It is difficult to monetize advertising, so is it feasible for content agencies to build their own brands?

As it becomes increasingly difficult for content agencies to build brands and short videos are on the rise, many people are targeting building their own brands. However, can building their own brands solve the agency's monetization problem? This article analyzes this issue from three aspects: from top IPs to Internet celebrity brands, how many agencies are building their own brands, and why they should build their own brands. Let's take a look.

1. From Top IP to Internet Celebrity Brand

In August 2018, Li Ziqi's eponymous brand, "Li Ziqi" online flagship store, officially opened, positioning itself as an "Oriental food lifestyler" and mainly selling products such as "Su Zao Sauce", "Changbai Ginseng Honey" and bird's nest. Within less than a week of going online, the store's sales exceeded 150,000 and sales revenue exceeded 10 million.

Afterwards, Li Ziqi's snail noodles became popular all over the Internet.

According to Dolphin Think Tank, the sales of Li Ziqi brand in 2020 were 1.6 billion yuan, of which the sales of Li Ziqi snail noodles alone exceeded 500 million yuan.

However, in August 2021, Li Ziqi stopped posting short videos due to a dispute with Weinian, the organization behind her, and has been off the Internet for more than a year. As a result, although the influence and popularity of the "Li Ziqi" brand are still there, the volume and sales have declined.

According to data released by Tmall, Li Ziqi ranked fifth in the online sales ranking of grains, oils and fast food on Double Eleven 2022. In 2020, Li Ziqi ranked first.

In fact, after gaining traffic, Li Ziqi and Weinian are not the only ones who choose to build their own brands.

In 2016, the food expert Yeshi Xiaoge started his career on Bilibili. He became popular for a short video titled "I heard that instant noodles made with mountain spring water are especially delicious," and caught up with the traffic trend of short videos. Later, Yeshi Xiaoge created a number of works, mainly following the simple and natural original ecological route, and accumulated more than 20 million fans on the entire network, becoming the top IP of domestic food short videos.

Wang Minmin, the founder of Juli Culture, the organization behind Wild Food Brother, once revealed in an interview: "The company has invested nearly 10 million in the account of Wild Food Brother." After leading Wild Food Brother to complete the transformation from "Internet celebrity" to "top IP", Wang Minmin created the brand of the same name "Wild Food Brother" and began to seek commercial monetization.

In September 2017, Wang Minmin’s team sold “Wild Food Brother” beef sauce on Douyin for the first time. After only a one-minute video was broadcast, more than 10,000 bottles were sold within 24 hours, with annual sales of more than 40 million.

In 2018, Wang Minmin and his team upgraded and adjusted the "Wild Food Brother" brand, adding duck egg sauce, colorful pepper sauce, sesame sauce and other sauce-based products to the original single beef sauce. Wang Minmin called this move the "2.0 version" of "Wild Food Brother".

In May of the same year, the "Wild Food Brother" Taobao flagship store was officially established. Currently, the Wild Food Brother's Taobao store has 120,000 subscribers, but the store only sells three foods: beef sauce, lard residue and peanuts.

However, as competition in the entire industry intensifies, the problem faced by Yeshi Xiaoge is that the labor and production costs invested are becoming increasingly high, and this path to monetization is becoming increasingly difficult.

2. How many organizations are building their own brands?

From 2017 to the present, there are quite a few celebrities and organizations that have built their own brands.

Xinbochang counted the brands built by major institutions from 2017 to 2021 (Note: only short video-based content institutions are counted, excluding e-commerce institutions)——

1. Judging from the time of establishment, the brands built by these institutions were mainly established in 2018-2019. This was the time when short videos exploded, many top short video influencers emerged, and live streaming with goods was also budding.
2. From the perspective of brand types, most of them are concentrated in personal care, food, beauty tools, etc., and the average customer price is mostly less than 100 yuan. It can be seen that the categories that institutions start to enter when building their own brands almost avoid the track that requires a lot of R&D investment. They choose personal care, cosmetics, food, etc. with relatively mature and stable supply chains, which are also the most popular categories among consumers.
3. In terms of brand promotion, these organizations mainly adopt the method of brand self-broadcasting. According to Xinbochang’s observation, the above-mentioned organizations have their own flagship stores on Douyin and Taobao, and have opened live broadcasting to sell goods.

So, how are these brands developing?

Apart from brands directly named after celebrities such as "Li Ziqi" and "Wild Food Brother", the brand with the highest number of fans in Douyin live broadcast rooms is Qiechu owned by Jinjia, with 279,000 fans; followed by Out of Office owned by Seshan, with 181,000 fans.

In addition to brand-owned broadcasts, agencies also work with their own influencers to incubate brands through their top influencers. Among them, the "excellent student representative" is Jinjia's personal care brand - Qiechu.

Jinjia, which transformed from an imported brand agent to a brand owner, established its NCM subsidiary "Shanghai Jintian Culture Media Company" in 2017, which includes today's top beauty influencer @Cheng Shian.

In August 2020, a major single product, hair care oil, was first launched on the market; in January 2021, Cheng Shian released a 4-minute "hair care tutorial" video on Douyin and Xiaohongshu.

In the video, Cheng Shian stood directly in front of the camera and demonstrated under the shower head in the bathroom how he wets his hair, how to foam it, how to dry it, and a series of other issues. He also demonstrated how to use hair care essential oil after washing his hair. The video received over 3 million likes on Douyin.

Although Cheng Shian later removed the video, in the keyword ranking displayed after searching for "Cheng Shian" on the platform, you can still find phrases strongly related to "shampoo" and "hair care".

In addition, in May 2021, Weilan, a subsidiary of Dayu Network, signed a contract to authorize its top influencer @仙姆SamChak as the "Chief Experience Officer" of the brand. At that time, SamChak conducted about 9 live broadcasts with Weilan in 90 days and introduced Weilan's products many times on the official account.

In addition to the agency's own influencers, influencers from other agencies also promote and evaluate brands built by different agencies. For example, Luo Wangyu and Cui Jianan, a makeup influencer under Kuaimei, have both worked with Qiechu. Among the above brands mentioned in Xinbochang, Qiechu has the most impressive data.

According to data from the Douyin live broadcast room, Qiechu has conducted 99 live broadcasts in the past three months, with sales of 100,000 to 250,000 yuan and GMV of 10 million to 25 million yuan. However, except for Qiechu, the GMV of other brands is almost less than 100,000 yuan.

From the Taobao stores, Zhiyan under Qingteng Culture has a monthly sales volume of 3,000 pieces, while Konikoni under Wei La has a sales volume of only 800 pieces. It is not difficult to see that not all organizations can successfully build a brand.

3. Why build your own brand?

Nowadays, with the rise of live streaming, it is not new for e-commerce anchors and institutions to build their own supply chains. Compared with short video influencers who have a lot of traffic, e-commerce anchors obviously have stronger ability to bring goods, and it seems easier to open up a closed loop from traffic to monetization.

As early as 2018, Li Jiaqi registered his own brand trademark "2+7". In 2020, he also mentioned in an interview that he hoped to become the Estee Lauder of China.

Earlier, Zhang Dayi launched her own brand Big Eve, and B station UP host Dong Zichu also has his own brand CROXX. There are also ingredient analysis blogger Junping the Great Devil and his brand JUNPING, as well as Wu Dawei and his brand Park Factor, etc.

Simba's agency Xinxuan is actively building its own brands. According to incomplete statistics, the brands created by Xinxuan include Cotton Code, beauty care brand MRSIMBA, and daily chemical brand Miracle.

"Sister Taozi from Shu", a food expert who became very popular in 2020, quickly launched her own brand of the same name after becoming famous; Teacher Xiao Xiaosha also owns her own high-heeled shoe brand 7or9 and clothing brand R30.

At the end of June 2021, Jiaogepengyou invested in the home furnishing brand "What Horse"; at the end of October, it launched the clothing brand "Reload"; at the end of November, it launched the accessories "Love Joshua Tree". These brands have been tested on a small scale in Luo Yonghao's live broadcast room, and behind them is the deep binding of Jiaogepengyou and its subsidiary "Jinwei" supply chain.

Huang He, the founder of Jiaogepengyou, once publicly stated: "Before the Douyin bonus ends, we must accumulate some of our own brands. We have to go one step further and lay out the upstream a few months earlier than others, so that we can build barriers."

Unlike the aforementioned content agencies that build their own brands, e-commerce agencies build brands in order to create their own supply chain. Regardless of whether these brands are ultimately successful, e-commerce agencies can always take a step back and promote other products.

But it is difficult for content agencies. Especially when e-commerce agencies and live streamers sweep the industry, the living space of content agencies seems to be further compressed.

Nowadays, more and more short video experts and content organizations are flocking to live streaming to sell goods, but in fact, not many have successfully made the transition.

“MCN means you can get a lot of traffic, but it’s like rain from the sky, not all MCNs can catch it. Most MCNs don’t have a basin to catch it.” Ding Junyun, founder of the MCN agency Zhixing Yida, once said this in a dialogue with Xinbochang.

On the other hand, the instability of traffic and fierce competition in monetization channels have also led many institutions to begin to think about how to expand their business boundaries to ensure the long-term development of the company.

Ding Junyun once mentioned two points: it is very difficult for MCN to become a company and have long-term value; for entrepreneurs, MCN is not a good business model. Therefore, in Ding Junyun's view, the traffic value of MCN must eventually be transformed into a sustainable business.

The institutions have "foreseen" the ceiling of their business and are unwilling to help others make wedding clothes, so they choose to break the "roll" by building their own brands in order to seek longer-term development of the company. In comparison, private brands are more controllable.

After all, for MCN, whether it is building a brand or selling goods, it is necessary to find its own business model in order to move forward better.

Author: Xiaolongguo; Source public account: New Broadcasting Field (ID: New_bc)

Original link: https://mp.weixin.qq.com/s/dUbm_teJLRYysZppc59lQw