| Scott Tilton, the CEO of Loop'd Network is very | | | | commercialised process like sponsorship. |
| much into action sports. And he has found a way to | | | | Adrian: How does the social networking fit into this |
| combine social media with sponsorships within the | | | | then? |
| action sports world. Its a pretty interesting model, | | | | Scott: In addition to trying to get sponsored, the |
| the best way of monetizing social networking sites | | | | members of the site are also out aggregating |
| I've ever heard of. He gets ECPM's in the multiple $$ | | | | networks of friends and fans. For them, the more |
| ranges, compared to the miserable ECPM's of other | | | | people they have in their network, the more valuable |
| social networking sites. Loop'd Network get users of | | | | they are to a sponsor. That way when a brand |
| the site to compete to become sponsored by | | | | sponsors a particular member, they now get visibility |
| brands. Its a great offer for the brands since they | | | | to all of their friends. It's a very creative grassroots |
| get some of the very best candidates available. (note | | | | marketing program where the athletes' online identity |
| that Loop'd Network is completely different to | | | | is sometimes as valuable, if not more, than their |
| Loopt, the iphone gps application) | | | | offline identity. |
| Since he's taken the venture funding route, Scott | | | | Adrian: If someone signs up, how are they |
| asked me to mention that Loop'd is currently | | | | promoting? What types of different tools do you let |
| profitable but are looking to grow the company even | | | | your guys use? |
| more quickly and is looking for investors. | | | | Scott: During the signup process, you have an option |
| And if you're looking for ideas for monetizing social | | | | to import your address book and see who's already |
| networking type traffic, Scott's interview is a good | | | | on the network. You can invite people that are off |
| one to check out for a fresh approach. | | | | the network. You can also do the traditional |
| Adrian: We're here with Scott Tilton, CEO of the | | | | invite-a-friend. |
| Loop'd Network. Scott, thanks for joining us.Can you | | | | Where we get more viral is on the sharing and |
| tell us a little bit about who you are and where | | | | inviting. Let's say I'm a member with 500 friends in |
| you've come from? | | | | the network and 500 people I can communicate with |
| Scott: I was born and raised in New York. I am a | | | | off the network. I can post an update to my profile |
| former competitive action sport athlete. At the age | | | | that says how I placed at a specific event. When I |
| of six, I started racing BMX bicycles. When I was 10, | | | | send the update, it will immediately notify all of my |
| I transitioned into motocross, which I did for about | | | | friends on the network as well as send an e-mail to |
| ten years. | | | | all the people off the network. Then they have a link |
| I got my Masters Degree in Internet Business | | | | to visit my profile to see the update. They're basically |
| Systems and had one job out of school. It was | | | | promoting themselves, which is helping to pull more |
| pretty miserable, so I tried to find opportunities to | | | | people back into the network. |
| work in the action sports space and combine it with | | | | We also have a partnership with a company called |
| the Internet. Nothing really popped out at the time, | | | | MixerCast. Their technology is a mash-up type tool |
| so I founded a company called SponsorHouse. | | | | where the user can pull in Flickr photos, YouTube |
| In 2003 I moved to San Diego, in a motor home, | | | | videos, UGC content, and music. Then you can |
| with SponsorHouse and my business partner. We | | | | create a mash-up, which is just mashing all this stuff |
| didn't know anyone when we showed up, so we | | | | together or essentially a timeline video editor. |
| started pushing to grow the company. That year we | | | | For us, the application was perfect because now we |
| won a business plan competition, which led to our | | | | offer a solution for a 14-year-old skateboarder to |
| first angel-round funding. | | | | upload all his content of him doing tricks, put it |
| SponsorHouse was around for about five years and | | | | together through the timeline editor, add music to it, |
| was the prequel to Loop'd Network. We essentially | | | | and post it to his Loop'd profile. Then he can also |
| used the same technology, the same investors, the | | | | share it and post it to his MySpace profile, his |
| same team, and rebranded under the Loop'd | | | | Facebook profile, or his Bebo. Anyone that wants to |
| Network to expand the business model. | | | | interact with that particular video or create their own |
| Loop'd Network is an online action sports network | | | | has to come back to our network. |
| where athletes and enthusiasts can register for a | | | | Overall, we don't invest in marketing. We do some |
| profile, interact with others, and attempt to get | | | | PR with our partners, but we don't invest much in |
| sponsored from about 400 brands who are on the | | | | paid search at all. We don't buy traffic or do print or |
| network. We charge advertising and e-commerce | | | | event marketing. For the most part, everything is |
| fees to sports equipment companies and mainstream | | | | organic and word-of-mouth, and we get anywhere |
| advertisers who are focused on reaching our | | | | from 1,000 users and up a day to register. |
| demographic of primarily young males, mostly in the | | | | Adrian: Why don't you do something like Ning and be |
| 12 to 24 year-old age bracket, which is the sweet | | | | the network for connecting brands to communities? |
| spot for action sports. | | | | Scott: Our network does have elements of Ning. For |
| Adrian: Why change the name to Loop'd? | | | | example, if you go to monsterarmy.com, it is the |
| Scott: When we first started as SponsorHouse, we | | | | grassroots athlete online community on the Loop'd |
| were a sponsorship service. Over the years, we | | | | Network for the energy drink Monster Energy. We |
| found that we were starting to lose some | | | | went to them two years ago to present the |
| opportunities to work with some key brands and | | | | opportunity to build a branded community around the |
| athletes. | | | | Monster Energy brand and position it as a grassroots |
| Oakley is an example of a company that was | | | | community for athletes to connect with the brand. |
| hesitant to work with us as SponsorHouse. We had a | | | | That community works almost identical to Ning |
| great relationship with them and knew we were | | | | where we offer a set of tools to brands to be able |
| going to work together at some point. It was | | | | to build communities on our network. |
| understood that while we were SponsorHouse, they | | | | Adrian: Why don't you take that to support any |
| didn't want to put the message out that they were | | | | potential vertical and allow all brands to come in? |
| sponsoring athletes. As soon as we launched Loop'd, | | | | Scott: We've considered it. From a resource |
| we did a one-year deal with them, and we launched | | | | perspective, we're privately and angel-funded so |
| the Oakley Rider Search program. They actually | | | | we've been focused on making sure we went to |
| renewed the deal after that first year. It was implied | | | | action sports as a vertical first. We have actually |
| sponsorship, but the word "sponsorship" never | | | | been approached by several people. We're now |
| showed up anywhere. | | | | actually pursuing licensing opportunities to have |
| When it comes to sports marketing, brands are very | | | | different business teams that are interested in |
| specific and particular about how they get involved | | | | pursuing other verticals, and we'll do more of a |
| with things. On the action sports front, it's a little bit | | | | joint-venture/licensing arrangement with those types |
| trickier because you're taking a risk. If the athlete | | | | of companies. |
| turns out to be a punk or is a bad image for the | | | | Adrian: Let's say you have 500 friends, and Monster |
| company, it taints things for the company and the | | | | Energy is sponsoring you. How is that sponsorship |
| brand. It's the same way with sponsorship; | | | | done so it's not turning off those friends? |
| companies just keep a really tight wrap on who they | | | | Scott: Immediately upon entering into an agreement |
| will associate their brand with in order to protect the | | | | with a company, such as Monster Energy, the logo |
| identity of the company. | | | | shows on their profile. Monster now has visibility and |
| Adrian: Outside of the sponsorship side, what do | | | | real estate on their profile as a sponsor. |
| users actually do with Loop'd? | | | | It's then tied to everything the member does, so |
| Scott: Our members can register on the site, receive | | | | there's always an insignia that specifies who the |
| a profile and have access to different features such | | | | brands are that are sponsoring them. Immediately the |
| as sponsorship, photos and video applications. We | | | | member can also share with the rest of his friends |
| have 400 brands on the network, and we immerse | | | | and networks that he has just been sponsored by |
| those brands into the experience. With sports, brands | | | | Monster. Also every member has an activity feed, |
| are just part of the lifestyle. People in action sports | | | | and they can see what is happening with the rest of |
| really identify themselves based on the brands: the | | | | their friends on the network. That sponsorship will |
| clothes they wear and the equipment they use, so | | | | show on their activity feed for everyone else in the |
| they don't view them as advertisers but as active | | | | network to see. |
| participants in the sport. | | | | Adrian: How much does a typical sponsorship |
| The members on the site are looking for sponsors. | | | | agreement go for? |
| They're uploading massive amounts of content, | | | | Scott: It really depends on who you are. Typically, |
| mixing it up, mashing it up and redistributing it to | | | | the levels start from discounts off retail pricing on |
| other social networking profiles. They're getting deals | | | | the equipment that you need, which ultimately saves |
| on products and entering contests from the brands | | | | a lot of money. That's where most of the amateur |
| to try and get sponsored and win products and | | | | athletes fall. Once you start getting into the very |
| incentives. Then they're using it as a more traditional | | | | talented, up-and-coming amateur athletes who are on |
| social network to connect and interact with other | | | | the verge of turning pro, they start getting free |
| members who are into similar sports. | | | | products. Then once you turn pro, a lot of those |
| We have a lot of hopefuls on the network who are | | | | athletes are on straight pay. It's not a rich man's |
| trying to figure out how to promote themselves, | | | | sport. Whether it's surfing, motocross or |
| how to get a foot in the door with the different | | | | skateboarding, as a pro you can start out making |
| companies for sponsorship and using it as a | | | | anywhere from $10,000 up to $10 million depending |
| self-promotion tool to break into the action sports | | | | on who you are. |
| scene. | | | | Adrian: Is the $10 million deal done through your site |
| Adrian: Is that a model that could then be replicated | | | | or do they do that directly? |
| across other verticals where you have a community | | | | Scott: They do those deals directly. The pro athletes |
| of people that want to move up, such as actors, | | | | who have agents and managers use our network |
| writers or people like that? | | | | strictly as a way to build fan bases and to promote |
| Scott: Absolutely. We've chosen to focus on sports | | | | their sponsors. They're not doing deals on our |
| because it's really what we know and have been | | | | network. We never wanted to be in the middle of |
| most passionate about. We have been approached | | | | the sponsorship deal or in competition with the |
| by a number of people about everything from music | | | | agents or the managers of these professional |
| to horseracing, rodeo and actors. The biggest | | | | athletes. We're just the network where people can |
| categories that come to us on a regular basis and | | | | connect with each other. |
| ask if they can use it are musicians, bands, and | | | | Adrian: Given that you've got a monetisation model |
| gamers. | | | | here, how well is it working? |
| Adrian: Did you originate your concept or did it come | | | | Scott: We've actually monetised extremely well. Our |
| from somewhere else? | | | | site is free for members now. For a brand to get |
| Scott: We were definitely pioneers with the | | | | onto our network and be able to interact with our |
| sponsorship model. Prior to SponsorHouse, there | | | | members, they have to buy a profile, buy a |
| really was no solution for up-and-coming and amateur | | | | community, buy display advertising, or set up a store |
| athletes to get sponsored. Back in 1999- 2000, the | | | | front or do e-commerce where we get an affiliate |
| traditional process was an amateur athlete would | | | | fee. |
| write a resume, post his competition results, and | | | | The profile is very similar to a MySpace or a |
| throw some photos into an envelope. If he was lucky | | | | Facebook profile except brands can use our |
| enough, he would put a video in there for sponsor | | | | sponsorships services, interact with members and |
| reps or team managers to look at. And he would mail | | | | have visibility to a very targeted demographic. |
| them to a company. | | | | The community is like a sponsored group, such as |
| Some of the more popular companies like Oakley and | | | | the Monster Army concept I mentioned. When you |
| Quiksilver would get tens of thousands of applications | | | | buy a community, you have a whole set of tools to |
| for sponsorship, and most of them would never get | | | | take over the look and feel of our pages and add |
| looked at because no one was designated to sift | | | | different modules whether it be a contest, a poll, |
| through all this information nor did they have the time | | | | featured members or featured athletes. |
| to do it. | | | | Then we have a traditional display advertising model, |
| When we launched SponsorHouse, it was a | | | | which has been our least area of focus. The brands |
| community site with profiles where team managers | | | | also have the ability to link up with their own stores |
| could specify the criteria of what types of athletes | | | | or create their own storefront on our network, and |
| they're looking for. For example, "I'm looking for a | | | | they can sell products with deals to our members. |
| 14-year old motocross racer from New York." If you | | | | Adrian: You actually have a couple of business models |
| fit that criteria, then you could contact that company. | | | | all rolled into one. Can you tell me page impressions? |
| It's a way for them to streamline the whole | | | | Scott: We view about 12 million to 15 million pages a |
| application process. We were the pioneer in | | | | month and we have 400,000 members right now, |
| developing that type of concept that really brought | | | | most of which are active. In terms of revenue per |
| the world of sponsorship to a much larger audience | | | | page, we're in the $20-plus CPM range for revenue |
| of athletes from all over the country at multiple levels | | | | per page which is unheard of when other social |
| beyond just professional. | | | | networks are in the pennies. |
| Adrian: Does a company typically say, "We need to | | | | Adrian: The nuances may be different as well |
| find a 14-year-old guy in New York City" and then | | | | because in other areas like in Facebook, advertisers |
| your system finds a 14-year-old skateboarder in New | | | | can be often viewed as unwanted intruders whereas |
| York City? | | | | in your area, everybody wants the sponsors. |
| Scott: Correct. It works one of two ways. They can | | | | Scott: Correct. We've layered the brands into the |
| create a sponsorship listing that would enable people | | | | experience where they're not positioned as |
| to contact them or they could do a search to pull all | | | | advertisers. They're positioned as other participants |
| the people that fit their criteria. They can browse | | | | on the network. We have a brand engagement |
| profiles, look at photos and videos, see how many | | | | metric where 85 percent of our 400,000 members |
| friends they have, what people are saying about | | | | have engaged with brands on our network. When |
| them, and what kind of ratings they have. They can | | | | they have sent sponsorship applications, they've |
| get a better gauge of who they're looking at and | | | | entered a contest, and they've become a friend of |
| what type of person they are based on who they're | | | | that brand, they interact with them and have a |
| friends with. At the end of the day, it's essentially | | | | relationship with that brand so the brand can now |
| marrying the effects of social networking with a | | | | talk to them on a regular basis. |