The risqué Snapchat ac­count Arsenictv is spawn­ing a gen­er­a­tion of in­flu­encers

Bloomberg Businessweek (North America) - - Contents -

On a Wed­nes­day morn­ing in April, Caitlin O’con­nor, a 26-year-old ac­tress, drove her­self to a man­sion in the Cold­wa­ter Canyon neigh­bor­hood of Los An­ge­les and took off most of her clothes. She spent the next few hours wear­ing a black bikini and sit­ting in a hot tub, speak­ing into a cell phone cam­era to an au­di­ence of sev­eral hun­dred thou­sand fol­low­ers, mostly young men and teen boys. A viewer asked if she only dated guys with money. “I love girls who make their own money and don’t rely on men,” she replied. The shoot was for Woman Crush Wed­nes­day, part of the reg­u­lar pro­gram­ming on Arsenictv, an un­der­ground broad­caster that’s the Next Big Thing in me­dia.

You prob­a­bly haven’t heard of Ar­senic, which airs only on the Snapchat app. Other pro­gram­ming in­cludes the Q&A 5 Snap Facts and Ar­senic Flex, a work­out seg­ment. And even if you have, you may want to keep it to your­self. The con­tent isn’t porno­graphic by Supreme Court stan­dards, but as the name im­plies, Ar­senic’s videos can feel a bit dan­ger­ous: Think of an Amer­i­can Ap­parel ad with many, many more thong shots filmed from what would be hard to call a re­spect­ful dis­tance. De­spite Ar­senic hav­ing no spe­cial place­ment on Snapchat—it’s merely an ac­count, not one of the chan­nels man­aged by Vice Me­dia, Na­tional Ge­o­graphic, or Peo­ple, for in­stance— its videos at­tract more than half a mil­lion views each in a 24-hour pe­riod. In March, Ar­senic re­buffed a buy­out of­fer from Play­boy En­ter­prises. “We re­ally like what they’re do­ing,” says Play­boy Chief Ex­ec­u­tive Of­fi­cer Scott Flan­ders. In­stead of cash­ing out, Ar­senic has raised money from tech in­vestors. “Snapchat is the fu­ture of TV,” says Paige Craig, man­ag­ing part­ner of Arena Ven­tures, who’s also backed Lyft. “And Ar­senic is the com­pany that is most adept at us­ing it.”

Call­ing Ar­senic a com­pany is a bit gen­er­ous. Al­though Craig was im­pressed by Ar­senic’s au­di­ence num­bers and mes­sage of em­pow­er­ment—a woman, Amanda Mi­callef, co-founded the com­pany; mod­els pro­duce their own shoots; and there’s more body-type di­ver­sity than you’d find in a lad mag—he says, “It was the long­est due dili­gence process I’ve ever done.” Which makes sense: Ar­senic is run out of the kitchen of CEO Billy Hawkins, 41, a Har­vard Law School grad­u­ate and for­mer Cre­ative Artists Agency agent who pre­vi­ously rep­re­sented Spike Lee. Mi­callef, 39, a for­mer movie pro­ducer, casts each shoot, and five in­terns help with the cell phone cam­er­a­work. (Mod­els con­trol Ar­senic’s Snapchat ac­count dur­ing their shoots, edit­ing and post­ing pho­tos. “It’s driven by the model’s vi­sion,” Mi­callef says. “They’re the boss of who they are and how they look.”) The only full-time em­ployee man­ages the flow of port­fo­lios that mod­els sub­mit—about 1,000 a day—for con­sid­er­a­tion. Given the en­thu­si­asm, you’d ex­pect Ar­senic to pay big bucks. But O’con­nor doesn’t make a cent in that hot tub: She ap­pears once a week in ex­change for the right to em­bed her so­cial me­dia han­dles on the videos she records. “Girls want to do Ar­senic be­cause they’re get­ting fol­low­ers,” she says. “That’s the eq­uity. In the long run, it means dol­lars.”

This math is be­com­ing more and more com­mon­place in a me­dia in­dus­try in the throes of dis­rup­tion. O’con­nor, who makes money hawk­ing prod­ucts on In­sta­gram, rep­re­sents a new kind of celebrity—and Ar­senic a new kind of celebrity ve­hi­cle— and they’re work­ing to­gether to at­tract the young au­di­ences con­ven­tional me­dia doesn’t. The shift­ing ap­petites of a group that ad­ver­tis­ers widely re­gard as the most valu­able —young peo­ple have a life­time of con­sump­tion ahead of them but haven’t al­ways formed strong opin­ions about brands—have cre­ated an open­ing for “in­flu­encers.” They’re a cu­ri­ous group of for­mer child stars (e.g., Hi­lary Duff), lesser Kar­dashi­ans, and ob­scure up- and- com­ers like O’con­nor who carve out ca­reers as so­cial me­dia sales­peo­ple. If you’ve ever won­dered why In­sta­gram and Twit­ter feeds are full of at­trac­tive peo­ple talk­ing about detox teas, diet shakes, and new apps, it’s be­cause they’re paid to. They’re part of an ad­ver­tis­ing ecosys­tem that’s rev­o­lu­tion­iz­ing mar­ket­ing, how­ever con­fus­ing its dy­nam­ics seem to older gen­er­a­tions ac­cus­tomed to fa­mous spokes­peo­ple on TV, usu­ally not in a hot tub.

The Caitlin O’con­nors of the in­ter­net are a vi­tal part of this e econ­omy. Even though she’s a pro­fes­sional ac­tor with a Screen Ac­tors Guild card and has an IMDB page full of cred­its, O’con­nor’s break­out role is as an on­line mar­keter. “So­cial Ar­senic founders Mi­callef (left) and Hawkins

me­dia has 100 per­cent made my ca­reer,” says O’con­nor, who moved to Los An­ge­les from Union­town, Pa., 10 years ago. She has al­most 300,000 In­sta­gram fol­low­ers, up from about 100,000 when she first ap­peared on Ar­senic’s Snapchat. Be­cause of that fol­low­ing, small brands pay her $300 per post to pro­mote their wares. Re­cently, she’s talked up Eme­di­as­tar, an app de­vel­oper; Flocku, a col­lege-fo­cused me­dia com­pany; and Recor, a nutri­tion sup­ple­ment. (This typ­i­cal post has re­ceived 5,812 likes and count­ing: “Fol­low @recor­na­tion … They have the best whey pro­tein and pre work­outs I’ve tried!!”) In a nor­mal month, O’con­nor grosses $6,000 to $10,000. “If you don’t see a line in my post that says, ‘No­body paid me for this,’ then I’ve prob­a­bly been paid for it.”

She main­tains ac­counts on Face­book, Twit­ter, and Snapchat, but she makes most of her money on In­sta­gram. In­sta­gram is big with brands be­cause it’s pop­u­lar, with more than 400 mil­lion monthly users, and not es­pe­cially keen on pri­vacy. The app pro­vides an ap­pli­ca­tion pro­gram in­ter­face that al­lows O’con­nor’s spon­sors to see how many fol­low­ers she has, how many likes each post re­ceives, and what peo­ple say about them. She also talks up spon­sors on Snapchat, but for now, the so­cial net­work’s struc­ture—mes­sages dis­ap­pear af­ter 24 hours, and there’s no way for a brand to ver­ify how pop­u­lar in­flu­encers are—pre­vents it from be­ing a ma­jor source of in­come for her. Spon­sor­ships for top play­ers are com­mon on video game plat­form Twitch and on Mu­si­, a make-your-own mu­sic video app, where the top user, a 15-year-old who goes by Baby Ariel, has 9 mil­lion fol­low­ers and has cre­ated ads for Nord­strom and 21st Cen­tury Fox.

There are maybe 100,000 peo­ple like O’con­nor, says Daniel Saynt, CEO of So­ci­a­lyte, an agency spe­cial­iz­ing in cast­ing in­flu­encers for ad cam­paigns. Rates vary widely: Some­one with 100,000 fol­low­ers might get $100 per post, while an in­ter­net-fa­mous celebrity such as co­me­dian Josh Ostro­vsky, aka the Fat Jew, can eas­ily pull in more than $5,000. Saynt, a for­mer fash­ion blog­ger who later be­came chief mar­ket­ing of­fi­cer for Re­becca Minkoff, re­cently ne­go­ti­ated what he terms “six-fig­ure” ad cam­paigns for Adam Gal­lagher, a men’s fash­ion stylist and model, and Marianna He­witt, a beauty guru. Be­cause cam­paigns that fea­ture mega-in­flu­encers such as Kylie Jen­ner can reach into the mil­lions, many tal­ent agen­cies, in­clud­ing United Tal­ent Agency and One Man­age­ment, now have in­flu­encer divi­sions.

Rep­re­sen­ta­tion agree­ments, how­ever, are the ex­cep­tion in this world. O’con­nor has a man­ager, but she makes most deals her­self, con­tact­ing brands di­rectly or go­ing through apps such as Pop­u­lar Pays or Brand­snob, on­line mar­ket­places where ad­ver­tis­ers post gigs. “What Airbnb did for hos­pi­tal­ity, we’re try­ing to do for ad­ver­tis­ing,” says Pop­u­lar Pays founder Cor­bett Drum­mey. Re­cently, Pop­u­lar Pays listed spon­sor­ship op­por­tu­ni­ties for Macy’s and Core Or­ganic, a low-cal soft drink whose name seems work­shopped for mil­len­ni­als.

For now, many brands are sit­ting on the side­lines, wary that these pro­fes­sional in­flu­encers aren’t all that in­flu­en­tial. “Unilever, Proc­ter—they’re not there yet. That’s go­ing to take two or three years,” says Gary Vayn­er­chuk, CEO of Vayn­erme­dia, a new-me­dia mar­ket­ing agency that counts Pep­sico and An­heuserBusch Inbev as clients. “Right now, you’ve got en­tre­pre­neur­ial peo­ple reach­ing out to these in­di­vid­u­als on In­sta­gram and pay­ing through Paypal. It’s rugged.” Or brands are wary about fraud, which is ram­pant. In­sta­gram fol­low­ers can be pur­chased from dozens of shady ser­vices that, for about $50, will pop­u­late your feed with bots, dol­ing out fake likes and generic com­ments (“Beau­ti­ful!!!”). Saynt, of So­ci­a­lyte, says he vets prospec­tive spokes­peo­ple be­fore hir­ing them. “If some­body has 100,000 fol­low­ers but they’re only get­ting 1,000 likes per post, we as­sume 50 per­cent of their au­di­ence is in­au­then­tic,” he says. Ad­ver­tis­ers also strug­gle to walk the line be­tween mar­ket­ing and ma­nip­u­la­tion. Some in­flu­encers la­bel spon­sored con­tent with “#spon­sored” or “#ad,” but those hash­tags are of­ten buried at the end of a post, and many peo­ple don’t bother marking spon­sored posts at all. O’con­nor doesn’t, she says—fol­low­ers un­der­stand that most of her posts are paid.

Ar­senic, for its part, has yet to make deals with mar­keters. It’s “pre-rev­enue,” CEO Hawkins says, us­ing a tech catch­phrase that es­sen­tially means, We’re fig­ur­ing it out. Even­tu­ally, the plan is to work with ad­ver­tis­ers and share pro­ceeds with mod­els. But Ar­senic’s am­bi­tions go be­yond babes in biki­nis: In April it launched Arseni­cau­dio, a mu­sic-fo­cused Snapchat ac­count fea­tur­ing in­ter­views with DJS that at­tract more than 50,000 daily view­ers. “We want to be MTV in its glory days,” Hawkins says.

O’con­nor says she hopes to use her sta­tus to fol­low the path of other so­cial me­dia stars such as An­drew Bach­e­lor, known on the video-shar­ing app Vine as the co­me­dian King Bach, and Colleen Evans, of Youtube’s Mi­randa Sings, who used their perches to win big­ger roles on TV. “My goal is the main­stream,” O’con­nor says. “I’d love to have a net­work com­edy. I don’t feel like I’ve made it.” Some dig­i­tal mar­keters ar­gue that she’s got it back­ward. “The real celebri­ties are [the in­flu­encers],” Vayn­er­chuk says. “I’d much rather have a hit show on Snapchat than on NBC or ABC.” <BW>

… be­cause the more peo­ple who fol­low her and like her posts … … the more valu­able her en­dorse­ments are. In­flu­ence = $$$ O’con­nor’s Snapchat videos for Arsenictv—here she in­ter­views the mu­si­cian Di­plo—get more than 500,000 views each. But the real goal...

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