It’s 90 degrees in Los Angeles and Dennis Hegstad is wearing all-black.
Black Zara faux leather pants, black Vans, black Ray Ban sunglasses. The oppressive October sun beats down as Hegstad sips from a bottle of kombucha outside a coffee shop. Tilting his head to avoid the glare, wispy long blond locks fall into his eyes as he scrolls through his porcelain iPhone.
Cycling through multiple personas on more than a dozen Twitter profiles, his thumbs are set on rapid-fire: favorite, follow, post, respond, retweet, repeat. Finally, Hegstad looks up, the 25-year-old’s cobalt eyes trained directly on me.
Excuse his wandering attention: He’s not just tweeting for fun; he’s tweeting for big money–and he’s winning.
Hegstad is the co-founder and CEO of Exposely, a year-old social publisher connecting brands with influencers. The term influencer is fast becoming one of the most overused buzzwords in online business, with firms popping up left and right. But Exposely and its fashion forward digital wizard are different. Beneath the runway exterior, and over $10,000 worth of tattoos under it, Hegstad is the human touch. In an industry known for personalities bigger on-screen than in real life, he’s consistent. And unlike most “experts” eager for a ride on the digital gravy train, Hegstad isn’t faking it. He started off as an influencer.
After hustling his way from unknown Internet kid to Myspace stardom in the mid-2000s, Hegstad parlayed his online acumen into a gig selling clothes on the Warped Tour. That exposure gave him major contacts, and the inside look at what both audiences and creators want. But Hegstad never craved the spotlight. Instead he’s more comfortable pulling the strings and connecting other players. Now with Exposely, he’s supplying both sides.
This type of marketing is all about brands paying to get access to online powerhouses, and their valuable followings–and they’re willing to pay. In Hegstad’s model, clients are charged a fee for services that include affiliate marketing, lead generation, and content distribution. In other words, getting the goods in front of the right kind of eyeballs. Campaigns run as high as six figures. Seventy percent of sales go to Exposely’s influencers.
Customers include AOL and Universal’s Lava Records, companies hungry to connect with talent like YouTuber Kingsley, Red Foo from LMFAO, or Twitter’s Tweet Like A Girl, a roster offering the reach of more than 300 million social followers across Twitter, Tumblr, Instagram, YouTube, and Pinterest.
“I know a lot of people who are turned off to social because they think of it like it’s a vanity number,” he told me. “We’re focused on pay-per-performance campaigns. We’re not pissing away brand money to drive visibility and impressions, we’re looking to drive engagement, sales, and brand value.”
Hegstad recently helped amplify the release of rapper Maejor Ali’s single on Twitter: 130 million impressions to the hashtag #meandmyteam, which debuted at No. 1 on Billboard’s social charts, and funneled 25,000 Tumblr clicks to Tenslife, an overachieving crowdfunded sunglasses project.
“It’s not just about driving views,” he insists. “It’s about what’s the next step: e-mail signups, a download to your app, an install, conversions to your landing page. We’re performance based.”
After launching with $50,000 of his own savings, the company is now profitable, generating more than $1.5 million in revenue. There are some 2,250 creators–or influencers, if you will–on the network, and it’s poised to move into new territory on Vine and Pinterest. And with minimal overhead–his downtown loft doubles as his office–and only five team members, including his two roommates–it’s a good bet those numbers will climb. To do that, Hegstad plans to fundraise and scale out the business. He also wants to simplify Exposely, white-labeling the platform with a self-serve approach so you don’t have to have deep pockets to use it.
“Any brand that wants to spend at least $100 can login and choose a campaign,” he explains. “That means pay-per-click, install or conversion, pixel tracking to plug into any e-commerce store to get commission for any products, plus installs from apps.”
If he sounds a bit jargony, that’s because he comes from heavy tech stock: his uncle is the current president of Dell. At seven, Hegstad was already taking apart and building computers. At 12, he was a sponsored, professional video gamer, destroying competition in Counter-Strike. When he entered his teens and started noticing girls, he put down the joystick and discovered Myspace. That’s when everything changed.
Hegstad admits he’s not really sure how he developed such a swift following on Myspace. Posting selfies years before the word made it into the Oxford Dictionary, interacting back and forth with users, somehow after two years he had over 70,000 friends and 3 million profile views. And he quickly understood the power of his reach.
“I could use these views to garner sales,” he remembers. “I started to post bulletins for bands and companies that wanted promotion. Bands started hitting me up, asking if I’d play or post their music because I had such a big following. Then I thought maybe I could make money doing this myself. Why don’t I post about something that I own?”
At 18, he decided to start a T-shirt company called Revert Fashion. He didn’t invest any money or buy any product. Instead he put together a “mockup of a T-shirt, a simple web store, and used social media to generate pre-orders. The first day I sold 72 T-shirts, with zero dollars up front, just with a Photoshop mockup file. That was $1,400 in sales, the first day. I knew this is something I could keep doing.”
To help boost fan interest and sales, Hegstad would video chat via Stickcam, Livestream, and Ustream, an offering that resembled an after-school hangout more than QVC. But it was working. And soon it was time to scale.
In 2008, Hegstad was living in Austin, Texas. And it was at Austin’s South by Southwest festival that Hegstad met some of the bands he was already communicating with on Myspace.
“They wanted me to promote their music on my Internet show, which was me dicking around on webcam, interacting with ‘fans,’ who are just people, really.” In return, bands like Sleeping With Sirens, and Breathe Carolina, would wear Hegstad’s gear onstage, “which helped grow my brand exponentially.”
By this point he was 19, and Hegstad was invited onto the Warped Tour where he met dozens of acts, and really started cleaning up with Revert. He sold $50,000 worth of shirts in two months on tour, $150,000 in total the first year. Then he took a year off from the road, enrolling in community college back in Texas. But with his marketing teacher paying Hegstad to teach him social media, he realized he was already onto something beyond the classroom fundamentals. He dropped out and went back on tour, this time adding watches to the arsenal. The profit margins were even bigger. Manufactured in China for $2, and then hawked for $20, Hegstad peddled 3,000 units for $30,000 in profits.
Hegstad knew he had a hit on his hands, but that meant he had to be the face of the brand. After two years, and traveling to 47 states, he’d had enough. Yes, he made hundreds of thousands of dollars, and met some of the biggest names in alternative music, but he didn’t want the spotlight.
“I was more excited about building the website and the analytics than driving sales. I realized I could do this with many brands, and be the puppet master so to speak, behind all of these companies.”
In 2011, Hegstad moved to L.A. and fell back in love with his old flame: technology. He started tinkering on YesPix, which he describes as “a YouTube partnership program for pictures, modeled after Twitpic.” Then Instagram and WhoSay launched, and “we realized we had just missed the boat.” He shelved the idea, then took a digital marketing job at Velvet Hammer, a music management company that reps big names like the Deftones and Cypress Hill. But Hegstad the push of the entrepreneurial winds, and while he kept building out his entertainment contacts at his day job, he also began building out the site that would become Exposely.
No one knows what’s coming next in social. Sites come and go like zits on a teen. For every Ello outbreak, there are spaces as clear as App.net, or empty as the now-defunct Google Buzz.
There’s no guarantee Facebook and Twitter will be here in 10 years, even though these platforms seem so ingrained in our culture and economy. One thing that will remain constant: deep-pocketed brands and a population hungry for sharable, aspirational media. Which means big advertising isn’t going anywhere. And based on the hundreds of billions of dollars funneled online, the influencer marketing play that people like Hegstad are pumping seems to be the closest thing to a sure tech bet there is. Things will change, and it’s still a bit of a free-for-all disclosure wise (despite the FTC mandating transparency of sponsored content), but the model works, and it’ll eventually be further refined and regulated.
The trick to longevity is to make consumers feel special, says Rami Perlman, the vice president of talent and influencers at theAudience, a social media publisher based in Los Angeles. Perlman, and his business partner, theAudience CEO Oliver Luckett, have been pioneering that philosophy for years.
In 2010, after their company DigiSynd was acquired by Disney, they persuaded their new bosses to use an electronic music artist to create an official remix for the film Toy Story 3, and sell tickets on Facebook. It might seem like a no-brainer now, but Perlman says it wasn’t easy to convince Disney’s suits. But when the video racked up nearly 4 million views, they were convinced. Influencer marketing had taken its first baby steps.
Perlman says theAudience has worked with Hegstad on a few limited campaigns on activation for app launches; but he won’t go into specifics. He did say those campaigns were successful, and he would work again with Hegstad.
“He’s one of the smarter people out there that I talk to,” Perlman says. “He knows it’s not just how you message that matters. It’s connecting with fans and making them feel special. Good marketing does that. It makes perfect sense for him to come out of the trenches, based on the experience from his past life, getting brand dollars.”
“He talks like a young Zuckerberg,” notes Taylor Nikolai, the owner of more than 4 million Twitter followers on about 20 parody accounts. Since the influencer community is so small, he tells me, especially on Twitter, most of the major power players communicate and critique each other. Nikolai says that when he talks to Hegstad, he feels like he’s trying to keep up. “His brain’s thinking a mile a minute.”
But he also claims their businesses vary greatly. Nikolai prefers working directly with brands over affiliate marketing. Hegstad is banking on both, and it’s that monetization angle that’s making his clients, and the influencers he contracts win right now.
“The Internet is becoming like real estate–if you don’t have that billboard on Sunset Boulevard, or on that huge influencer’s account, someone else is going to,” Hegstad says. “That’s why brands buy them.”
Nikolai says the key to social is making people happy. He’s right, but only halfway. You do have to make people happy. But if it’s your business, you also have to be able to make money off them, without fans feeling like they’re being taken advantage of. That’s the razor’s edge people like Hegstad navigate. And to hear him tell it, he doesn’t just see dollar signs with this reach, he sees potential to sway opinion, and even to move legislature and politics. “It’s all about aligning the people with causes,” Hegstad says. “We want to be a balance of performance marketing with a brand integration platform. A multi-channel network for social.”
“The game is changing right now,” Perlman says. “This is the new rock star. Whoever understands fans the best, wins.”