One of the more interesting companies to receive funding lately was Shakr Media, a Seoul-based start-up who recently raised $3 million to further develop their video creative solution. Shakr have simplified the workflow for creating video ads, so pretty much anyone can create a professional looking video ad for their business — often for as little as $50.
VAN spoke to Erik Cornelius, VP of Marketing for Shakr, who explained how the product works, who is likely to be using it and how it could help open up video advertising to local advertisers. You can catch David Lee, CEO of Shakr Media, who will be speaking on the local TV advertising panel at New TV Frontiers in London on June 10th.
Could you provide a little background on Shakr’s product and how the company got to where it is today?
Shakr launched about a year ago, with the vision of reimagining everything to video. Back then we were creating personal videos for special occasions. People in Korea were already paying huge sums to make videos for weddings, birthdays and other special occasions. We knew that we could do better, for cheaper.
Our model was to work with third-party designers who created video styles for our platform, and then shared in our profits. One of our designers came to us with some advertising templates and suddenly we saw that there were much broader applications for our technology, and our business model. We discussed the idea with some contacts in the online advertising industry and they agreed – the potential was enormous.
We decided to focus specifically on video advertising for small businesses and local companies. This wasn’t being addressed in a serious way by any other companies, and we had an advantage in that the motion graphics designers we worked with had day jobs creating video ads for huge brands. The video styles they delivered to us looked like TV ads, not like cheap slideshows.
Going back a bit further, Shakr was founded by David Lee, who was born in Canada, but always had a strong affinity for his Korean roots. David started his first successful company when he was 14, and the company was acquired in 1998.
For Shakr, we’ve assembled a multi-national team in Seoul, which is possibly the best place to have a tech startup right now. David is Canadian-Korean, Dave Jansen, our VP of Product is from the Netherlands, I was born in Texas and our Creative Director, Eunseon, is Korean.
The rest of our stellar 14-person team is also from Korea.
Who do you see as a typically user of your product? Should creative agencies be worried?
Small businesses and the agencies that serve them are our primary customers. In the past, up-front production costs, which can easily run into the thousands of dollars, kept small and local businesses out of video advertising. Existing automated solutions created results so generic that business owners wouldn’t be eager to show the results to their friends, let alone pay to place them online. With Shakr, business owners, agencies or marketers can create a professional-quality video ad in less than half-an-hour for $50 to $100, on average. Our mission, now, is to democratize video advertising so that everyone can participate.
There’s no need for creative agencies to worry. At least not yet. They weren’t serving the small business market before and we’re not trying to challenge them when it comes to working with huge multi-national brands. In fact, our reception from media buyers and ad networks has been overwhelmingly positive. They want ad dollars from small businesses, and buying video ad units doesn’t actually cost that much. If we break down the main barrier to entry – high up-front production costs – everyone benefits.
There are very few small/local advertisers currently advertising using video. What do you think needs to happen in order for that market to evolve?
I think that Shakr has already taken the first step by making high-quality video ads affordable. The next step is education of the salespeople at ad networks and the local business owners or marketers. A few weeks ago I spoke to a customer service rep at one of the big ad networks to get an idea of what they’re saying about video advertising to local businesses.
He told me that video ads are mostly for big businesses that are trying to raise overall brand awareness.
That’s simply not the case anymore. With precise geographic, demographic and behavioral targeting – not to mention remarketing – small businesses can buy just the impressions that they need to raise local brand awareness or support a very specific call to action.
Given your current pricing model, it seems like you’ll need quite a bit of scale. Do you plan to whitelabel the product?
We’re seeing substantial customer growth on our own platform, but we also want to work directly with ad networks to help them increase the utilization rate of their increasing video advertising inventory. In other words, yes. We’re currently enhancing our API so that self-serve clients on a number of ad networks will be able to seamlessly interact with Shakr’s video creator.That may or may not be a pure white-label solution, depending on the level of commitment from each individual ad network.
Many tech solutions find themselves drawn into the media trading side of the industry to make additional revenue.
Do you have any plans to go beyond creative solutions at this point in time?
I won’t rule anything out in the future, but our current plan is to work with the existing ad networks and media buyers. We’re very good at the creative side and want to operate where we can add the most value.