Poptent Hits $1 Million in Video Ad Payouts

by Mark Walsh, Monday, December 20, 2010, 7:00 AM

The buzz around harnessing user-generated video to boost brands may have peaked a few years ago, but startup Poptent has managed to find a profitable niche as a platform for crowdsourcing video ads.

Started in 2007, the company matches its social network of 20,000 independent videographers and filmmakers with assignments for mostly online video (but also TV) spots from major brands including Anheuser-Busch, Nokia and American Express. Think LinkedIn for freelance video producers complete with member profiles, work samples and a discussion board.

Each assignment is in effect a contest where brands select two or three commercials from the roughly 35 to 100 submissions each project attracts. Advertisers typically pay $7,500 per winning ad, although that figure is lately starting to climb to $10,000 as marketers compete to draw the most talented videographers, according to Poptent President Neil Perry, a former senior marketing executive at McDonald's Corporation and Monster.com.

The Philadephia-based company today announced crossing the $1 million mark in cash payments for contributors' completed assignments, with $10,000 awarded to New York City-based video maker Sean Cunningham for one of four winning ads for GE's user-generated "Tag Your Green" effort as part of its ecomagination campaign. Poptent.net usually has eight to 10 active assignments posted at any time.

A current project from Frito-Lay, for example, asks members to create videos inspired by its tagline, "We Make it Natural. You Make it Fun." "Since our traditional media will focus on the 'We Make it Natural' piece, we would like for the focus of this Poptent ad to lean more heavily on the 'You Make it Fun' portion of this tagline knowing that natural is another reason to believe that mom can have fun," reads the creative brief.

Frito-Lay is paying $10,000 apiece for three ads, and possibly more based on the quality of submissions. Poptent gets about 25% to 30% repeat business from advertisers, according to Perry, with Anheuser-Busch and Procter & Gamble each sending seven campaigns to the site so far. FedEx ended up buying nine ads this year at $5,000 after starting with just three for its "Think FedEx First" campaign aimed at small businesses.

The spots are clever, quirky and professional-looking, if not the product of lavish production values (although one circus-themed spot does feature a live elephant).

Unlike its video contributors, Poptent itself doesn't work on spec. It gets paid $25,000 up front for each assignment to help manage the process and screen submissions for any inappropriate or copyright-infringing material. Even with the video freelancer's fee added in, the cost is still considerably less than paying six figures or more for creation of a tradtional 30-second spot.

But Poptent isn't always leaving agencies out of the loop -- about 20% of its work comes from agencies rather than directly from brands. Chicago-based marketing firm Robinson Maites, for example, which works with FedEx, handled the ad buys via Poptent for the shipping giant. And Poptent worked with OMD on campaign strategy related to the GE "Tag Your Green" assignment. Boutique creative shops may also be among those submitting prospective ads.

Poptent's steady growth and profitability haven't been lost on investors. In October, the company received $3 million in first-round funding from MK Capital. That financing will help the company expand its 25-persoff staff, including sales and marketing employees, as well as grow beyond the U.S. market through its network of video makers in 80 countries.

Poptent is not alone in pursuing the "crowdsourced creativity" model, however, with other startups such as GeniusRocket and Tongal also vying for talented contributors and brand and investor dollars. GeniusRocket, for instance, touts a "curated crowsourcing" approach in which any member that produces for content for a project gets compensated whether the client buys their work or not.

Perhaps most crucial for Poptent's success so far is that advertiser expectations haven't been set too high. If a video spot goes viral, that's gravy -- but it's not something brands are counting on due to the fickle nature of the Web video audience, according to Perry. As many brands have found to their dismay, manufacturing a viral video hit is a dicey proposition no matter how big the production budget.
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Poptent raises $3M for crowdsourced video

Network of filmmakers have a hub for finding advertising projects that actually pay
Financial trends and news by Ronny Kerr October 21, 2010

Poptent, a social network for video creators formerly known as XLNTads, has raised a $3 million Series A round of funding, led by by MK Capital partner Yair Landau. The company also hired Andy Jedynak, a Poptent board member, as its new CEO.

The Los Angeles-based community is a place for video creators to build and display their portfolio, collaborate with other creators and actors, and, perhaps strangest of all for the amateur LA filmmaker, make money in video by creating commercials for advertisers and brands.

Companies post an assignment to Poptent, users on the site accept the assignment and submit their creation before the deadline, and then the company selects as many winning submissions as it likes.

Here’s the latest example of a project assignment from Intel, which already 50 people have accepted:

In our newest assignment, Intel is looking to purchase at least two :30-:60 second video that will build awareness and excitement around ultra-thin laptops featuring Intel® Core™ Ultra-Low Voltage (ULV) processors. Ideally, they’d like people passing this along to friends and family, with the end result of having consumers purchase these computers for their computing needs while on-the-go. Intel will purchase at least two videos for use, and their creators will each receive $5,000, a total minimum purchase of $10,000.

Sounds like a boon for budding filmmakers, who want to earn money using their skills, and for major brands, which want to cut costs and advertising expenses.

“As audiences consume ever more video online, advertisers need a high-quality low-cost way to reach them,” said Landau. “Poptent has cracked the code on successfully crowdsourcing commercial video providing its producer community great opportunities to generate highly original video for major brands.”

With over 20,000 users creating video for the site and repeat customers like Procter & Gamble, Nestle, and Anheuser-Busch, Poptent is already profitable.

MK Capital is a Chicago- and Los Angeles-based venture capital firm that invests in digital media, data center automation, software, and education technology companies at all stages. Previous clients of MK Capital include gamer video network Machinima, mobile location-based platform Geodelic, and digital media producers Generate. MK joins a group of local angels as investors in Poptent, which has now raised a total of $6.8 million.

Poptent says it will use the new funding to continue to grow, make new hires, and increase activity in sales, marketing, and client support.
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