This post is basically an ad. If an ad is a thing you write saying why you like something, when you didn’t get paid to write it. In fact, you paid them to be a part of it — as in you invested. So I guess, technically, it’s not an ad. Is it journalism? No. I am not a journalist. But it is honest, and true, and an expression of my feelings and why I love this company. Take this as a disclaimer that I am very, very biased towards DoStuff Media. This article aims to explain why.
You’ve probably not heard of DoStuff. If you live in Austin, you’ll know them as Do512. If you live in Chicago, you’ll know them as Do312. And now, if you live in New York, Los Angeles, San Francisco, Boston, Seattle, Nashville, Indianapolis, St. Louis, or Mexico City, they have arrived in your town, and you should check ‘em out. If you live in another city, look out for them. They are growing fast.
DoStuff exists in each city for one reason: to help those who want to go out and have a good time find the best things to do.
My love of DoStuff comes down to three things:
- DoStuff is the easiest way to find out what’s going on in your town, and helps me find the rock.
- DoStuff gives brands something new that they’ve been craving.
- DoStuff is a great business in which I am psyched to invest.
I’m going delve into each of these reasons. And I’m not gonna lie. This is long. I suppose that’s partly because I’m so excited. But it’s also because I’ve been wanting to lay out everything I love about them for a while. Companies in quiet growth mode are always fun, but eventually I want to be able to tell people why I’m into an investment, and that time has come at last for DoStuff. Now I can just point people here!
Part 1: DoStuff helps me find the rock.
I love rock shows. I love going to rock shows. I haven’t seen 400 bands in a year since 2010 or so, but I still see a hundred or so every year.
I love the internet, too.
It’s always kind of confused me why the internet has not been more helpful to me in finding rock shows.
There is SonicLiving, SongKick (primarily in the UK) and BandsInTown, of course. But they always seem to be telling me David Bowie is playing at the local club down the street when it’s just a cover band. They also conveniently forget to tell me about half of the shows that really matter to me. The problem is clear with them — they are automated. They’re done by scraping, by algorithms, by machines. This, on paper, sounds great, but so far, I’ve found that in reality, they don’t quite work.
All of them have great social features — this is a must in any concert-going app, of course. But how good are those when the listings aren’t right? It’s the listings that matter first.
Now, there is an option to get accurate event listings on the web, but it’s a laborious one. You could go to every website of every night club, every couple weeks, and check and see if anyone good is playing. This is what I do now, but I miss things all the time — new venues spring up that I am not thinking of checking, and it seems kind of silly that in the year 2014 I can’t get some sort of alert from them when someone I like is playing.
The most upsetting thing about this whole thing is that this wasn’t a problem before the internet. I lived in Boston, so all I did was pick up a copy of the Boston Phoenix every week, flip to the back of the paper, and boom. There you go. All the listings for all the bands. God, I miss that.
The reason why DoStuff works for the user is because they faced head on the uncomfortable truth that other listings sites on the web want to ignore: you need feet on the ground.
The reason your local alt weekly was so much better than SongKick (and made tons of money for decades) was because they had a true local presence. They knew the community. And you need to be part of the community to make this work. You need to be there. You need real people telling other real people what is going on, what’s cool, and what they will like.
These real people are the only way you’re ever going to get that close-knit effect that allows you to do promotions and specials that matter: ticket giveaways and free shows (sponsored by brands!)
The reason this works for the user — and for DoStuff — is because DoStuff’s local properties in each city are a partnership with one of the city’s most important and active folks in that live music scene.
And what a list of participants it is: the owners of The Bowery Presents and Brooklyn Bowl in New York, The Echo in LA, Lollapalooza in Chicago, and the famed Noise Pop fest in San Francisco, to name a few. Plus the legendary Don Law in my beloved Boston, festivals like Bonnaroo, Governor’s Ball, and New Orleans Jazz Fest, and seminal music sites like KCRW, Brooklyn Vegan, and Okay Player. Damn.
Part 2: DoStuff gives Brands something new that they’ve been craving.
Let’s face it: Local activation at scale is hard. Walking around SXSW the other week, I had a ball looking at the “brand activations.” They really are pretty funny, aren’t they? What is it about them? I used to do a fair amount of marketing at SXSW for my old agency, The Barbarian Group (I’m particularly proud of the GE Carousolar we did a couple years back). These days, we don’t just see internet agencies and tech companies marketing to other nerds at SXSW: we see brands.
Most of these, of course, fall short. But some of them work, I suppose, are pretty good. But the whole strategy is kind of odd. A brand shows up at SXSW, because we’re supposed to be influencers. And we, the SXSW attendees, have lots of Twitter and Instagram followers, and we’ll talk about what cool thing that brand is doing, hopefully. And then other people, who follow us, will see it, too. Earned media! Brand activation!
This, in the past few years, made a lot of sense. These days, I’m kind of wondering one thing: is it really a logical proposition that all the influencers in social media are at SXSW? It used to be the people with the most followers on Twitter were a bunch of nerds. Now? Not so much.
Aren’t there influencers in every city?
Of course there are. Brands know this. But they come to SXSW for two reasons: on-the-ground, experiential marketing is expensive. And budgets are limited. SXSW is an easy place to hit a lot of “influencers.” There are other events, of course: rock festivals and sporting events and other trade shows. But boy, it gets expensive. Everything is custom. Everything is a one-off deal. Even if I take the thing on the road, it’s a massively complex, time-consuming, hella expensive endeavor.
Doing local requires genuine human connections. You can’t scale it using technology alone. You can spend immense amounts of money trying to replicate these human connections on the ground. And even then, that lack of a local spark — as we see with so many of these flat SXSW activations — will be a major obstacle for you.
Or, you can make it work with a partner like DoStuff. In the past, such an organization didn’t exist across multiple cities, so marketers were left with two bad options: work with a “product” company with no on-the-ground presence, or work with an array of local media properties across the country — a labor-intensive proposition, and one which loses any potential for any national economies of scale.
I first met the DoStuff guys in my Barbarian days. I was doing work for a client who needed a digital, social and local campaign. I partnered up with Lollapalooza to deliver, and I met a gentleman named Michael Feferman (aka “Fef”), who as Digital Director was my point man at Lolla. The campaign I bought from Lollapalooza was a giant success.
This is all well and good, but I wanted more. There was one problem: Lollapalooza was only in one city.
DoStuff grew out of Fef’s festival collaborations with Scott Owens, who had already co-founded Do512, now Austin’s most popular listings site. While working together on software for Lollapalooza and the Austin City Limits Music Festival, they saw an opportunity to take the Do512 concept national and provide something that brands have been looking for without success: combined local + national brand advertising in the digital age.
This is experiential, local engagement for brands at scale — a massive, untapped market.
Brands, naturally, love this. Especially brands that want to be on the ground around the country. Brands that want to connect locally and nationally. Brands that sell a brand, not a discount.
By having these partners on the ground, DoStuff is able to do three important things:
- By giving their audience the best, up-to-date and accurate listings, they can get people to come out to a show or event.
- They can offer discounts, specials, and free tickets, just like your old beloved college radio station.
- They can offer local advertising in-market and build a national ad network, allowing to achieve real local engagement at scale, both online and off.
The third reason above is why I am not just a fan and user of the service but also an investor. For me, they hit all the sweet spots: they have deep, on-the-ground access to offer great digital local advertising in major markets. They can combine this with unique, special events on the ground — they are not just delivering local from afar.
And remember: this isn’t just on-the-ground. It’s digital and physical. They can support local activations in multiple markets with digital local and national ad support. They can also provide localized content creation and influencer marketing in those multiple markets, and they can tie it all together for a brand into a single integrated campaign that gets executed in each market by people on the ground with long-term local relationships, knowledge, and audience — so that it actually works.
No one else can offer this. Not even close.
DoStuff solves two problems in my life: one as a user and one as a marketer. Turns out they are related.
Part 3: Why I’m psyched to invest in DoStuff
And what they offer in the local market is unique: it is brand advertising. It’s emotional, it’s about brand association and lifestyle, not just “buy now” or “20% off” or “try the fish.”
This is worth talking about. There is a difference between brand advertising and direct advertising.
If you know me at all, you’ll know that my career, both in advertising and in technology, has been spent looking at how advertising dollars are spent in America and trying to find opportunities that help advertisers more effectively move their advertising online. I’ve been particularly interested in “brand” advertising vs. “direct” advertising. Think “Just do it” vs. “buy now.”
I’ve extensively written about how even if we brought every last advertising dollar to the web, there will only be, at most, nine more Googles. And it’s my belief that until we offer better options for brand advertising — “Just do it” — there are giant pots of money that won’t come over to the web. This is what we tried to do at Barbarian Group: create compelling brand advertising on the web. And it’s what we were trying to do at Tumblr: offer brands a platform where they can communicate emotionally with their customers.
Google, of course, was an early tech darling not because it was the first company to bring over significant advertising dollars at scale — Yahoo! did this first with display advertising. But display advertising, despite claiming improved metrics over broadcast and print, primarily only worked as brand advertising. It acted more as a billboard (inspirational, emotional) rather than a coupon. Google upended this, allowed for perfect trackability and accountability, and in the process brought billions of dollars to web advertising.
The evidence, to me, that brand advertising is a giant opportunity on the web is in spending on television ads.
You’ll see that not only is television advertising not shrinking, but in fact it’s growing at quite a nice rate, and projected to continue to do so.
And brand advertising is not a small market. eMarketer estimates that brand advertising comprises a minimum of 27% of the ad budgets in the travel industry, and up to 63% in sectors such as CPG and Entertainment.
Ad money has been coming to the web, and is still coming to the web, but direct and brand dollars have been coming over at different rates, and there is much more brand money still in traditional media than on the web. Most brand money has still not moved over yet.
This is one factor that I look at when searching for compelling investments in the ad space, both as an angel investor and at Quotidian Ventures: opportunities for great brand advertising on the web.
The mythical “internet dollars” slide
Many of you, in your travels in the digital advertising world, will see this slide at one point or another. This version comes from Mary Meeker’s last internet trends deck:
The accompanying narrative to this deck usually implies that there is a great discrepancy in ad spending and media levels, and all money is coming to the web eventually. And yet, and yet, you’ll notice that most of this money is coming from print and radio and not television.
You see what I’m getting at? The reason money isn’t moving out of TV budgets is that marketers know how important brand advertising is. And yet somehow the same marketers keep looking at the web as merely a direct advertising platform.
Now, this isn’t entirely irrational. It’s because digital hasn’t provided great brand advertising opportunities yet. Direct? Sure. Google killed it. Brand? Um, well, we have display? Native advertising is attempting to provide some opportunities here, and there is much potential there.
But. Native can only work in certain situations.
Which brings us to local.
One hundred and thirty two billion dollars. That’s how much money is spent on local advertising in the US these days. $132 billion. Of that, so far, $25.7 billion, or just under twenty percent, is spent online.
To give you a sense of proportion, total spending on advertising in the United States in 2013 was $171 billion.
In short, local advertising comprises 77% of all ad dollars spent in the US.
Now, where is that money being spent in local? As we can see, 20% of all local ad money is being spent on the internet, but let’s look at the details:
The internet has, thus far, really only made a dent in newspapers. We all know this. Local advertising on the web — especially Google, & Craigslist — has hollowed out newspaper classifieds. Yelp! has done a great job bringing some of that money over to the web, and Foursquare (who I am invested in and love) is starting to make inroads as well. This is primarily coming from local newspaper and yellow pages.
But what I find interesting here is that we’ve made nary a dent in direct mail, cable, magazines, and out of home. This makes sense. It’s the bread and butter of local advertising.
So, then, where is the local brand advertising on the web?
Foursquare is making some progress at grabbing local brand dollars with some of the ads you receive at checkin, and it’s one of the reasons I love them. But that’s it.
To help think about this, I think it’s helpful to think about three things: local billboards, local television spots, and local non-classified, non-circular ads. Think of your college weekly paper. Think of all the ads in there for rock shows, local banks, cell phone companies (and, I suppose, escort services, but we’re not going for that here). Where has that gone?
Nowhere.
This is the real investment value in DoStuff. Massive local brand dollars are waiting to be moved to the web at scale. They’ve just had nowhere to go. Until now.
On top of all that, they’re everything you want in a tech investment: they have users (they’re just getting started but their registered users are already in the seven figures), they make real money (7 figures and two years of solid growth pre Series A!). From a financial perspective, they avoid the GroupOn hellhole that is thousands of local sellers. By partnering in joint ventures in each market with an established local presence, they have instant, deep access to the local market without trying to break in from outside, thousands of miles away.
In my travels in tech, I’ve found that few tech investors — even the great ones — have a firm handle on the holistic economics of the ad industry, local and national, online and off (my next book is about exactly this topic.) But I think this has been part of the reason that many of the investors in DoStuff thus far have come from the world of live rock promotion. They immediately grasp what’s been wrong with the previous offerings in event listings, and intuitively understand the local ad markets in which they operate, and what we’ve lost as we’ve lost print. What digital hasn’t replaced yet.
But the tech investors that have invested are exactly the ones that understand this space: Owen Van Natta’s Luminor Group, John Battelle, and Andrew Razeghi, along with the elite of their Austin hometown tech who know a great company when they see one: Bill Boebel (Quotidian’s co-investor in Moveline), Pat Matthews, Jim Eustace and Rony Kahan.
They do something useful for users and clients, they’re a great investment, but — best of all — they are really, really nice. Also, they live in Austin. Who doesn’t love that laid back Austin lifestyle?
Scott and Fef are two of my favorite people. I’ve been working with them for years now, both at C3 and at DoStuff. I’m proud to finally be telling the world about what they’re doing, and why I believe that DoStuff isn’t just another listings company. They still have a way to go, of course. They are constantly working to improve their product, and while their mobile web experience is great, they will serve their audience better once they’ve got a native app. And DoStuff is in 13 cities now but the network effects only grow stronger as each of those properties matures and as they add new cities to the mix.
But — all those are details. Right now, DoStuff has a product that its audience loves, uniquely valuable offerings for brands, and a business model that is to die for.
And they’re just getting started.
