It’s no secret that I admire Gary Vaynerchuk (“GaryVee.”)
As an entrepreneur, he’s a mentor to many. As a leading voice for social media’s disruption of the traditional media and entertainment industries, his resume is impeccable.
Simply put, he preaches the entrepreneurial gospel of “hustle” – that anyone can succeed if they simply put in the time to establish themselves on the new social media channels, outworking the competition through multi-channel content distribution.
And as an evangelist, this works because he practices what he preaches.
The man started doing daily long-form YouTube videos to promote his family’s wine business back in 2006, ultimately publishing more than 1,000 of them.
And he did it all in his off-hours, while working full-time at the business.
And yet, I was surprised and shocked to see his announcement – via a video and blog post earlier this month, that VaynerMedia was offering a new product called VaynerTalent.
VaynerTalent’s essentially a complete personal branding social media package for “emerging talent.”
VaynerTalent is a solid idea – it’s essentially outsourced social media management for personalities.
He also gets points for providing a clear roadmap for anyone to follow to leverage their content for greater social media fame.
My skepticism, however, concerns its price.
According to GarVee’s blog post and pitch deck, each month clients of VaynerTalent would receive:
- 1 weekly piece of “pillar content” (think 30 minute video or podcast)
- 1 weekly blog post (to be drafted largely from the repurposed video or audio interview)
- 10 weekly photo-heavy pieces of content to be distributed among social media channels including Facebook video, Facebook, Twitter, and Instagram.
Now, as there are a bit more than 4 weeks per month, that works out to a monthly deliverable list of:
- 4 videos or podcasts
- 4 pieces of long-form blog content (for distribution to blogs, LinkedIn Pulse, Medium, etc.)
- 40 image/video pieces of social media content (for distribution to Facebook, Twitter, Instagram, SnapChat, etc.)
The price: $25,000.
While I’m a huge fan of building a brand’s (or personal brand’s) digital presence over multiple social media channels, I also happen to work in public relations firm that, in part, provides robust social media and video content to clients.
Further, I’ve worked on multiple Fortune 100 PR accounts with retainers in the range of $40,000 per month, so I know the level of service expected for that money.
And there’s no way that VaynerTalent’s deliverable list warrants a $25,000 per month retainer.
Just to be sure, I called a friend of mine, who is a professional social media manager. (One of her clients? NASA.)
She laughed out loud at the price.
Appropriate Pricing – 2 Examples
Example 1: Cost Accounting
Maximum market pricing for professional social media management runs about $500 per platform, per month.
You want a pro to run your Twitter, LinkedIn, Facebook, and Instagram? That’ll be $2,000. Let’s throw in another $500 for the purchase of stock photos and some photoshop / Canva manipulation. Hell – call it an extra $1,000.
That’s $3,000 a month total.
Next: Weekly long-form content.
Let’s call this a 1,000-1,200 word blog, with a few images. Max cost? $250 per post. $250 x 4 is $1,000 a month.
Given that much of this written blog would be essentially a re-purposed transcription of the video/audio pillar content, hard staff costs would likely be lower.
But let’s be generous and say, instead, that the blog posts cost a writing professional ~5 hours to produce at a billable rate of $200 an hour. That’s $1,000 per post, or
$4,000 for the month.
Finally, we have video.
Admittedly, quality video production is both the most expensive part of a social media program and the hardest to do well.
My employer, Dale Curtis Communications, is based in Washington, DC (an expensive city) and we can still provide customers with quality, fully-produced videos (with music) for ~$2,500 each.
So 4 videos should cost a maximum of $10,000.
$3,000 for 40 social media posts plus $4,000 for 4 blog posts plus $10,000 for 4 videos comes to:
And that would be the retail, a la carte price for those services.
The reality is there would be significant synergies involved, particularly as the Facebook posts would be short video clips from the longer videos, the blogs would be largely transcribed narrative pieces from the videos, etc.
And, within a few months, the client team would have a good understanding of the client, their key messages and their voice.
Thus, the social media team’s job would get easier, bringing internal costs down even more.
Example 2: Talent Hires
Another way to staff an account like this is to think in terms of staff costs.
Let’s assume that social media management, video production, and writing are different enough skillsets (which they are) that each would be handled separately.
So a client team would likely include four people:
- A full-time social media specialist ($4,000 a month/$48,000 a year)
- A full-time writer ($5,000 a month/$60,000 a year)
- A full-time videographer ($5,800 a month / $70,000 a year)
- A part-time project manager (to liaise with the client and ensure editorial consistency) ($3,000 a month / $36,000 a year – for 1/3 of their time)
That’s $4,000 + $5,000 + $5,800 + $3,000 = $17,800 per month.
Note that, these costs are for a full-time videographer, writer, and social media specialist on staff. Thus, each of their relative outputs should be far far higher than what is listed.
The reality is that each of those positions would only be utilized for a maximum of 30% of their time (so reduce the costs accordingly) but then add back in the additional hidden costs to their salaries in the form of health insurance, Social Security withholding, etc.
So the actual staff cost to produce the deliverable listed would be closer to $7,000 per month. This means the reasonable retail rate should be in the range of $12,000-$15,000 monthly. $18,000 retail is an absolute maximum.
The Brand Premium
Both my friend and I, who work in the expensive PR market of Washington, DC, agreed:
Even at the worst pricing structure possible, such a robust social media branding package shouldn’t exceed $18,000 per month (which covers staff costs, overhead, and mark-up for profit margins).
So where’s the $25,000 come from?
The easy answer is that the $7,000 per month premium is the brand premium, the Halo effect of working with Gary Vaynerchuk himself.
One definition of “branding” is the difference a customer is willing to pay over a generic brand – essentially why you’ll pay more for a can of Coca-Cola over a can of generic soda.
GaryVee has extensive talent resources (with his 700-person firm) and a long roster of large corporate clients (including Coca-Cola and others).
He’s such a celebrity name, that many might be willing to work with him even at above-market rates.
As the old saying goes, “Nobody ever got fired for hiring IBM.”
Another answer is that, in piloting this program, GaryVee is looking only for truly name-brand talent – those who are wealthy enough to pay VaynerMedia afford $300,000 a year for digital brand management.
So we’re looking at a very narrow niche, likely comprised of CEOs, athletes, actors, and musicians who have incomes of $1.3 million a year or more.
Looked at this way, these early adopters can serve as the celebrity success case studies and endorsers for VaynerTalent when, a year hence, the price drops to a far more reasonable $12,000-$15,000 per month.
See also: Tesla – whose marketing game plan boiled down to:
“Establish your car brand as the environmentally-conscious and cool luxury sedan of choice for the one percent before eventually releasing a far more reasonably priced $60,000 version.”
VaynerTalent may very well succeed at the given price point and positioning.
Given GaryVee’s long record of success, to bet against him is to root for the underdog.
If nothing else, his publicly announcing the pricing and deliverables was a bold move – a shot across the bow of VaynerMedia’s entrance into this market segment.
If his goal with such pricing was to provoke and elicit emotional responses, he clearly succeeded.
Perhaps that was his true goal all along – advertising by way of provocation.
In that way, I fell for it hook line and sinker, as I felt compelled to draft more than 1,200 words about his new venture.
Free advertising through provocation.
And that, my friends, is marketing savvy at its best.