Richard Spalding is CEO and co-founder of Diffusion Media Group, which runs viral marketing agency The 7th Chamber, as well as social media marketing agency Grape Digital.
The company recently sold entertainment site Kontrabrand to Dennis Publishing for an undisclosed sum. I’ve been talking to Richard about the sale, and his plans for the future…
Why did you decide to sell now?
Kontrabrand gave birth to quite a few products, including 7th Chamber, and became neglected as we became more involved with these projects.
Also, to compete as a media business requires deep pockets as the market becomes more competitve, so we has the option of either seeking investment or selling it, so we put the site on the market.
You had a prior approach from ITV?
While we were looking for investment a year and a half ago, the company was in acquisition mode at the time, and the price would have been up to £50m.
After spending up to six months and £250,000 on due diligence and legal bills, ITV had a change of board during the process and the deal eventually fell through.
What was the process of selling to Dennis like?
We approached 15 potential buyers about Kontraband through a third party, and went into due diligence with a couple of them, before accepting the offer from Dennis.
It can be a complicated and lengthy process, so it’s best to get advisors in to handle the legal and financial side of the process, though this can be expensive.
What are you planning to do next?
I’ll be focusing on social media marketing and working on Grape Digital and 7th Chamber. We are plugging into creative agencies to help give them a digital focus.
How has viral marketing changed over the past few years?
It has become a lot more sophisticated over the last couple of years, and now it’s not just about video. It’s also about creating viral ideas that can move into different media formats, the recent best job in the world idea is a good example of how this can work.
A viral video gives a firecracker effect and gets noticed, but doesn’t necessarily create engagement and longevity. With a viral idea, you can create huge amounts of advocacy from audiences.
Do you have any examples of this?
The Ford Fiesta campaign launched by Ford in the US is one, where it gave cars to members of the YouTube generation (digital storytellers), who then blogged about the cars, creating huge amounts of continuous coverage and generating buzz in the right places.
Whereas clients often adopt the traditional media approach of bursts of activity, with this kind of campaign people are continually feeding into it.
We are in a fantastic space where clients are realising that Facebook, YouTube and Twitter are not going away. TV ads are becoming more irrelevant, and is often responding to what is happening online.
How do you approach the issue of measurement?
We have spent several years building tracking technology, and use the Diffusion Tracker for our campaigns, though we haven’t officially launched it yet. We measure page views, and scrape comments from Twitter blogs around what is going around that content.
Are many clients asking for campaigns to involve Twitter?
Yes, a lot of clients want to be on Twitter, but our response is why, and what will you be saying on there. Many are unsure how they want to use it. It is a communication device at the moment, though I’m not sure it’s being used for what it will ultimately be used for. It’s very experimental at the moment.
Dell is a good example of what can be achieved through Twitter, and there is a sense that it is becoming a customer service tool for many companies. Our best successes have been on Facebook and YouTube, where it’s easier to find the more engaged users and target campaigns.
What are the common elements that you see running through successful viral campaigns?
A successful viral campaign needs a good engaging piece of content first of all, then it needs to hit the right audience.
Do you still have ties with Kontrabrand to seed content through the site?
We still have 18 months of further usage of the site at a discounted rate. Kontrabrand offers a very focused and loyal audience; males between 18 and 34. If the campaign is suited to this demographic, then it can create a lot of views and effective engagement.