$6.5M in Ad Revenue with <2M Social Followers

(8 min read) Rishi Jethi on the volatility of Facebook, reinvesting in video, and outsourcing to India

Rishi Jethi - Illumeably

Facebook, it's kind of like the wild wild west.

Some months could be the best ever, and the next month could be your worst.

Rishi Jethi’s Illumeably is a viral machine - or, more precisely, a collection of viral machines - that brings in $6.5M in annual revenue.

Illumeably - whose mission is to spread positivity - has a team, tactics, and tools that span four continents, dozens of people, and quite a few companies.

Let’s get into it!

Links

The Business

Breakdown

Observations

Rishi’s path as a Creator has been something of a rollercoaster.

He started making videos on Facebook in 2017, got millions of views, but didn’t make any money. At the time, Facebook video wasn’t monetized.

To top that off, Facebook ended up decimated by fallout from the 2016 election scandal.

Reach kind of went away overnight, so our business was in a really weird position. We had to pivot really quickly.

He pivoted to launch his website, Illumeably.com, with listicles and other viral formats built off search-friendly topics and monetized through display ads.

It grew independently, with very little cross-promotion, and its content - pop news a la Buzzfeed - is still very different than the scripted morality tales found on his Facebook and YouTube pages today.

Right now, our audience is completely different on our website compared to our videos. There's no bridge between the two at the moment.

The videos are meant to be grown organically on all platforms outside of our website…and now, a lot of the [website] traffic comes from Google search.

Today, the website business is close to autopilot.

Luckily, a lot of that part of the business I've been able to offload to a team that I made in India.

So, my day-to-day operations when, it comes to working on the website…it's now maybe 2 to 3 hours a day.

The website generates $5M a year at 20% margin; that $4M / 80% cost, though, is what enables Rishi to focus and reinvest the remaining $1M / 20% profit on his real passion: video storytelling.

Today, he generates $1.5M in video ad revenue between Facebook and YouTube, and is about to launch on Snap.

Despite making seven figures in profit, he only just moved his video production operation out of his parents’ house. That’s discipline.

This business would not have been viable without the ability to operate from my parents' house practically every day…

Now, as things gradually return to normal, having a structured, legitimate office space makes sense.

Everyone comes in every day without the necessity of interacting with my parents all the time.

He sees reinvesting his profits into his video business as the right move, not only because it’s his passion, but because video is now his fastest-growing revenue stream.

Our website business…we've kind of capped out in terms of the audience we can reach with that.

…when it comes to our video business, it's still a much smaller part of the pie, but it's the fastest growing part.

I think in one or two years, it's going to outgrow the website business by at least fivefold.

Facebook is his number one revenue source for video, but is highly volatile.

YouTube is more stable, but less lucrative.

As a result, Rishi and his team have to be very comfortable sitting in uncertainty.

With a lot of the layoffs and restructuring of teams at Facebook, it's kind of hard to see where the future of the product is going.

Obviously, it's a huge, substantial source of our revenue, so it's a no-brainer to keep posting there and keeping it as our number one source.

We just can never expect how we're going to do in a given month.

Execs take note - Creators pay attention to layoffs, and make business decisions about how to use Creator products based on the uncertainty those layoffs create.

As a result, of the volatility from their biggest, fastest growth video revenue source, Rishi and the team are investing in growing their footprint in three ways:

1) They’re planning on growing their distribution footprint by expanding to Snap.

We can pitch unlimited concepts, so I'm pretty confident that we can get at least one type of show….

2) They’re growing their monetization footprint by exploring other revenue opportunities, like brand deals and merch.

On brand deals:

I've been super selective. We've gotten offers from companies…I didn't want to spoil the image that we have on all these platforms, where people might think, "Oh, they sold out."

I'm kind of just waiting for the right deal, the right company to come in. I have some ideas for companies that I would want to work with.

On merch:

There's a lot of services that promise to white label your merchandise, and we've tested a few of them out.

We saw how the clothes were after washing them once, and they were completely messed up afterwards…

So, I thought, if we're going to do this, I want to do it completely right.

This has always been my biggest gripe with on-demand merch providers - the product is garbage. Seems like an opportunity….

3) They’re growing their content footprint by expanding to other languages as well as animation.

On languages:

We're going into different languages, dubbing into Hindi, Spanish, all that stuff, just to give us more stability on a month to month basis…

On animation:

We're going to start doing cartoon content, which I think will do really well for kids especially…and, I mean, everyone loves cartoons.

I still love watching cartoons.

Another Newsletter I Like:

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The Stack

Website - Wordpress

Hosting - Digital Ocean

Revenue Attribution -Google Analytics + Assertive Yield

Content Distribution Network - Cloudfront

Ad Networks - Google, Index Exchange, PubMatic, Rubicon / Magnite, Xandr

Dashboard - Built in-house, pulls the API from these services together

Rishi runs Illumeably.com like a relatively sophisticated digital media company. He has an engineering team in India, but less technical Creators can still garner lessons from his approach:

  • Revenue attribution + Content optimization

We optimize a bit because we want to know which article made the money…

We want those types of insights, so we know what type of content we should be creating more of, what our audience likes the most, and what's leading to actual dollars at the end of the day.

Most Creators probably aren’t going to hire a tech team to leverage big data, but the takeaway here is that - even with the data in the backend of YouTube, Snap, etc. - you can make strategic decisions based on how each piece of content is performing.

Figure out the patterns in what’s making you money and do more of it.

Figure out what is bringing your content’s earnings down and do less of it.

  • Ad optimization

We work with all those [ad networks] all at once, and they're bidding for ad placements simultaneously.

…Sometimes we don't know how much money we're supposed to make until we get the invoice later, but, we'd rather know now as opposed to finding out sixty or ninety days later.

It's essential for tasks like paying your team and doing payroll…having that sense of, "Okay, I can expand this team...”

So, we don't have to just base decisions off of approximations. We kind of just know in real time how much money we're making every single day.

Rishi has the Jeff Bezos / MrBeast mentality - ride the line and reinvest every dollar for maximum growth.

Paying attention to how each piece of content is doing and planning accordingly, while complicated, could meaningfully reduce the risk around that approach.

Email - N/A

I really want to get into the email space. We have a huge newsletter list that we've built just from visitors that go on our site, but we don't do regular email blasts or anything, which I think is a huge missed opportunity.

Membership - N/A

Unless we're making content that could be more exclusive, like for a paywall, it doesn't quite make sense….right now, I don't feel like putting a paywall for stuff that people can already get for free on our YouTube and Facebook.

Project Management - ClickUp (India) + Monday.com (US) + Skype + Slack

We got a good deal from ClickUp, essentially through being based in India.

Clever…since many companies price differently depending on market, he had his Indian website partner contract with them to get the lower price.

Probably not something every Creator can do, but a great trick if you can.

Representation - N/A

Now that Rishi is more open to brand deals, he’s more interested in finding a rep who can bring the right partners. Know anyone?

Video Production - US Team

Video Distribution - Rishi himself

The uploading part is something I handle myself due to trust issues. Sometimes, a video may need around 10 to 12 different cuts…Once I finally approve a version, I'm like, okay, I can upload this.

This is how you know Rishi is a true Creator and not just a media entrepreneur.

He has final cut and pushes every video live himself.

Website Content - Idea Clan (based in India)

  • They manage the website

  • He serves as Product Manager

  • They also hire and run the Content team, with his oversight

Animation Content - Confidential Indian animation house

He doesn’t want anyone swooping his partner 😁 

Operations - International Team

Rishi is running a truly global Creator operation.

  • India - Website

  • US team - Video

    • Producer

    • 2 Videographers

    • 1 Audio person

    • 1 Director

    • 2 PAs

    • 1 Editor

    • Acting pool of 150 people with 5-10 consistently in videos

  • Brazil - Thumbnail Designer

  • Ukraine - Composer

Credit Cards - AmEx Gold

Payments - Meelio

We switched to it recently because we got kicked off from this platform called Veem…they stopped supporting the arts and entertainment industry, and didn't want any transactions in that space on their platform anymore.

So we had to search for a new solution, because going back to Venmo or Apple Pay was too messy.

Banking - Switching from Wells Fargo to Mercury

Wire transfer fees are extremely low for Mercury, which is a meaningful cost given the global nature of his business.

Accounting - Quickbooks

Rishi used to do his own books but now has a CPA.

Editing - Premiere Pro

Design - Photoshop

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