on knowing who to pay for what, right? So you're going to start to know, get a better understanding of this creator is performing really well for this category, and those category of brands are going to want to be there and be in front of those folks. And I think that will justify an increase in price points. So someone like a dude perfect, right, like create these amazing videos that go viral almost every single time. But there's probably a category of advertiser that will continue

to lean in more and more who's willing to pay for that. And I also think this shift from TV is going to continue to happen. So sure, there's more competition, but there's also more eyeballs. There's more platforms that are going to come out, right? Like guarantee in 2025, there's at least two new platforms that are out there. And I think creators are at that forefront of being able to diversify their audiences as well. Very, very, very interesting. When do you think, think if you had the magic crystal ball in front of you, when does that level off for that one creator? That specific creator who hasn't really done much, they're staying consistent, they're engaged. When do you see the whole idea of influencer marketing shifting to that market's no

there or no longer there or it's going down? Yeah. I mean, I think there just has to be a slight shift in how they're thinking about things and there's more opportunities, right? And so if you're just treading water and the people around you, I think part of it depends on how fast the people around you are moving, right? Like, if more people are moving to, like, substack and more people are doing things like Patreon and diversifying their revenue stream. So, you know, they're getting some dollars from sponsored content, some dollars from the platforms, some dollars from gifting, some dollars from their subscription services or premium content, some dollars from affiliate. All of a sudden, your revenue stack looks so different than what it did a few years ago.

And I think that revenue stack is going to be important to, you have to drive that and control that to continue moving up. So your take is it's your entrepreneurial drive, it's your revenue stack. But the industry and the dollars are being deployed to these spaces and these networks from your vantage point are only going up. Yeah, 100%. If we look at, you know, WPP, one of the largest agency holding companies, just over the last two weeks, bought two different influencer marketing agencies. They bought the goat agency out in the UK. They bought obviously out in the U.S. They're looking at this as like a $22 billion industry.

So one of the largest agency holding companies is saying, we need to specialize and invest in this. That means the dollars that they're seeing are only going to exponentially grow. Interesting. And with all your exits, obviously, captivate, is at the forefront now. What's the plan?

Do you foresee potentially exiting? And what you do and if you do exit is the premium asset value in this technology that you created a Captivate? Yeah, so we're building everything around this platform and we're taking it, you know, we took it from top of the funnel to full funnel. We've got lots of exciting plans around just the creator ecosystem as well. So not just thinking about it as a two-sided marketplace, but thinking about like what happens when it becomes like a three-sided marketplace and adding in consumers.

And so for us, it's like a super exciting time right now to just be heads down, continue building innovating, and thinking about how we really lead our advertisers and brands into what's next. And I think that's the big thing is how do we help show them, here's what's coming up in 2024 and 2025. Here's how you think about it today. Here's how you start leaning in. Okay. Evan, I'm going to give you the chance. I know you're here and you work with talent management. One second, I'm going to give you the chance. If you have any questions, because I know your wheels must be spinning. If you don't have any questions, you don't have any questions, It's the one the only, the co-founder of Capt the Pate.

I'm going to end with this one, though. Influencers that come on here that have no idea what they should be paid. And there's such a wild spectrum of who offers them what for whatever it is and whatever channel they're bringing the impressions and the people to. How would you suggest or what advice would you give them to try and back into understanding what their value is and what price they should charge? It's a great question. I think if I was on the creator side of things, you know, maybe you think about it as like a $10, you know, CPM, right, or cost per follower and use that as like a starting range or benchmark, a lot of it's going to come down to what your engagement looks like, right?

So just because you have a million followers doesn't mean you should get paid, you know, X amount. But if your engagement is really high, that could skew up or down. And so that could be like a good place to start. And what's it average? What do you say is like a mean engagement rate that you should use is like? Like, okay, this is the average. Maybe like 3%. Okay, 3%.

So on the upside of that, you should look for a little bit more and the downside of that, a little bit less. Yeah, and I think if you're within a certain category, like a certain vertical or niche, I think that's where you can really start to command even more. Interesting. Okay. Interesting, interesting, Evan, before I wrap up with the genius Krishna and multi-successful entrepreneurial businesses and exits, do you have any questions you want to ask? He's got one. He's getting up. Here we go. Evan Saar, buddy. You guys know them.

Yes, Krishna, thanks so much for hopping on this podcast today. We very much appreciate it. We'd love to get your take on just the trends towards user-created content now, user-generated videos, where that's going, you know, what you're seeing out there in the market. Because I feel like, you know, from what we've seen on the talent management side, there is an increase and would love to just get your take on that. And sort of UGC content from creators themselves or just? And just like the whole market and how it's going. And if you could real quick, because most of the audience might not know, can you just explain what that is real quick? Sure, sure. So I think when you think about user-generated content, this is just looking at videos that a creator is just building on their own and just doing on their own and essentially posting across these different platforms.

And I think what you're asking is potentially being able to license that out to specific brands and things of that sort. Yeah, because I know where he's getting at with this. We are seeing a lot of inquiries for talent we manage of companies that are asking for your, user-generated content, right? And for people back home, what they're doing is they're asking for a creator to make three TikToks for them, that that creator does not have to put anywhere on their TikTok. They don't have to touch it, but that brand can use it as content for their social media channels. And then there's a certain rate associated with that. It's something that we've seen, I would say, pick up dramatically in the last year. So from your vantage point, you know,

how have you seen that impact the business? And do you see that continuing to grow? Yeah, perfect. No, I definitely continue to see that growing. I think it's huge because if you think about a creator, the one thing that they really care about is what their specific followers look like or care about, right? Because they're famous for whatever they've done and those people love what they're doing. And they don't want to be that sort of sell out to them. But I think for a brand's perspective, they really want to be able to take that content, run paid media behind it.

And I think that becomes a big motivation where they can actually control URLs or they can control, destinations and actually drive to some sort of purchase or drive to some sort of outcome. And it's almost the same thing of thinking about, well, what's next, right? I think creators are going to start building content that gets, you know, not just, you don't just take that content as a brand and run it on social, but you're going to run it on OTT or streaming platforms, right? Because that linkage is so easy. You're already seeing it, you know, go to programmatic.

And so I think that'll continue to grow. And that immediately increases the ROI of all these companies that are doing. Yeah. And we know the dollars are much less if they're just doing user-generating content. So, fascinating stuff. Well, Krishna, thank you for sharing your story, all your business successes, and of course, the whole breakdown of what you see in the influencer marketing space and what Captivate is doing there. Where can people find more of you or reach out if they have questions about things? You can reach out to me on Instagram, Twitter, KSub 15, Captivate's website, so just KSub at Captivate.com. Cool. And if you're a creator, go check out Captivate. It could be

life-changing for you. Krishna, thank you for joining us on this episode, Trang Secrets. Thank you so much for having me.