CEO of video ad creation platform Shakr: Big agencies are feeling disrupted, smaller shops are our biggest customers

The CEO of a video creation platform on which ads can be made in minutes for less than US$100 has said that advertising agencies are his biggest customers, and that Australia is the young firm’s fastest growing market.

David Lee at Tech in Asia

David Lee presents a slide comparing Shakr with the competition at Tech In Asia

After giving a talk about his business and the growth of video at the Tech in Asia conference in Singapore last week, Lee, who is CEO of San Francisco and Seoul-based Shakr, a platform for making simple videos from material made by a network of video designers using a drag and drop function, was asked what he thinks advertising agencies make of businesses such as his own.

Lee responded: “If you talk to the big agencies, I think there’s a sense of disruption they’re feeling. But the smaller and medium-sized agencies are benefitting from the ability to use video.”

“Every agency needs to have a video strategy, but if you’re catering for advertisers that are spending US$5-10,000 a month they can’t afford to produce the creative that enables them to run video ads,” he said.

Following up with Lee via email after his presentation, he told Mumbrella that ad agencies and production houses “will continue to play a tremendously important role as the ad tech industry evolves,” and that some of the best videos on Shakr had been made by agencies.

ShakrHe noted that the freelance community was another big user of the platform.

“We’re seeing creative professionals increasingly able to untether themselves from companies, acting as independent creative professionals by leveraging platforms like Shakr,” he said.

“Traditionally, these creative professionals would sell their expertise for a fixed price per hour, or a fixed price per project. Their work lives on beyond the time spent on the project, but they’re not compensated for that time. It doesn’t make sense.”

With Shakr, designers can turn at least a portion of their creative output into recurring revenue, Lee pointed out. Designers make 70 per cent of the revenue from the creation a video. They earn every time one of their video styles (150 styles are available on the site) is purchased.

“An apt comparison would be how software developers are now earning recurring revenue from apps they sell on the Apple App Store, which can be far more lucrative than being an employee at a software company,” he said.

“Meanwhile, production companies are also seeing the value of shifting from a services model to productisation. It gives their business cashflow that goes beyond each client and each deal they bring in.”

“All of that being said, for the foreseeable future I am absolutely confident that top agencies and production companies will be able to increasingly command top dollar for ‘blue chip’ work for big brands.”

“What’s really happening here is a poorly served segment of the ad industry – small and medium sized businesses — are being given a meaningful chance to compete with large enterprise,” he said.

The model for online video creation sites, a market in which Shakr has many competitors, is about unlocking access to video ads for clients on a budget, Lee said, adding: “Agencies have been the ones coming to us.”

Lee said that bluechip advertisers that tend to be the clients of big ad agency networks “aren’t our target market,” and the business is aimed at smaller-spending SMEs who might otherwise spend on still-image campaigns.

Agency clients of the business in Asia include Flow9 and Kmong, both Korean agencies, Get Community and Spinlab of Australia.

On Shakr’s website, the company is introduced as a simple new way to make videos. The blurb reads: “Choose from hundreds of video designs by top motion graphic artists from around the world to make your own professional looking video in minutes. No previous knowledge required.”

About one third of Shakr’s users are in Asia, down from 60 per cent three months ago. Lee says this is a result of a surge in demand from English-speaking markets, the largest being the US, Australia the fastest growing.

In a presentation which he began with a push for the value of video for brands, Lee referred to a PricewaterhouseCoopers report that predicted video creation to grow by 20 per cent globally through to 2020.

Brands “can’t afford not to be into video,” Lee said, but admitted that people are starting to wonder if they are using it effectively.

The solution, he suggested was split testing, where advertisers make a number of versions of videos and test which work best.

Even companies with big budgets have a limited ability to do split testing, Lee suggested, since they don’t have the time or the budget to make different iterations of their creative.

Lee shared that Shakr’s most successful videos have included a piece for a Korean lingerie e-commerce brand, that has registered more than 3m views on Facebook.

Shakr has been funded by the parent company of Korean social media giant Naver, NHN, and super angel fund 500 Startups.


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