ITV Interview: Reggie Bradford, Founder and CEO, ViTrue

Reggie Bradford, the former president of Tandberg Television (note: Bradford joined the company following its $118 million acquisition last year of VOD infrastructure provider, N2 Broadband, of which he was president and CEO; prior to his stint at N2 Broadband, he served as chief marketing officer at WebMD), recently teamed with venture capital firm, General Catalyst Partners, to form a company called ViTrue, which he describes as "the world's first user-created advertising platform." The company, which has just closed $2.2 million in funding from Bradford (who is serving as its CEO) and General Catalyst Partners, has acquired Sharkle.com, a user-generated-content/video-sharing Web site which claims to have over 100,000 registered users, and over a million unique visitors and over 15 million page views per month. ViTrue hopes to tap into the user-generated-video phenomenon, in order to allow major brands to leverage their customer base to develop more relevant and engaging advertisements that it claims will "cost a fraction" of the expense typically involved in creating traditional 15- and 30-second spots.

Bradford recently spoke to [itvt]'s Tracy Swedlow about how he came up with the idea for the new company, about the tools the company plans to offer to advertisers, about the company's relationship with traditional advertising agencies, and more.

[itvt]: How is ViTrue funded?

Bradford: It's funded by myself, and by General Catalyst, a pretty prominent venture capital firm out of Boston. They also funded Brightcove and m-Qube. This is the first company that I've founded. I said to myself, "Okay. I've been a CEO and I've been a member of a founding management team, but I've never founded a company myself." So I decided to try it.

[itvt]: How did the idea for the company come about?

Bradford: I guess it was about nine months ago or so. I was still at Tandberg and things were going great. But I just couldn't help wondering what the next big trend would be--particularly in the context of my own background. My immediate background, as you know, is in video infrastructure. Before that, when I was at Web MD, I was involved in the consumer-facing Internet. And before that, when I was at the Miller Brewing Company, I was involved in brand management--really, packaged goods advertising. So I started wondering how I could I take advantage of those three different types of experience I had in my background, and also how I could--hopefully--capitalize on the next big trend in the Internet. When I was at Tandberg and N2 Broadband, I had really missed working in the Internet space.

Three things struck me as very interesting. One was the explosive growth of video on the Internet--which had been made possible by the cost of bandwidth coming down and encoding getting so much better, so that the quality is going up. I was very interested in what companies like Brightcove are doing, and in all these broadband video initiatives that the big networks--and pretty much every other media company—have been undertaking. The second thing I found very interesting was the growth of social networks on the Internet--sites like MySpace, where people are looking to find communities of like-minded people, and engage with them. The third thing I was interested in was advertising--my interest had been reawakened by sitting on a lot of panels and listening to experts talk about it. But it seemed to me that I was hearing a lot more about the way ads are distributed--for example, the shift from television and print to the Internet--than about what's actually inside the ad itself: i.e. the creative.

So I decided to start a company that would take advantage of the fact that consumers are already creating video, and that would attempt to channel that, so that consumers could create ads for brands that they are passionate about.

My idea was that the company would work in a similar way to the way we introduced standards to the cable industry for VOD: it would work with the brands and the agencies, and come up with common ways that those agencies and brands could get their consumers involved in their campaigns, so that those consumers could turn around and create ads and upload them--initially for distribution on the Internet, but ultimately for distribution on television, too.

[itvt]: Now, from what I can tell, your business isn't based on a central patentable technology of some kind. So how do you protect your idea? Couldn't any of the video-sharing companies out there start to offer similar services?

Bradford: I think that's a good question. My perspective on it is that when you build a company around trying to take advantage of the Internet and open standards, there are no real technical barriers. It's all about the brand, the relationships, the trust, and the credibility that you establish. And whether you can deliver a value proposition to your customers that's better than somebody else's.

That's what I'm betting on. Of course, we will develop tools and a platform--and, hopefully, people will get used to it and will like it, and will want to come back and do more campaigns. And we believe we can get value through building a big network that everybody benefits from--a la eBay or something like that. But, that said, there's no real proprietary secret sauce here.

[itvt]: So you're not worried by the possibility that, say, Google could set up a whole category for ads that are created by users? Or YouTube could, or any of these other video-hosting services?

Bradford: I suppose they could. However, I think it's all going to be about how we build an audience, and how we establish ourselves with the brands that we partner with, and how we get those brands to interact with their target audience. It certainly wouldn't surprise me if Google got into this kind of business, or Yahoo, too, for that matter. But I'm not overly worried about that. The Internet is built upon a series of partnerships, and I see us leveraging that capability. We're not trying to be all things to all people.

[itvt]: You mentioned earlier that your service is going to provide various tools…

Bradford: Yes. We'll have tools for the brands--for the advertisers. Among other things, these will essentially allow them to create playlists of the audio options that they have available for an ad, and of the video options that they have license to. Then, consumers could download those, and mix their own versions. That's more of a fill-in-the-blanks-type model. It would be for a brand that wanted to allow consumers some participation but that would want to maintain a large measure of control.

We also have review-and-approve modules for companies that don't want to have a free-for-all where every ad gets uploaded. We used that module for a campaign we just did with Sony for a movie called "The Benchwarmers." The campaign allowed people to upload videos of geeks overcoming bullies. Sony decided they wanted to make sure that they had the ability to approve what got submitted, and I think probably 25% of the videos didn't get approved, because they were racy, or whatever.

Then I think you're going to see other brands--particularly brands targeted at very young consumers, 14 to 24-year-olds--that are going to say, "Hey. We're going to let everybody participate in our campaign and upload whatever they want." However, I don't think that approach is suitable for every single brand. But, while we believe that most brands are going to want to maintain a fair amount of control over the process of allowing consumers to create ads for them, if a brand decided to, it could have a lot less control.

[itvt]: Are you going to offer tools on your Web site that will allow consumers to edit video and audio content provided to them by a brand?

Bradford: No. Not yet, at least.

[itvt]: But that's a direction you want to go in?

Bradford: We're definitely looking at various ways that would make it even simpler for consumers--or producers, as we call them--to create ads. We're very open to increasing our capabilities via acquisition or partnership: we acquired Sharkle because of the number of users on the site already producing video and ads, as well as because of the sheer number of eyeballs the site attracts. From a toolset perspective, we're going to be looking for other companies that are out there. If there's a company that's already developed a product that fits our model, we'll certainly want to take a look at them, potentially from an acquisition perspective.

[itvt]: Do you envision a company such as ViTrue as replacing advertising agencies?

Bradford: I think if you just look at the creative process at the ad agencies, it hasn't changed in 50 years. The agencies would be the first to admit that. So, from a technology perspective, I think there's clearly a disruptive opportunity. But I want to make sure that we work closely with the agencies. We're not trying to replace them. They've got all kinds of capabilities both online and offline. We just want to try to give them some tools, so that they can be more innovative for their clients, and better serve those clients' needs.

[itvt]: Are you in discussions with any agencies?

Bradford: Oh yes. We've talked to several. What we've found is that the ones that are more progressive are extremely excited. The ones that are more traditional are definitely concerned and cautious.

I think what you'll see happening is that we will have a few agency partners that help to really drive this into the market, and--most importantly--help us develop the requirements for the toolsets, and additional features that we can add to make what we're doing more simple and easy and convenient and scaleable.

[itvt]: Presumably contests would be a very effective way of getting consumers to generate ads?

Bradford: Absolutely. There's a packaged goods company that we're working with that we'll be announcing here shortly that's going to use their traditional media assets, such as radio, to draw people to the Web site. They're also going to use their in-store displays of their product to get people to the site. And then they're going to create a sweepstakes and offer prizes for the best video depicting their brand--which they'll then use in an advertising campaign.

[itvt]: In general, what factors do you think will motivate consumers to participate in creating ads for a brand?

Bradford: I think there are three factors. The first could be summarized as: "We make you famous." You can upload your video and have a chance to be recognized for your talent. This might motivate someone who works at a small shop, or who works at a large agency, but in the boiler room, or who's in college studying art. I think that, at first, the producers will be younger--say aged 18 to 34--though there's no reason that those age parameters couldn't expand. The second factor is what you already mentioned: prizes, sweepstakes, and those kinds of monetary incentives. The third would be, if you have a successful series of ads and they get distributed either through word of mouth or through more formal methods, then we would envision a model down the road in which producers would be able to make money on a pay-per-click basis.

[itvt]: Do you see the ads your end-users produce being distributed primarily via the Internet or TV, or both?

Bradford: I think in the beginning the focus of the ads will be on the Web, but I think that, very quickly, you will see a migration onto TV. I also wouldn't discount elements of campaigns hitting other forms of media--such as in-store, print, radio, etc.--in order to maximize impact. You know, for 10 years we have heard the term "convergence" being used to describe taking TV assets and throwing them onto the Web. Why not turn the model upside down and take great Web content and deliver it across TV?

[itvt]: When are you planning to roll out a commercially ready version of your service?

Bradford: Well, as I mentioned, we already did a campaign for Sony for their "Benchwarmers" movie. This is our white label product if you will, and more campaigns of this type are launching soon. However, the tools that we'll be offering to brands and that I mentioned earlier, we'll be launching those within the next couple months.

[itvt]: Do you have any plans to provide a tracking environment, so that advertisers, or individuals who uploaded an ad, could see how many views their ad is garnering?

Bradford: Yes. We've got some basic tracking today, but we envision ourselves having much more robust tracking for the advertiser, as well as for the producer. We'd most likely achieve that through a partnership with a company that specializes in providing those kinds of services.

[itvt]: Do you envision partnering with companies that specialize in the publishing and delivery of broadband video, such as Brightcove and Maven?

Bradford: Yes. Both of those are actually backed by General Catalyst, so I'm sure we'll be talking to them.

[itvt]: What will you be working on in the coming months to move this company forward?

Bradford: We'll be building up our toolsets and focusing on proof-of- concept. We're working with several prominent brands, and we want to make sure we deliver the concept. Then I think we'll be well on our way. We have a real focus on seamless execution for our partners--their success will equal our success.

URL: http://www.vitrue.com

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