Zefr co-founder and co-CEO Richard Raddon has the warm, friendly demeanor of a small town pastor. But instead of the word of God, he preaches salvation in analytics.
For Zefr, YouTube provides the gospel. Every 60 seconds, 300 hours of video is added to the platform, which in turn generates billions of views each day, along with a massive wealth of information about its users. Zefr employs its proprietary technology to help customers from Hollywood to Madison Ave. locate YouTube content containing their IP, monetize it, and use the data it gleans to market their products efficiently with hyper-targeted campaigns.
“If am a shoe company, I can target all the videos where users are unboxing shoes or, if I’m a yogurt company, I can target everybody who’s talking about wellness on the platform,” said Raddon, who shares the title of co-founder and co-CEO with business partner Zach James. “There’s so much content being uploaded to YouTube, it has a breadth of content that we believe will be unparalleled by any other platform out there, now and in the future.”
Zefr’s belief in the power of YouTube has served the company well. The company manages over 375 million videos online and tracks over 31 billion video views a month. Its list of clients includes Warner Bros., Sony Music, Universal Studios, Soundcloud, Hasbro Studios, “Saturday Night Live, People Magazine, Nintendo, Adidas and Nike. But the company doesn’t have a monotheistic view of the online video world.
“Our software suite is platform agnostic,” said Raddon, which means it can be ported to any social platform with video, whether it be Facebook, Snapchat, Twitter, Periscope or the next hot app currently be dreamt up in a college dorm room.
The key is that these social platforms all promote deep social engagement, as opposed to TV, which is a passive experience.
“We argue that engagement ultimately drives more ROI,” Raddon said, “because once you have an engaged individual consumer (of video), you know that you can flip them into an actual consumer where they purchase your goods, and there’s a high likelihood that they’ll be an advocate for you brand.”
While advertisers are giving increasingly more money and attention to online video campaigns, traditional media remains their primary promotion tool. A recent study by eMarketer projects $70.6 billion will be spent on TV ads in the U.S. in 2015, compared to $7.8 billion for digital video ads. Raddon acknowledges the disparity, but he firmly believes that digital video is the future.
“As they learn to harness and monetize all the data and the energy associated with these new platforms, it’s going to be better for consumers, better for the media companies over the long term,” Raddon said. “I just believe everybody wins in this scenario.”
Raddon began his show business career in Chiago working as an assistant for writer/director John Hughes, a fellow alumnus of Glenbook North High School in the Wind City suburb Northbrook, Illinois, where portions of his 1985 film “The Breakfast Club” were shot.
“I sent him my resume when I was still living in my parent’s basement,” recalled Raddon, who had just graduated from Brigham Young University when Hughes hired him. “He recognized the address and called me in for an interview.”
After nearly two years working for Hughes, Raddon to set out for Los Angeles to launch a career as a filmmaker. But, first, he stopped in off in Park City, Utah, for a few weeks to take one of the few paying jobs at the Sundance Film Festival, running prints between theaters.
On Raddon’s first night in Los Angeles, Raddon decided on a whim to check out UCLA’s film school. As he approached the film department building, Melnitz Hall, he was greeted by a graduate student who invited him to come inside and check out a screening of his thesis film, “The Passion of Martin.”
The student was writer/director Alexander Payne, who went on to win a pair of Oscars for “Sideways” and “The Descendents.”
“I saw the film and all I could think was, ‘Wow, people are so talented in this town. I can’t believe I just watched a short film from a college student,’” Raddon said.
The demonstration of artistic prowess intimidated Raddon, but not enough to keep him from producing a trio of features, “The Making of ‘… And God Spoke” (1993), “Shooting Lily” (1996) and “A Slipping Down Life” (1999). Although they enjoyed modest success on the film festival circuit, the experience left him convinced that he didn’t have a future as a creative.
“I found that I wasn’t that good at it, quite frankly… at intuiting what to create, just having a gut instinct about it” Raddon said.
The board of the L.A. Film Festival recognized Raddon had other cinema-related skills, and hired him to be its director in 2000. As much as he liked the job, he was becoming increasingly obsessed with the idea of starting a media technology company.
“I think the moment YouTube launched, I realized that the opportunity for technology to truly change the landscape of media had begun,” Raddon said. “I needed to find an area that was sort of fresh and new, that I didn’t need a ton of capital to enter into. Zach and I had this idea that it would be great if there was one place you could go and find clips of movies, because they didn’t seem to be aggregated in any sort of specific way online.”
Raddon resigned from the L.A. Film Festival in November 2008, and he and James, a former investment banker for Credit Suisse and a longtime family friend, launched Movieclips the following year.
Movieclips was pitched to the public as a site where they could watch snippets of their favorite films, with the option to click to rent or buy them in their entirety. To the studios, it was sold as a new way to monetize their catalogs in the face of declining DVD sales.
When the company launched a YouTube channel in 2011 to carry its studio-licensed clips and trailers, Raddon saw that tens of thousands fans were posting the same content without permission. The studios’ response was to issue takedown notices through YouTube, ordering users to remove the unauthorized postings.
“At that time, the studios had a very skewed view of it. They looked at all that activity as piracy,” Raddon said. “But they weren’t acting like pirates, they were acting like fans.”
Raddon and James convinced their studio clients that they would be better off letting people keep the clips on their YouTube channels, and simply claim the Google AdSense revenue they generated. That way, everybody won — the studios (and YouTube) made more money, users got to keep the videos on their pages, and people searching for clips would no long click on a link only to be greeted with the message, “This video is no longer available due to a copyright claim.”
The studios also maintained the goodwill of the public, avoiding the self-sabotaging missteps made by the music industry, which created a public relations disaster by suing more than 35,000 individuals for illegally downloading songs, including teens, tweens, single mothers, grandmas and at least one dead person.
As rights claims became a bigger part of the business, Raddon and James’ focus shifted from media distribution to data and analytics. In August 2012, they changed the name of the company to Zefr. Their vision was reinforced in February 2014, when Zefr raised $30 million in a new financing round led by Institutional Venture Partners, which it targeted for software development and the expansion of its sales and marketing teams. Two months later, they sold Movieclips to Fandango.
“(Movieclips) actually acted as a test lab for us, because some of our media partners started asking us, ‘Would you manage our official channel on YouTube, because we see you’re having a lot of success with your Movieclips channel,’’ Raddon said. “We got into that business mostly because we were building little tools and pieces of software, and we were taking all the data and insights we were collecting through the rights management business to leverage that for the channels.”
Today, Zefr has approximately 270 employees. Two-hundred of them work at the company’s headquarters in L.A.’s beachside Venice neighborhood, which divides its operations between the rustic brick Stronghold Building on Abbot Kinney Blvd. and a 25,000-square foot former Coors Beer warehouse located across the back alley, which previously served as the studio for famed artist Edward Ruscha. The balance of its workforce is spread out over offices in New York, Boston and Chicago, and Provo, Utah, the latter of which is home to Engodo, a social media advertising startup it acquired last year.
As much as Raddon believes in the power of social video, he understands that sometimes people need to witness a physical manifestation its popularity to fully grasp its impact. For that reason, he’s recommends that his clients visit events like VidCon at the Anaheim Convention Center from July 23 to 25, where they can see the digital influencers’ masses of fans in all their hysterical, screaming glory.
“It’s one thing to see numbers on a spreadsheet or a dashboard or in a report, and it’s another to see up-close who these people are,” Raddon said. “It’s really compelling, because it starts to formulate a reality for a lot of these marketers. It gives them a sense of the millennial customer. This is what they look like, this is how they act. And now, when they look at the numbers, they actually have a visual to wrap their heads around.”
But, for Raddon, spreadsheet numbers and data-talk are just fine.
“I’ve always been an individual that relied more on patterns and sort of an analytical thought process,” Raddon. “As I transitioned more into technology, it was like I’d found my home, if you will, because it was like finally the people that I was talking to were speaking my language.”