As consumer-created advertising continues to evolve, a new company has formed that may take the medium to a new level by providing a place for brands and consumers to interact to create new video ads that may appear on TV. XLNTads was formed in December and is currently in the process of signing up major brands to occupy pages on its website, which will also include an area for creators. XLNTads CEO Neil Perry discusses the formation of the company, how it will operate and what it says about how consumer-created video ads are changing the way major brands advertise.
iSPOT: Please provide some background about your company.
Perry: I’d love to able to take total credit for the idea but it really came from Rick Parkhill. He’s the founder and primary investor. He is the head of iMedia Connection, a company that puts on Internet trade shows. I’ve done a lot of work with him. He’s based in San Diego. My background is with McDonald’s Corporation. I was the head of online marketing. I was there for 23 years and the last three I was head of the online division. I got to know Rick there. He asked if brands like McDonald’s might be interested in something like this. In December we decided to start it and whipped together a website. We got it running and announced the start at a brand summit that Rick’s company put on. Now we’ve been talking to the top 100 brands for the past six weeks, trying to line up our first customers.
iSPOT: How will it work and how will brands and consumers be involved?
Perry: It’s on both cylinders. We’re lining up about 15 brands, like McDonald’s, Cadillac, Snickers and Diet Coke. Each one will have their own section on our site. I’ll use McDonald’s as an example. They want to do consumer-generated ads but they’re a little nervous, because it costs a lot to set up and most consumer-generated campaigns find themselves running on sites like Sharkle or YouTube and the environment isn’t perfect for McDonald’s because they want to have a little more control. So we’re going to host it. You’ll go to the McDonald’s site, it will say enter to win a year’s supply of Big Macs. Then you’ll click to go to XLNTads and there’s a homepage that looks like McDonald’s, branded with company colors and logos. We give information about the program, encourage them to register and submit an ad and tell them what they’ll win if their ad is selected. We’ll have 15 brands on the site doing the same thing, so once they’re done they can click on XLNTads in the corner and go to our homepage and find other opportunities to create an ad.
iSPOT: Is this the first time these brands are getting involved with consumer- generated ads?
Perry: For the most part they haven’t done consumer-generated ads yet. Once Doritos did it they had an infrastructure set up for video hosting and they can keep using the technology over again. The brands we’re talking to are interested in doing it but something has scared them off, where the ads will run or the cost.
iSPOT: Do you think the goal of the brands is to run the ads on TV or just to run the contests online to generate consumer excitement?
Perry: For the most part they’re doing it to come up with commercials they can use. As companies do more of them they won’t get the same press as Doritos or Dove, but the cost to run our program versus the cost to produce a fully functioning TV ad will be about a third of the cost.
iSPOT: Are you getting any assistance from experienced creators of video ads?
Perry: We’re setting up an advisory board of people who are video contributors to top sites, people who have contributed up to 150 video clips. We’re putting together a board of about five of them. They’ll help us figure out what we need on the site to be appealing to creators. They’ll help us design a structure that will make the site good for brands and creators.
iSPOT: Will the creators be novices or professionals?
Perry: We’ll see a lot of semi-professionals, the people who want to do it are junior art directors or copywriters, they’ll get together with their friends and take a stab at it. And the work will be good, based on what Doritos and Dove have done. And the work the students did for General Motors was very engaging.
iSPOT: Where do you think consumer-generated video is taking advertising?
Perry: There’s a trend going on in the advertising community. A lot of boutique shops are springing up and specializing in creative. Big agencies are changing their business models. I can see this as a portion of every major marketer’s creative as well as research. I see no reason why brand McDonald’s wouldn’t say I got some good ideas out of our lead agency, but I’d like to see if there are some other good ideas out there, so I’m going to ask our customers to make an ad for us. It makes a lot of sense.
iSPOT: The goal of brands is to appeal to consumers, so if they can appeal to consumers to come up with work that demonstrates they like the product, it’s a good thing.
Perry: I agree completely. I think that’s going to be a trend with brands reaching out to get better ideas. They’ll still need their agencies, they’ll need strategic direction and beautifully executed commercials, but they can also get very targeted consumer-created commercials to fill out their portfolios.
iSPOT: You’re based in Philadelphia, but your founder is in San Diego. Are you bicoastal?
Perry: I have sales on the West coast and a brand liaison officer in New York. I’m in Philly with a development team. We’re all over the place, but it’s a virtual world.
iSPOT: The website is up and running, but are you still developing it?
Perry: The website is brochure ware, it’s a way to talk to brands or agencies about the idea. We direct people to it and show them the video player to get the concept. It will look different and be more elaborate and interactive. It’s a good base piece to show the folks how there will be a section for brands and consumers and how we’re going to pull the two together.
iSPOT: Do you have specific brands lined up yet?
Perry: We’ve issued letters of intent and they’re figuring out if it fits into their brand plans. We hope to be announcing in the next 30 days at least a half dozen brands that have signed up.
iSPOT: Will McDonald’s be one of them?
Perry: I’ve spoken to a few people but haven’t pushed them too hard. It isn’t easy for McDonald’s because they’re a very protective company. But when you look at Diet Coke and Cadillac there’s a good chance we’ll be able to sign up some major brands. We’ll see which ones.
