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Video crowdsourcing platform Tongal has just raised an additional $5 million Series C Round from Insight Venture Partners. The site has now raised about $21 million in total, and CEO Rob Salvatore said he expects the startup to be profitable in the next several quarters. The capital infusion will be used to sell the platform to more brands.
Tongal works as a video submission contest and crowdsourcing hybrid website. Brands post their video needs to the site and solicit ideas, pitches and completed videos in a multi-stage, multi-party process. The platform keeps the pool of candidates and ideas large until the very end, allowing brands multiple options. Often different people or groups execute each step of the process. To keep participation strong, monetary rewards are given to the parties that can best execute each stage of the process.
Given modern advertising demands for speed and variety, “your old traditional agency model, call them linear creators, just can’t work,” said Salvatore. “Tongal is a distributed model that is faster, more cost effective.”
“We can get ideas from a very, very large subset of the community,” said Salvatore. "A lot of participants will get hundreds [of submissions]. The sponsors will push forward three or four ideas, not usually going in one direction.”
In fact, the idea creators often are not the same people who see a project through to completion. “There are idea creators that are filmmakers, but they are pretty distinct,” said Salvatore. “Only on a few occasions has someone submitted the winning idea and come through and made the winning video.”
Many times those submitting ideas are complete novices in the areas of advertising and video production. Their brand knowledge, however, provides a unique contribution into the creative process. “Tongal is not only tapping into a much larger base for creative ideas but we’re letting in people who use a product or have an affinity for it,” said Salvatore.
Coming up with a creative idea, “that’s a very different skill set than someone who has been a filmmaker for many years,” said Salvatore. “What were doing for those filmmakers is we are taking the burden to have to come up with the creative off of them.”
Tongal is a good example of how division of labor works within a knowledge-based economy. Division of labor is dictated by the size of a market; as the internet has grown the US advertising market — and made creative collaboration easier — it is now more efficient than ever to divide up the creative process. Similar to how car makers contract out different parts of automobile manufacturing, the internet now allows brands to do the same for video creation.
“The mission of the business is to bring the world’s creative work to the world’s creative talent,” said Salvatore. In the past such relationships were held rigidly between studios and advertisers, but “creative is abundant in the world and now through connectivity we can bring that to anyone.”
Tongal has so far worked with over 150 brands and has 50,000 members on its platform. The videos created via the website mostly are short-form advertising videos, but recently the company has been doing more longer form work including several documentaries and a fan fiction collaboration with Lions Gate Entertainment around the Twilight series. Now with $5 million in new capital look to see Tongal pushing deeper into the world of traditional studios.
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