07:29 AM

Strike Social Interview: 'Silicon Valley VCs Don't understand Advertising'


I had an interesting conversation with Patrick McKenna (above), CEO and co-founder of Strike Social, a Los Angeles based startup that focuses on Youtube-based advertising by large brands.

The company is able to analyze a brand's YouTube channel and also identify other YouTube channels that are a good fit for the client. Its technology works exclusively with Google's TrueView metric and AdWords. Here are some notes from our conversation:

- Brands can't easily see which of their Youtube content is working best. We can quickly identify videos that have viral opportunities and the brand can then boost traffic to those videos.

- We initially built our tool for agencies so that they could monitor in real-time the performance of the Youtube channels of very large brands. Our tool can analyze any Youtube channel and report on how it is doing, and how much is being spent on advertising. 

- For example, we discovered that Nike's Youtube campaign around World Cup soccer was far more successful than Adidas, which spent far more in advertising. 

- Google's TrueView metric has been controversial. It only counts Youtube ads that have been watched, rather than partially watched to prevent unscrupulous publishers from getting paid for partial views.

- The integration with Adwords gives brands a way to quickly increase the performance of advertising by using our algorithm and placing those ads on channels with highly relevant audiences.

- We know where a brand's audience is going and we can target those channels. Google loves it because the video ads perform well and this reduces advertiser bid costs. Poor performing ads are penalized by Google.

- We are going to stay focused on Youtube, that's where our expertise is rather than on Facebook or Twitter.

- The company is profitable and has 25 people with offices in LA, New York, Chicago, and developers in Poland .

- We make money from a percentage of ad spending on campaigns, working with mostly agencies that have Fortune500 clients. We do not charge a monthly subscription for our services.

- People can use the tool for free and analyze their channels, and their competitors, too. 

- We are bootstrapping the company. I have met with Silicon Valley VCs but they don't understand the advertising industry. I'd rather get a percentage of a $20 million ad campaign than get a monthly subscription fee. Ad campaigns are a recurring revenue stream that is far more profitable than subscriptions.