Channel Factory: facing the new era of advertising
By Angela Bao
May 31, 2021
(Left): Tony Chen, Founder and CEO of Channel Factory. (Right): The Channel Factory team
Channel Factory CEO and Founder Tony Chen talks about the importance of conscious advertising and being an AAPI entrepreneur.
It all started with one goal: to become famous. As a classical piano specialist at Rice University, Tony Chen wanted to take advantage of YouTube as a platform to showcase his musical talents – the question was how to get the views?
He tried buying YouTube ads before deciding to start his business, which first started jingles for other people.
“Basically, no one has ever bought one of these jingles,” Chen laughs. “But part of the package was that I would guarantee views on those jingles, and people were like, ‘Hey, we don’t like your jingles, but we would love to have views on our YouTube videos, let’s just buy them for me.’ So that was essentially the start of the business. Thus, Channel Factory (then known as YTM) was born.
Adapt to a changing advertising landscape
Channel Factory, a client from the eastern West Bank, found success early on. Chen was able to drop out of school at age 21 to pursue his business full-time, which now includes companies like Apple and MasterCard. However, the real difficulty lay in meeting people’s real-time needs.
“The challenge is simply to always refine [and] be nimble enough to understand what people are really looking for, ”Chen says. And where Chen saw the opportunity was to help advertisers navigate the increasingly crowded social media space, where more than 58% of the world’s population are active users.
When companies started advertising in the digital sphere, especially on video platforms like YouTube, it was purely a numbers game. “It was so new… people are like, ‘I wanna get a million views, I wanna get a billion views,'” Chen shares. “Then in 2013-2014, programmatic advertising, [which] basically allows what is called audience targeting, has become extremely popular – and this has essentially caused people to stop caring or they advertised for a few years. ”
Then, ads for big brands like McDonald’s and Honda started appearing on content related to terrorism and white supremacy. While digital automation got a lot more attention to the ads from these companies, it didn’t filter out where those ads were appearing.
What businesses should be focusing on – and where Channel Factory can help – is conscious advertising. According to a survey by Channel Factory, 69% of consumers would prefer to buy from socially conscious brands, and 68% of consumers also want brands that are committed to making online spaces safer and more inclusive. As a result, brand fit, contextual targeting, and brand safety are now at the forefront of conversations.
The three principles of conscious advertising
“Consumers are pushing and dictating both media and brands to be much more socially responsible,” says Chen. “Consumers now have a much larger voice in what they want the media and advertisers to do.”
There are three aspects of mindful advertising that help address these concerns:
- Association of brands: It goes back to brand fit, where you need to make sure your content partnerships and where your business advertises is right for your brand, Chen says.
- Inclusiveness and diversity: With racial inequality at the center of social conversations, businesses need to be aware of working with minority content creators and / or minority-owned businesses.
- Value-driven content: Instead of aligning with content that can have a negative impact, Chen says it’s important for businesses to find creators who create value-driven content that actually teaches consumers something.
To help businesses evolve their content ecosystems to incorporate these three aspects of conscious advertising, Channel Factory launched The Conscious Project to help the advertising industry become more inclusive.
Chen’s goal is to get businesses to not only be more inclusive of both age groups and minority groups, but also to make the online sphere a more positive space by highlighting content. value driven. “We’re really creating this pillar of positivity to help educate advertisers,” he explains.
Channel Factory also wants to use The Conscious Project to educate advertisers about the digital space and social media. “We [want to help] advertisers are changing their view of online advertising, ”says Chen. “Because most people have a blacklist [where] they basically remove any content associated with certain keywords – and many of those keyword lists are very large, so we help educate customers [that] this is how you can be much more inclusive as well. ”
Building a business as an Asian entrepreneur
Chen certainly had to overcome some challenges as a young Asian American entrepreneur. He moved to the United States at the age of 9 and built Channel Factory while still in college, with few connections in the ad space.
Channel Factory Team Liaison Event
“Just being an immigrant, starting a business 10 years ago in the advertising world, which is really relationship-oriented, was difficult,” he admits. “I didn’t really know anyone, didn’t have too many families here, so building relationships was definitely a challenge at first.” Fortunately, Chen was able to find the right mentors who helped him on the entrepreneurial path and put him in touch with the right people.
That being said, Chen hasn’t forgotten his roots. Although he lived in the United States for over two decades, his heritage plays an important role in his life and business.
“I think our culture is pretty great, especially around family values and empathy for helping others,” Chen says. “I think that’s a big part of the way the AAPI community and families welcome their children. It’s something I think I’m most proud of, and we’ve been able to build that into our business as well – we treat our people like they’re family, and we really care about the people on our team.