In this episode, Stacy sits down with Joe Gagliese, the co-founder and CEO of Viral Nation. The two discuss the difficulties of influencer marketing, and what lessons they have learned from their experience. Joe also gives his insight on which social media platforms are here to stay, and how brands can benefit from using them.

Ways To Connect:
Website:  viralnation.com
LinkedIn: joegagliese
Facebook: theviralnation
Twitter: viralnationinc
Instagram:  viralnation

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Transcripts:

Stacy Jones (00:01):
Welcome to Marketing Mistakes (And How To Avoid Them). I’m Stacy Jones, the founder of Influencer Marketing and branded content agency Hollywood Branded. This podcast provides brand marketers a learning platform for topics perse to share their insights and knowledge on topics which make a direct impact on your business today. While it is impossible to be well versed on every topic and strategy that can improve bottom line results, my goal is to help you avoid making costly mistakes of time, energy, or money, whether you are doing a DIY approach or hiring an expert to help. Let’s begin today’s discussion.

Speaker 2 (00:31):
Welcome to Marketing Mistakes (And How To Avoid Them). Here’s your host, Stacy Jones.

Stacy Jones (00:36):
Welcome to Marketing Mistakes (And How To Avoid Them). I’m Stacy Jones. I’m so happy to be here with you all today and I want to give a very warm welcome to our guest, the Co-founder and CEO of Viral Nation, Joe Gagliese. Joe and his business partner Matthew Macelli, founded Viral Nation in 2014 and have since then built one of the world’s most diverse influencer marketing networks, creating campaigns for the influencers they represent. Viral Nation has worked alongside some of the world’s biggest and most recognizable brands to unleash the power of online marketing and grow audiences of loyal advocates while discovering new fans, with such brands as Microsoft Crayola, Energizer Twitch, and match.com. Today we’re going to talk about how Joe has had so much success with his business and his tips for going viral.

Stacy Jones (01:19):
We’ll learn what has worked from Joe’s experience, what could be avoided, and how some brands are missing the mark with influencer marketing. Joe, welcome. Thank you so much for being here today.

Joe Gagliese (01:28):
Thank you for having me. I’m very excited.

Stacy Jones (01:30):
Of course. If we could start off, I’d love to have our listeners learn a little bit more about what got you to where you are today and how you founded this business and are skyrocketing to success.

Joe Gagliese (01:41):
I have no idea. It’s all luck and that’s it.

Stacy Jones (01:45):
Perfect.

Joe Gagliese (01:46):
It’s been a life changing, beautiful journey for myself, my family and obviously all the people who started here. Luck part is definitely an element and more luck in timing. Just really recognized this influencer space at the beginning, was very well connected in the athletes celebrity world and started to see athletes and celebrities monetizing their social and thought, if brands are willing to pay them, what about these young people on social media who are doing a hundred times their numbers on a daily… on an afternoon, right? So we started as a talent agency, believe it or not, signing influencers and being their agents. Like Brad Pitt would have an agent, same thing. And that was… Oh my God. Started doing that about six and a half, close to seven years ago.

Joe Gagliese (02:36):
And then slowly became known as the guys who had the largest agency in the influencer space. And what that attracted was all of these brands and marketing agencies who are looking for talent to fulfill their campaigns. Because at that time it was very hard to find them. Obviously now there’s lots of tools to source influencers and stuff like that. At the time there wasn’t. So we became the go-to guys for a number of agencies. So we were running, thousands of influencer campaigns for tons of different companies and we were really the puppeteers behind the first big wave of influencer. We took those learnings, developed a team, and went to market as a marketing agency. That was our big turning point.

Joe Gagliese (03:16):
So started bringing on major brands that we had worked with through other agencies. We started building a reputation. We are really, really well known. And that without boring you is how we got to this point. Now Viral Nation’s a full service modern media agency, which has been built in our obvious big landmark is influencer marketing. But now close to a hundred employees. We work in 26 different countries and we’ve been growing at about 100 to 300% a year since day one. So just an incredible journey, incredible growth, but more excitingly really paved the way in this influencer space.

Stacy Jones (03:55):
And so you all are now really much more than just a talent agency. You’re more than influencer database as well?

Joe Gagliese (04:04):
Yeah. Yeah, we still have the influencer talent agency just because that’s where we started. Believe it or not, the first influencer we signed runs our talent agency now, which is a really special thing. Our talent agency maybe makes up 3% of our global revenue. It’s not as big as we are, but it’s something we’ve kept and I think we represent just over 700 or 800 influencers in there, so it’s still substantial. But no, Viral Nation globally over the last four years is really known as a full service marketing firm, as opposed to just the influencer database or agency. Although we do have the talent agency, and although we do have a technology that we’ve built over the last two years that does analytics for influencers and searching and all that stuff. We have all those components, but our marketing agency is the big fish.

Stacy Jones (04:55):
And people who are coming to you want a turnkey program to be built for them?

Joe Gagliese (04:57):
It depends. I’d say yes most of the time. Viral Nation doesn’t have very much outbound sales. We get between 50 and a hundred brands a week, come in looking for different things. And it could be like you said, looking for a turnkey program. There’s others who are wondering how they expand a program. There’s others who have unfortunately had bad experiences in the space. We all know the influencer Wild West. Some of the things I hear is pretty crazy. But we work on a number of things, like ambassador programs for brands with hundreds and hundreds of influencers on them, affiliate campaigns, we run content campaigns, media campaigns with influencers like commercials that you’d see on TV. So there’s a number of different really cool avenues that they come in for, but mostly looking for influencer campaigns.

Stacy Jones (05:46):
Awesome. And so when the brands are coming to you, typically, what type of budget size do they need to have to even consider working with an agency like yours?

Joe Gagliese (05:54):
So that’s obviously changed over the years. I hate this question not because of the answer, but because of this business indicates what that level is. So when you start to build an organization, you have the amount of people we have, it gets very hard to service the small business, which is insane because I was that guy, I still own small businesses and et cetera. If there’s a big opportunity and something we think we can carry out and be really successful on for a small amount of money, we’ll do, just because we want to help them. But generally our minimum campaigns are around 50 to 100,000 US, for a campaign. I’d say our average deal flow is about a half a million to a million dollars. So that’s our average deal. But we also have Viral Nation launch, which is pretty cool. So if there’s a company who can’t afford to work with us, we’ll take an equity position and we’ll do the investment, like kind of shark-tanky and stuff. So we own three or four companies that way. But yes, we’re a little bit larger.

Stacy Jones (06:52):
And that makes sense. But it also is the fact that when you’re a smaller company and you don’t have necessarily a high budget, you can have this done internally. You can work with influencers. It is something that is doable. The fact that once it starts getting at scale and you’re working with a larger footprint, that you really need to start considering having a team work with you.

Joe Gagliese (07:14):
Well, you’ve been in marketing for a long time, obviously even longer than me. I think what concerns me with some of the startup companies and companies that don’t have big marketing budgets is, it’s very hard to have big impact with low dollars in the marketing space. So you’ve got to be almost stupid strategic. You need to deploy those funds in a way that’s reaching out to 10,000 influencers yourself with trade offs so you don’t have to pay them. And you got to go at it a very different way than the way we go at it, right. Consistency and influencer marketing is something people forget, right? So a lot of these small business owners that I advise or I speak to and stuff like that will go to an influencer, pay them $2,000 and they’re like, “Oh my God, I’m going to sell on e-com.” And they’re disappointed because they sold $100 and spent $2,000.

Joe Gagliese (08:02):
And part of that is because people don’t make those decisions on social that quickly. So you need the consistency, but you also don’t want to lock into a relationship with an influencer for a year. I’d say influencer marketing, doing it yourself is one of the harder things to do, but it can be unbelievably successful. It’s just hard.

Stacy Jones (08:21):
Yeah. And I think you touched on a point that’s so important to realize that, you’re doing an influencer marketing campaign much like people traditionally did print advertisement or television or radio. It’s about repetition. It’s about the fact that you have to get in front of people, and you have to get in front of the same people using different influencers who are reaching them and touching them. Even the same influenced are touching them over and over to build that trust, that authenticity, and making that conversation happen. It is not a direct sale that’s going to happen overnight in most cases.

Joe Gagliese (08:53):
Millennials aren’t stupid.

Stacy Jones (08:55):
No.

Joe Gagliese (08:55):
They know when they’re seeing an ad from an influencer, and I’m a guy who serves them. So, I [eve 00:09:01] to the fact that, influencer marketing has its quirks. But millennials are so smart that in order for them to buy in to what these influencers are doing in most occasions, unless we’re talking about certain app companies or things that have what I would call low resistance conversions, things that don’t take a lot for us to convert and then try it out, is that consistency, right? But also not overdoing it because there’s a threshold where you’ve maxed out that audience, right? So, you’re for sure right, it’s just finding that balance varies influencer to influencer.

Stacy Jones (09:32):
Yeah. So what are some of the latest trends you’re seeing an influencer marketing?

Joe Gagliese (09:38):
I’m getting hounded by the media on TikTok. I’ve done so many TikTok interviews this year so far. When I see them come through I’m like, “Oh my God, here we go again we’re TikTok.” Viral nation was the marketing company that launched Musically. I have a ton of extreme knowledge of their entire company, how they were built. We actually do the marketing for ByteDance now for TikTok. So, I have a deep understanding of what their roadmap is and what they’ve created and what they’re continuing to create. And I think for sure it’s a massive trend. I think it’s here to stay and I think the platform is going to be extremely important for business. And I also think, if there’s a small business person listening to this or a small agency, I think the opportunity there is like YouTube 10 years ago, is like Instagram five years ago, is like Facebook for years… I think there’s a big opportunity there to get those numbers. So I think that’s a big trend.

Joe Gagliese (10:35):
I think that another trend in influencer marketing that not a lot of people see is the actual influencer marketing, psychological ripple effect that’s happened. People look at influencers and go, “Oh my God, there’s influencers.” But what they’re not seeing is that influencers are creating this tidal wave globally of every kid wants to be an influencer. You can’t get a job as an actor or actress unless you have an Instagram following. You can’t be the president of the United States, unless your Twitter has 100 million people. You can’t compete in business if your business has less followers than another business. Influencer is becoming an undertone of society in a very, very strange way. So as marketers and as humans and as business owners, we really need to start understanding that, that’s going to become the core element of a lot of things in our life, even if it’s beyond marketing and selling our products. Those are the two biggest things I’m seeing. The rest of it influencers are making more money, platforms are growing and changing, algorithms are getting killed, data’s important. But those are the two big things that I think are our major lead.

Stacy Jones (11:40):
Yeah. It’s amazing how much content is coming into play that everyone needs to know how to make some level of content now.

Joe Gagliese (11:46):
Right. Right. And that’s opportunity, right? Because the Superbowl commercials, I was reading something this morning when I woke up about one of the Superbowl commercials did an air for a company that makes products for women who are in postpartum, right. And what was interesting is I watched the commercial and the reason ABC didn’t air it was because it very much showed what women go through after birth. Right. They have to take care of them themselves because of the injuries as sustained from birth, they’re not feeling good, their bodies don’t look great. They’re talking about what really happens and they wanted to sensor that, right, and for good reason. But that company then put it on YouTube and now it’s going to get more views than any of the Superbowl commercials did.

Stacy Jones (12:41):
Without a $5 million price tag.

Joe Gagliese (12:43):
Right. So what that means is you can be influential in spurts. It doesn’t need to be from your following, if you’re creative as a content marketer and you really understand this space and this new generation that undertow it told you about, you can be influential for a period of time and it’s just as impactful as working on it for a long period of time, which I think is just incredibly cool.

Stacy Jones (13:07):
Yeah. Why do you think Musically didn’t kick off as well as TikTok? It’s the same premise in so many ways, so why did that app not… it’s done well, but why is TikTok just overtaking it so quickly?

Joe Gagliese (13:26):
Musically was a traditional call it, a Silicon Valley startup, right? And they had rapid beginning growth and then financials, they were investing everything back into the machine and then ByteDance, the Chinese company bought Musically and turned into TikTok. So, TikTok is Musically.

Stacy Jones (13:43):
I did not know that, but to me, I’m like this is the same platform just kicked up a notch. So it is the same platform [crosstalk 00:13:52].

Joe Gagliese (13:52):
It was purchased by a major Chinese company. And they changed the name of Musically to TikTok. And then what they did was they implemented a massive push to encourage older audiences to participate because it used to be this thing that you saw your eight year old doing, what is going on in my house, and this whole generation of young people are screwed to different forms, mediums of content, comedy, shots, photography, lifestyle teachings, very [inaudible 00:14:26]. And by taking that avenue, they were able to do a really incredible job of continuing to grow for the platform.

Stacy Jones (14:33):
Well thank you. I just learned something in influencer marketing and I had no idea about that, but it just makes absolute sense because it seems exactly the same thing. Perfect. All right. So how do you think brands can best utilize something like TikTok?

Joe Gagliese (14:49):
It depends. My golden rule is don’t force it, right? There’s a lot of brands who don’t appeal to that style of content or audience who are trying to force their way onto it, right? I would say measure your brand and figure out what its affinity is to that style of content. Is this something I can create something around that will make sense that people aren’t going to roll their eyes at and be like, “Why is Clorox doing an ad on TikTok, right?” So a lot of people force it, so figuring that out. But then also weird thing Viral Nation does, it’s a secret, but if you’re a small business person, do it. Sometimes on campaigns we’ll call influencers on a certain platform and we’ll say, “Hey, this is our challenge. This is our product. I want to give you an Amazon gift card or whatever you want to take this half an hour call with me.” But tell me how you would approach something like this on TikTok.

Joe Gagliese (15:42):
I have TikTok people who work here, I’ve TikTok experts who work here. But if you don’t have that, there’s experts who are just on the platform, right? I would say the best way to approach is call one of them, offer them something, businesses isn’t free, and ask them how to approach it. And I think some of the coolest things we’ve ever come up with have been from asking these people what they think will work best because there’s no one who’s going to know how to attack a platform better than the person who’s living off of it, right? I’d say that’s the coolest advice I could give on how to approach that platform.

Stacy Jones (16:12):
That’s a great idea.

Joe Gagliese (16:13):
Yeah, it’s fun too.

Stacy Jones (16:15):
It’s actually a secret marketing technique that a lot of agencies will use where they’re going out and they’ll do surveys for a brand in order to show them, the hidden truths that the brand needs to know about.

Joe Gagliese (16:26):
Yeah, we all do.

Stacy Jones (16:27):
Yeah. Why not? Okay.

Joe Gagliese (16:29):
Sometimes it’s important to do that because that’s where the truth actually ends up coming from false beliefs or sometimes taken down from that type of stuff.

Stacy Jones (16:39):
Where do you think the future of influencer marketing is going?

Joe Gagliese (16:42):
I think, like I said earlier, I think it’s going everywhere. From a business perspective I don’t know. I think influencer marketing as a whole will continue to grow, but I think it’ll grow not in the sense of grow in the scale of tons of companies, but it’ll grow in the sense of the deal sizes, how much influencers are getting paid and it’ll just become a more lucrative market. I do think there is a plateau. I think at some point in the next five years getting an influencer marketing is going to be much harder. Starting a company to influence the market is going to be impossible. It’s like starting a new digital agency at a scratch now is so hard, trust me I’m doing it. These types of things are inherently with any business going to get there. I think for me I’m more excited to see how much more influencer will play a role in everything else.

Stacy Jones (17:32):
So it’s really interesting in the fact that what we’re seeing a lot of times is, brands are going away from wanting those massive macro to celebrity size influencers right now as well because the engagement levels are just not at the same level that you can get with the nano or micro or a smaller macro level. Are you experienced the same thing or are you full tilt ahead with macro celebs size all the way?

Joe Gagliese (17:58):
I disagree unequivocally with that notion, but we don’t use as many macros. I’d say a majority of our campaigns are micro to mid tier influencers who range in between. Actually just a cool thing, I can send you the link to it, but business insider actually classified my ranking of influencers, that’s like the de facto guide to where influencers [crosstalk 00:18:20].

Stacy Jones (18:20):
Perfect. What is it? Share, share.

Joe Gagliese (18:25):
I got to pull it up. But I just break it down once and for all by platform. Because even when brands call me, they’re like, “I want micro.” And I’m like, is micro to use someone who has 2 million followers on YouTube as opposed to 20? Or is it micro to use someone who has 10,000 followers. I need to understand. So I built a thing that they put out. People underestimate the manpower that goes into micro and mid tier campaigns, which is a mistake. And it’s all budget related, so if you’re a small business macros, throw them out the window, because they’re unattainable from a budget perspective. But if I said to you as like an economic business person in my core KPI was brand awareness. So I wasn’t really necessarily as keen with content or driving direct sales and that type of stuff. I would say to you it might be better for us to find two or three monsters and have them hit 30 million views altogether. Then me to go out and find mid tiers or small to get me the same thing.

Joe Gagliese (19:26):
So sometimes I disagree with people’s notions that, mid tier influencers are more impactful, micro influencers are more engaged and et cetera. Because if you look at how big that audience is, you’re not comparing it tit for tat, you’re just comparing it on a way that’s not really true. But at the same time for medium businesses and longevity campaigns and consistency and et cetera, use the others. And then what we do is we layer in macros on what we call pulse points new. New thing coming out, launch of a product or site, a big event, something major going on. Like we’ll put the big guys in when the big guys are needed. And then the rest of our campaigns are naturally developed around ambassadors, building community, building content, building consistency. And we find it easier to do that with mid and micro influencers.

Stacy Jones (20:16):
Yeah, that makes sense. Are you finding more of your clients are looking for content creation or impression base brand awareness?

Joe Gagliese (20:26):
I think Viral Nation does a really good job at convincing them to use them as content creators. Because we think that that’s obviously beyond their organic reach. They’re the most value in all honesty. It’s the most value. It’s that connection they have with the people they’re showing, and their ability to make that content. So I’d say most of our clients are really looking at them as content creators. We’re going to make something that they find very difficult to make internally or with this creative agency that thinks the same way over and over, right? But at the same time, there are times where I’m behind a brand, 100% to go big reach with influencers. So it’s not more about the content, it’s about that. But I’d say most of them look at them as content creators.

Stacy Jones (21:08):
Okay. And then what are you all doing in regards to suggesting to clients on boosting posts? Are you suggesting setting aside additional budget to actually put behind influencers posts? Or are you just hoping that the organic scale of Instagram is going to carry it even though the numbers are just dropping about how much that actually happens?

Joe Gagliese (21:32):
Yeah. It’s a mandatory I’d say 95% of our Viral Nation’s campaigns. Viral Nation has a full media week. So for us, we have performance marketers, media buyers, digital buyers, et cetera. So depending on the campaign, it’s not a neat hard thing for us to get in there and do it. And if you look at the amount of money you paid for the influencer and you look at how much it’s going to cost to reach the rest of their audience, we’re talking about a few hundred dollars on the boosting side of things, right? So it’s almost like do you want a little bit of water or would you just like a full glass? It’s going to cost you 5% more. So for us it’s a no brainer. And for most sophisticated brands, it’s a no brainer. Where I pushed the envelope is, I love the idea of ads that we’re seeing as consumers coming from influencers as instead of the brand, which opens up white listing, right?

Joe Gagliese (22:17):
So we’ll get a budget from a brand that will include organic, it’ll include boosting, and then it’ll include media. And that media is going to be run to audiences that are similar, but they don’t know who the influencer is. And that’s where the content creator piece comes into it. Because what we’ve seen on average is the conversion rate on those digital ads is six to eight times cheaper, and higher producing than the ads they’re running on their own Burger King account or whatever. So there’s substantial room to play with influencers in those patterns.

Stacy Jones (22:48):
And how much involvement do you have in the creation of the content of what the influencers are producing? Are you doing checkpoints along the way? They’re obviously being given, these are the mandatories to include, this is what you need to stay away from. But how involved are you all getting?

Joe Gagliese (23:04):
It depends on the campaign in the scope of what we’re tasked to do. We have campaigns where we’re the be-all and end-all. We have strategy heads here who had a specific task that they need to generate for the brand and we will develop a very, very strict set of guidelines for them based on them though. It’s not based on us, it’s based on what we’ve seen them do, so it’s not for them. It’s just us saying, we want to make sure that this big piece of content comes out properly because we have other things we need it for. And then I’d say most of our campaigns are, like you said, here’s our guidelines, don’t go outside of this because we don’t want to have a problem. Check in with your idea, check in with your first edit, check in with your final, then we’ll make a call.

Joe Gagliese (23:47):
But yes, there’s a lot of agencies out there that are like, “Let the influencers do everything, leave it to them.” Influencers [inaudible 00:23:59]. Some of them are the devil, some of them are angels. I find with millennials in general, if you give them the reins, they’ll get lazy and they’ll give you what the least amount possible is to get through it until the next day. We like to have those parameters and work within it because we know as long as they’re working within it, we’re getting something that we want. All the way down to we require a certain types of content quality, in terms of how visible it is, what it can be shot on, et cetera. Just because we’ve had instances where an influencer’s paid for a campaign, picks up their phone and goes, “Hey guys, make sure you download this app. It’s really great. See you later, bye.” In their bathroom. And you’re like, “Oh my God, are you kidding me.”

Joe Gagliese (24:45):
It is very important to tell, you’re hiring them for a job, take them off the pedestal, you’re paying them, you’re their boss. This is what I need, and that’s it. And if you have someone push back from that, you shouldn’t be working from them.

Stacy Jones (24:58):
Yeah. And the smaller the influencers are usually a little bit less experienced and you’re starting to see as they grow in their follower base, they know how to achieve success, not only for their followers to watch their content, but also to actually get brands to pay them. So it gets a little bit more finessed.

Joe Gagliese (25:13):
Well, like in 2019 Viral Nation worked with over 14,000 influencers across all our campaigns. We’ve seen everything.

Stacy Jones (25:21):
Everything.

Joe Gagliese (25:23):
Good and bad and ugly. But we also have great relationships with CAA, William Morris, the big talent agencies, the small talent agencies. You sometimes work with agencies, sometimes work at the influencers directly. It’s a learning process. And we’ve been lucky enough… we have a really cool global reputation. So when an influencer gets an email from us, they know, “Hey, legit company, my friends have worked with them, they’re going to pay me, I don’t have to worry. I’m going to do what they say.” Whereas I’ve advised some friends and people, programs that are starting influencer campaigns and it’s hard for them to get the email back, the trust. When they tell them what to do, they’re like, “No, thank you. That’s not what I do, right?” I’m also in a naive position where, our buying power and stuff allows us more nimble and do more for a brand. And that’s just scale. That’s all that is.

Stacy Jones (26:16):
Well, for any listeners listening, influencer marketing means herding cats in many, many ways, no matter the size of the influencer. So with that many campaigns that you all have done, you’ve done a heck of a lot of cat herding.

Joe Gagliese (26:28):
Yes we have. We’ve had campaigns run up to 500 influencers on them, managed by humans. So yes, I’ll be forever [inaudible 00:26:37] from some of those campaigns.

Stacy Jones (26:41):
Yes. It’s amazing how easy it is for people to forget to do a hashtag, forget to do a hashtag ad sponsored. Things that get you sued by the government, followed up, legal trouble, FTC regulations.

Joe Gagliese (26:53):
We actually help build them. So we have a really good standing and we’ve never had an issue in our company’s history. But [inaudible 00:26:59] how many times posts have gone up and we have to send a legal letter instantly, this is on you. [inaudible 00:27:05] FTC guidelines will be included. We have to do… I recently saw one of the big, you know the mattress companies that come in a box?

Stacy Jones (27:13):
Mm-hmm (affirmative).

Joe Gagliese (27:13):
You know how they roll out-

Stacy Jones (27:14):
Like a Casper [crosstalk 00:27:16].

Joe Gagliese (27:16):
Yeah, yeah, yeah. One of them is IPO-ing and I don’t remember which one it is and they have to disclose that their number one source of sales came from influencers. But the caveat is by the way, 80% of them didn’t follow FTC guidelines, so we need to disclose that too, it could be an inherent risk on the stock at IPO. I was like, “Oh, my god, but they ran it all internal.” So they [crosstalk 00:27:39] started from scratch. It was exciting to see that influencer drove that scale of business for them, sales and a monster brand that’s not [inaudible 00:27:49] stock exchange. But it was also funny to see, “See, this is why we say work with an agency because these are the types of things that we fought through for years, right.”

Stacy Jones (27:57):
Yeah.

Joe Gagliese (27:58):
That’s fun.

Stacy Jones (27:59):
No, I was talking to a reporter the other day on an article and she was asking about a specific set of influencers and I was diving in looking to see what their recent campaigns were. I’m like, “Oh my gosh, she doesn’t hashtag, she doesn’t hashtag. Oh, this is not legal, this is not legit.” And she was a big influencer. It was interesting.

Joe Gagliese (28:19):
You know what’s really weird about, you can’t be a digital marketing person and fake it as easy as you can influencer. You got to actually know what you’re doing to fake Facebook ad campaign. First of all you need credentials, you need money and logins and all these types of things. With influencer marketing, it’s like I could start an influencer marketing company at my garage tomorrow and say, “Hey brand, I’m going to go get these…” And then you email them and they reply. And you’re putting them on escrow, you get paid and… You should see how big some of these little agencies have gotten off of that, right? [crosstalk 00:28:54].

Stacy Jones (28:53):
I know.

Joe Gagliese (28:54):
Those are the situations that create those things you’re seeing not coming from legitimate sources where people are accountable at those types of things. We turned down business in the CBD world, we turn down business in the gambling world, and you should see the size of those campaigns going on with influencer. Our lawyers say we can’t be a part of it. Because we don’t want to tow that line, but there’s tens and tens of… 100 million being spent in that space. It just shows you the immaturity of the space and it’s coming, but that’s what I meant by it’s going to change.

Stacy Jones (29:27):
Well, it’s also an interesting because even when I was dialing in on this influencer and looking at her work, it’s also the brand. The brand is not mandating that there is a reveal that the post sponsored. And we still encounter a lot of brands who are like, “Oh, I don’t know if I really want to do that.” That’s going to make it seem less authentic. If they say that they’re being paid to talk about what… but they’re wrong. Even if they’re right, they can’t legally do it. But people know things are now being paid. Everything.

Joe Gagliese (30:00):
So I’ve got two stories for you. One is, our talent agency got approached a couple of years ago, I won’t say the brand. It’s not a high end fortune 500 brands. It’s just a new brand on social. And the CEO of the company said, “Here’s the deal post without FTC compliance. Here’s the fine.” He sent the actual thing. He said, “If you get hit with that fine, I’ll play it. I’ll pay it. Post without it. I’m guaranteeing you in writing, I’ll pay your fine.” Because what people don’t understand is it doesn’t fall on the brand, it falls on the influencer first. So there’s times, and I don’t want to defend the people you looked at in any way because I don’t know the situation. But sometimes Viral Nation guarantees to energizer that, we’re going to make sure the influencers follow FTC compliance. We create that wall which is their protection, for lack of a better word. Shit hit the fan. It’s on me. Right?

Joe Gagliese (30:57):
And we have insurance and… The brands, I’m safe from this because these guys are taking [inaudible 00:31:02]. Then we in turn go to the influencer and say, “Hey, you’re accountable for FTC compliance and your contract sign here.” They break it. It’s not, it’s the influencer ultimately gets in trouble. It causes a big mess and everyone’s job. It’s the influencer who gets in trouble and sometimes they just don’t care. And that’s just the way it goes. But I would say that, 22 year old entrepreneurial me would be like, “You get them to post without it, because we might sell more, right?” I’m not naive and I’m not some angel, but at the same time I’ve also been in situations with businesses I advise where shit does hit the fan. And it’s, if I would’ve just put that stupid thing there, I could have avoided all this.

Joe Gagliese (31:48):
So my advice to young entrepreneurs and people with business is, just follow it. If it’s going to impact you, it’s not going to impact you 90%. 5%, 10% is it worth the squeeze? Right? It’s an important topic and I’m happy a lot of people are conforming.

Stacy Jones (32:05):
Well, it’s interesting. Our agency, I was sitting at my desk one day and I got a FedEx. What’s the FedEx? It’s a letter. Opened it up. It was from a lawyer from the FTC and it wasn’t that our agency had done anything. One of our clients on a campaign before they hired us and we were doing product placement for them and talk show partnerships and they were stemming off into influencer marketing, all the different things. They had run a little bit of a foul of what they were supposed to have been doing. And so during the research they came across our agency because we had some case studies up. They open up as an agency and for any agencies listening to this, you have to know that in or a brand, they don’t just look at that one campaign that might be potentially a foul, they’re going to open you up as an agency and look at every single solitary post you have ever created with an influencer, thousands and thousands.

Stacy Jones (32:58):
And you have to document and you have to show. And we’ve had our job done. We had the letters, we had the FTC guidelines, we had everything hashtag correctly, but it’s a scary process and it takes, as a owner of an agency or a team of an agency, it’s going to take you out of your day to day business to work and make sure that you’re in compliance. And so it’s just better to make sure everything is lucked up with a nice bow.

Joe Gagliese (33:23):
So we have a good relationship with FTC. Viral Nation’s headquarters and where I am right now is in Toronto, Canada. We operate obviously internationally and I remember same thing. We got a letter from the Canadian version of the FTC but they’re so nice. I read it, it was like, “Hey, Viral Nation, we see you guys are doing the right thing. We want to thank you for doing that and please continue to do that. And if you have any questions at all of any changes, please call…” They were super nice about it, right. And the whole FTC thing in the States. Our documentation is, there’s not an influencer of those 14,000 or more that’s posted without a contract. That’s our [crosstalk 00:34:06]. But what’s weird is there’s almost this double standard because you’re watching a music video with Drake and there’s Beats by Dre everywhere and it doesn’t say sponsored. You look at some of the talk shows like you talked about, you did in the past. Very not transparent. You look at movies.

Joe Gagliese (34:24):
A lot of these box office movies have massive product placements within them, whether it be the vehicle the villains driving or the heroes driving all the way to the drinks that they choose. And I feel like the scrutiny on influencer at times a little bit hard, but it just could be because it’s a new space and whatever. But I do think it’s tough.

Stacy Jones (34:46):
Yeah, it is hard. And as an agency who specializes in product placement, all those big things that you just talked about, it’s true. And there’s been a lot of controversy about it. And other countries have different laws. Germany and the UK have regulations for television that certain broadcast networks cannot actually show anything unless you have a pop up that says, “This is sponsored by…” And it’s super distracting.

Joe Gagliese (35:07):
[crosstalk 00:35:07].

Stacy Jones (35:08):
No, it’s horrible.

Joe Gagliese (35:11):
And they’re not saying and I have a problem with it. This pisses me off like. I’m a consumer. The guy is driving an Audi R8 in the movie and they put it there [inaudible 00:35:20]. I’m not sitting there saying Audi just abused my brain. You know what I mean? I think by actually bringing light to some of these things, it actually makes me more pissed off than… I’m not smart enough to figure out that this influencers holding this bottle and going, buy this new… I don’t know that she has… You know what I mean? I think there’s that weird… it’s weird. I’m not saying that anyone’s wrong or your space is wrong for doing what they’re doing.

Stacy Jones (35:45):
No, no. I’m not saying that. It’s just it’s interesting. I think it’s horrible and it takes away from content. Honestly, I think that the same thing with influencers, it’s just so interesting that our government has decided that people are, as you just said, not smart enough to realize. And it’s not just our government, every government. And that they want to protect people from being persuaded to buy or purchase something. And it’s just a very interesting, fine line. It makes sense for [inaudible 00:36:17], it make sense for pharmaceuticals, it makes sense for all those things that have super hyper regulations anyways, that you have to make sure that you get certain verbiage across. But for a car, for kitchen, something, it’s just silliness. [inaudible 00:36:34].

Joe Gagliese (36:34):
Well, the thing that pisses me off that I don’t even… they’re trying to stop, which they’re not, is, I’m this very fit woman on Instagram and I wear this waist trainer and all of a sudden I have abs and she knows she’s bullshitting you. He’s getting paid to do that. Or I’m a vegan and Wendy’s just offering me 15K to do a YouTube video. I’ve never eaten Wendy’s in my life, but now all of a sudden the Whoppers are my favorite thing on the planet earth. Those are the types of things that I think it’s trying to combat. What they’re doing is making it difficult to do marketing as a whole, right. And you’ll never stop people from doing that. I was at a conference once where the kid on stage was like, “I’m a vegan. I just did that because they paid me.” And I’m like, “Oh my God.”

Joe Gagliese (37:16):
We actually installed the policy here, our account directors and managers and executives and all that have to put the product in the hand of the influencer first. “Do you like it? Is this something you would use?” We do that because we don’t want to be in a situation where it’s, pay them to use this pen and talk about the pen. There’s certain things where it’s preference, a pen’s a pen, does it write? And you don’t need that level. But if I have someone marketing X-Box and they’re playing PlayStation, I’m an a-hole. Right? So that’s more of where I get ticked.

Stacy Jones (37:47):
Well, it’s also the authenticity that comes out there because it’s not on brand for them. And if it’s not on brand for them, it’s not going to follow up.

Joe Gagliese (37:56):
Agreed.

Stacy Jones (37:57):
So any last words of parting advice that you could share with our listeners today?

Joe Gagliese (38:02):
Harding advice, owning a marketing company’s hard and anyone who tells you differently doesn’t own a marketing company. And I think that’s… I really respect marketing owners. It’s a service business that’s unlike a lot of other service businesses. It’s so custom and fluid and changes so frequently that it’s never rudimentary. And that makes it difficult, and anxiety and et cetera. So kudos to all you marketing peeps. But I would say, focus on influencer marketing harder, but focus on it’s model at the same time. If you want to expand influencer or you want to do influencer better, it’s not about going out and getting more of them. It’s about more understanding the space and what’s possible. And I think if you are able to look at those things correctly and you extract the full value of influencer marketing, it would be a major channel, but pump and dump with influencers is not influencer marketing. That’s my last thing.

Stacy Jones (39:04):
And for any of those brands or agencies who want to get in touch with you, how is the best way they can learn more about Viral Nation?

Joe Gagliese (39:12):
Anyway, you can reach me personally and I can put you in touch with someone. It’s just [email protected], viralnation.com obviously. And as well as LinkedIn or any other place you can find us. We’re everywhere. If you want to speak to me directly, I help a lot of people and stuff. I’d be down to do that. But thank you mostly for having me. This was fun.

Stacy Jones (39:34):
Good, I’m glad you had a good time and I enjoyed speaking with you and learning about the true origins of TikTok which is still, I’m like totally makes sense.

Joe Gagliese (39:42):
Yeah, [inaudible 00:39:43].

Stacy Jones (39:44):
Awesome. Well, Joe, thank you so much. And to all of our listeners, thank you so much for tuning in to Marketing Mistakes (And How To Avoid Them). I look forward to chatting with you next week.

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