VaynerMedia’s mission is to help brands to best leverage online platforms to build engaged communities that support their online marketing endeavors.
Gary Vaynerchuk’s entrepreneurship journey started with alcohol. His family, natives of Russia who migrated to New Jersey, owned a wine shop. Vaynerchuk dreamed of one day building the biggest winery in the world. However, when the Internet arose, he realized that he did not have to establish such a large physical presence. Instead, he could just create an online wine store.
He did just that, launching WineLibrary.com in 1996, a website that sold his family’s products. Over six years, it helped grow the shop from a $3 million to a $60 million business. Vaynerchuk decided to extend the brand by starting “Wine Library TV” in 2006, a daily webcast that discussed wine. The program became popular, especially when he used social platforms such as Twitter to promote it.
Vaynerchuk used his experience gaining fame through social media to write books about business. Representatives for various brands read the books and began asking him for advice. Sensing an opportunity, in 2009 he and his brother A.J. founded VaynerMedia, a brand consulting agency. It focused specifically on strategies for using social media for promotion, unlike most media agencies.
The brothers’ goal was to build the strongest marketing machine of all time. It advised clients to shift much of their marketing budgets to the social world. Its success enabled it to garner a number of Fortune 500 clients, and amass an employee base in the hundreds. In 2011, Vaynerchuk decided to leave his daily “Wine Library TV” duties behind and focus on his work at VaynerMedia full-time.
Business model of VaynerMedia
VaynerMedia has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms of all industries and sizes.
VaynerMedia offers four primary value propositions: convenience, accessibility, performance, and brand/status.
The company offers convenience by making operations simpler for clients. It provides a full-service solution that advises clients on everything from content creation to production to publishing to analytics. It conducts a top-to-bottom evaluation of all of a client’s social channels, an evaluation that addresses customers’ true preferences, competitors’ statuses, and areas of opportunity.
The company creates accessibility by making it easy for clients to work with prominent social platforms. It works hard to develop and maintain close relationships with sites such as Facebook Twitter, and YouTube, which enables it to optimize every new update that is rolled out.
The company has demonstrated strong performance through tangible results for its clients. For example, it worked with Twitter to build tailored tools to increase positive conversation around the campaign of one of its customers, Dove. The effort resulted in a 25% decrease in negative tweets.
The company has established a strong brand due to its success. It maintains offices in Los Angeles, New York, San Francisco, and Chattanooga, and has over 450 employees. It works with 90 brands, ranging from sports teams to consumer packaged goods firms to TV networks. These include many Fortune 500 companies such as PepsiCo, General Electric, Anheuser-Busch, JP Morgan Chase, and Mondelez. Lastly, it has won a number of honors, including a Shorty Award for Best Large Agency (2014), Webby Awards for Best Use of Native Advertising and Best Use of Video, and recognition as one of Advertising Age’s Agencies to Watch, Agency Standouts, and A-List Agencies.
VaynerMedia’s main channels are its website and its business development team. The company promotes its offering through its social media pages and participation in conferences.
VaynerMedia’s customer relationship is primarily of a dedicated personal assistance nature. The company works closely with clients to design and implement strategy.
VaynerMedia’s business model entails designing and developing services for its clients.
VaynerMedia forms strategic alliances with other media companies in order to enhance offerings for its clients. For example, it acts as an Ads Partner and Creative Partner for Snapchat, helping brands drive business results on the app through paid distribution and creating content for its ad products.
VaynerMedia’s main resources are its human resources, who include everyone from the creative professionals such as writers and art directors that design its content, to the technology professionals that shepherd digital production. It also has a full-fledged photo studio.
VaynerMedia has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent enhancements.
Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.
VaynerMedia has one revenue stream: fees it charges for its various services. They fall into the following categories:
- Retainer fees (time-based pricing)
- Campaign fees (campaign-based pricing)
- Media fees (based on a percentage of media spent on digital channels)