Case Study: Grapevine–how to bootstrap an agency

Grapevine is a YouTube influencer marketing specialist.  Founded in December of 2012, Grapevine is an agency that helps brands sell products by working with YouTube stars.  Essentially, YouTubers use the advertiser’s products in their videos, and they place a link to buy.  Today, Grapevine has a multi-million dollar runway – all started with basically nothing.

Brendan Lattrell founded Grapevine.  He was a producer for the Discovery channel.  Lattrell observed that some YouTubers were getting more views than his prime time shows.  At the time, for advertisers to be present on this growing channel, the prevalent solution was to place banner ads or pre-rolls (commercials that roll before the actual content).  But there wasn’t many options for advertisers to provide in-content marketing.  In-content marketing has a long history in traditional media.  Soap operas were named as such because they were initially underwritten by companies like P&G to sell soap.  Some of my favorite in-content marketing (otherwise known as product placement or product integration) moments include the Minis in the Italian Job, Reeses’s Pieces in E.T., and well, Google in the Internship.  Of course, who can forget Manolo Blahnik in Sex and the City or Coca-Cola in American Idol?  But in 2012, such in-content marketing was a new idea for YouTube.  Lattrell knew that there was an opportunity to deliver value to advertisers, but first he had to build a business to do so.

Grapevine started by targeting the color cosmetics (basically makeup) industry.  They started with as narrow of a target market as possible.  This way, they were able to simplify the business while fine-tuning their business model.  By staying with one industry, they eliminated variables.  They didn’t have to learn the nuances of each different industry.  With this focus, they were able to grow quickly and leanly.

Grapevine selected the target market by weighting various market segments based on market size, number of YouTubers in that space, marketing spend in that space.  Beauty is a $400 billion industry with 51% marketing spend and a lot of YouTubers.  There were other markets under consideration.  They tested the hypothesis on what markets would work on YouTube by creating test channels and evaluated traction against various YouTube communities.

Once the target was selected, Grapevine went after it aggressive. Founder, Brendan Lattrell, shared that he started with sending LinkedIn messages to beauty executives and attending trade shows.  He didn’t have a booth at trade shows.  He went to beauty trade shows and talked to beauty brands.  He sold campaigns right there at the trade show.  He reached out to YouTubers on his laptop.  And at that time, his entire business was built spreadsheets.  (As they grew, technology streamlined and replaced spreadsheets.)

As they grew, they expanded to other beauty products such as skincare and nail, and slowly extended further to other fashion and lifestyle products.  Result:  A growing agency that continues to attract advertisers – and investors.

Let’s review how Grapevine built their business in 3 simple steps:

  1. Identify the target market, and focus on servicing them
  2. Identify what you can do for this target market
  3. Hone in your business, and grow moderately

How can you apply these lessons for your business?  Comment below.  If you think this case study is interesting and helpful, share it.  

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How I learned this lesson (and how you can too):  Brendan Lattrell shared the story of how he built his business and how he can help others build their brands on Youtube on The Craft of Marketing podcast. 

Photo credits: Karl Jonsson

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