Devtool Influencer Sponsorship and WordPress Scorched Earth

This video that he published talking about how he will stop doing ads, I actually think, was the best publicity for Vercel ever.

I mean, I talked to him about sponsorship once for a different company and this was when he felt he was under attack. And so I guess I'm revealing my first thing, which is I think he overreacts a little bit or he plays into the drama. But he did make a great point in the video where he said it's not that he won't accept sponsorship, but he'll never accept an exclusive sponsorship.

Hi everybody, my name is Martin Gontovnikas but everybody calls me Gonto. I'm here with Hank Taylor. Every week Hank and I boil down the most important product growth and marketing learnings from what's happening in DevTools. So in simple terms, we'll give you our thoughts on the current thing in the DevTools space. We hope you'll enjoy it. Hey everybody! It was a fun DevTools week, but aren't they all? Today we come with two topics that happened in the past few weeks so we can dive deeper into each of them. I'll start explaining the first one, we'll discuss a bit about it, and then Hank will explain the second one and we'll also discuss about it. The first topic that we want to chat about is YouTubers and YouTuber influencers for the dev space. One of the most known influencers in this space is called Theo, and Theo recently published a video saying that he will stop doing ads and promotions. As he was doing them, he started to notice in comments on YouTube and replies on Twitter that people were saying, "Oh, the only thing you do is speak great about Vercel," or "speak great about this other company," and everybody thinks that he speaks well about those companies because they are paying him. After that, he created a seven-minute video that you should take a look at. He tweeted about it.

It had a great thumbnail, by the way, of him like sitting on the floor with his microphone looking all sad.

I loved it, it was so good. On that video, what he did was he spent seven minutes explaining why he will stop doing this type of ads. Because even though he genuinely loves Vercel and the other products, and he would never sponsor others — at least that's what he says — he still gets shit about it. So his plan is to start moving to doing short ads, like 30-second, 60-second ads in videos, and in the videos he will never talk about anything that's specifically sponsored. This particular video was one of his most popular videos. So on one side, it's interesting how this video that he published talking about how he will stop doing ads, I actually think, was the best publicity for Vercel ever. Because it was a video that had a lot of viewers, one of the most viewed that he had, and at the same time he talked about how he loved Vercel. And he didn't do the ad just because of the money, he actually did it because of that. But I don't know — what are your thoughts on Theo, Hank?

Yeah, well, my thoughts on Theo are various. I've met him in person. He wouldn't remember me because he's kind of one of those types. But I mean, I talked to him about sponsorship once for a different company and this was when he felt he was under attack. And so I guess I'm revealing my first thing, which is I think he overreacts a little bit, or he plays into the drama a bit, of these comments that are attacking him. But he did make a great point in the video where he said it's not that he won't accept sponsorship, but he'll never accept an exclusive sponsorship. Like, he wasn't allowed to talk about Netlify and other competitors. And I think that really bothered him, because then he couldn't really say — he couldn't say the good things about the competitors because he just felt like he couldn't talk about them. But overwhelmingly, the comments were really positive on the video and on his tweets. So I think he played it up. And I think also just devtool influencer marketing, content creator marketing, whatever you want to call it — we've got a long way to go. I know you've done this probably more than anyone I know, so I'd be curious your take on what the status of it is, what you can say about the current pricing and how good or bad it is for either side, and how much longer until this is like a really formulated, understood thing.

To me, what's fascinating about — and I'll talk a bit about that — but to me what's fascinating about this Theo thing as well: number one, he always tries to be controversial on Twitter and I think he does it to create engagement. So in part, I think he did this video on purpose because it did help him. I also could understand that if Vercel pays, they don't want Netlify or the other people to be promoted, and that I think is an okay ask. But I get how he would feel uncomfortable about it. The only thing is that his final — so everything he did on this I think was great and creating more engagement for him. The only thing that sucks is that he'll move to this 60-second video, because I would personally, with any of the companies that I advise and that I work with, never sponsor a video where it's just 60 seconds. Because in YouTube and in Spotify, there's this magic button that is skip 15 seconds or skip 30 seconds, and you know that if it's one minute, you click it twice and you don't have to listen to it. And it also feels less organic. And maybe it will deliver, but for sponsorships to work with influencers, it has to be organic. And that's why I love this idea of Theo: "I will only take sponsorship from companies that I love," because he loves them for real. And if they mention the company, for sure, like, they'll pay. But making it this way will make Theo talk about companies he doesn't value or he doesn't like. So now his opinion on what he's doing with the ads is worthless. And that means that I don't think it's worth...

Paying. It's no longer an endorsement. And that was one thing — when I talked to him, I was speaking on behalf of a really new company, and he said, "Well hey, if I haven't used the product for at least a year, then I'm not gonna accept sponsorship from it." And I told him, that's a great take, honestly, because then it means you're really endorsing it. And I can't fault you for that.

Exactly. That's why it's not an endorsement, it's just an ad now. It makes no sense. I'm releasing with Clark, with whom we've been doing this for some time at Hyper Growth Partners, a blog post on how we do this strategy with YouTubers. And to me what's fascinating is that if you think about YouTubers for DevTools, it's similar to what TikTok is for B2C, or even YouTube — it's like the consumerization, as they call it, of B2B. And I see more and more people trust what these YouTubers say, especially people who are 20 to 25, 20 to 28, because it's this new way of searching and learning. So I think that working with YouTubers is a must. But at the same time, when YouTubers get popular, they become really expensive. Like Theo now or ThePrimeagen are really expensive. So I think you have to think about this idea of separating up-and-comers with established ones. Maybe you lose some established ones, but at some point in time they become very expensive. I always think about paying between $20-25 to $60 per CPM — so per thousand views on the video — and some of them are charging a lot more than that. I don't think it makes sense at that scale.

And that CPM is already outrageous. If you're familiar with ads, even the best YouTube CPMs, which are for like finance channels — those will get $7-15 CPM if you're like one of those finance channels. And that's why there's been like a surge on those. I don't know if you're familiar, but most YouTube channels get $2-5 CPM.

So my brother actually works at a YouTube influencer and Twitch influencer firm. For example, they get paid for a finance one between $20 and $30, and they try to pay less to the influencers because that's where they make the money. But he still told me that finance influencers, for example, make more money than the journalism ones. And there's ratios depending on the niche, how big the niche is, and mostly how much money people in the niche have. That's why I think DevTools is more expensive — because DevTools is to buy software for a company, and because those acquisitions are so expensive, what you can pay for CPM, in their mind, I think is higher.

One other interesting tidbit I'll say on this — this happened a few months ago, but I approached another person who has been growing their YouTube channel about sponsorship, and her reply was, "No, I need to stay neutral for longer while I'm still growing." And I just thought that was a very interesting take, because for these content creators, there is a price on picking a side and having an opinion. And for someone like Theo, he leans into it because controversy can create engagement.

But not picking could also be a problem, because if you don't pick and you lose the 30-second ads, then maybe if other people think like me, they would never get sponsored.

Or you get no ads at all and then you can't really make a living doing that, because even the top devtool influencers, they're not getting that many views compared to true YouTuber stats or true Twitch stats. Anything else on this? Nope, I think that's it. Maybe we can switch to the second one. We're going back in time for most people who I think might listen to this, but WordPress is still around and kicking — and actually kicking, maybe literally, against itself. Matt Mullenweg, who's the co-founder of WordPress, the open source stuff — he's also the CEO of Automattic, which carries the trademarks for WordPress and makes, you know, like $100-200 million a year or maybe even more. So there's drama in WordPress land. WordPress is open source tech that you can use to build websites. Usually people host it on Automattic, which is a company where the CEO is the co-creator of WordPress and they hold all the trademarks for WordPress. And that's Matt Mullenweg. And then there's a rival company — there's a bunch, but kind of the other big one is WP Engine. Not WordPress Engine. So Matt Mullenweg went on his keynote and a blog and basically lambasted WP Engine for not contributing back to the open source. He said they don't give any time, they don't contribute, they were bought by a big private equity firm, and they're hollowing out our open source community for money, and I just want them to contribute. But he's also threatening trademark infringement, lawsuit enforcement, whatever. And WP Engine replied publicly with a cease and desist letter stating, "Hey, this is malicious." Oh, and notably, Matt Mullenweg in his blog and the keynote said, "Hey, when it's time for renewal, I think you should reconsider WP Engine" — a direct attack on their revenue. So of course they got a cease and desist. I guess they're saying — WP Engine is saying — oh, this is libelous, it's defamation, it's interference with our business, you're threatening our employees too. Which Matt Mullenweg did — like, he went pretty fast and loose in this keynote and Q&A. And I wonder how much he prepped with his lawyers, because I feel there's an inevitable lawsuit. And the big thing for me, as two people who are very familiar with open source and hosting of open source tech: what are all the customers and community gonna do? This probably spells trouble, like, broadly for WordPress, which has already been slowing growth over the last several months or several years if you look at overall internet usage and share of WordPress. What kind of lawsuit is going to happen and who's going to win out? And the winner is probably not anyone in the WordPress community. What do you think?

I agree, I think this is bad for the WordPress community. To me what's fascinating is that he first complained about them not spending hours on open source, as you said. But so the only legal thing that they can do is complain about the trademark, because they are stealing the trademark. At the same time, Matt and Automattic actually invested in WP Engine, as they did in a lot of other hosting places, in 2011. And between 2011 and now, in 13 years, they didn't give a shit about the WordPress thing, and now they do. So it's like — I think for anybody in the public, it's very easy to understand that this is a way for Matt to stick it to them. At the same time, it was very interesting that WP Engine replied with a cease and desist with screenshots of text messages that they got from Matt. And what you could see on the messages is that actually Matt was asking for money. I think that the problem is that Automattic is maybe doing $300 million in ARR. I think WP Engine is more like $500 million. And they are like, "Wait, but we created it — how can we be lower?" And he's asking for money they didn't want to pay, and that's how this whole thing blew up. I think it's the worst PR ever for Matt, because he seems like a greedy bastard that is asking for more. And of course, I understand the open source ask, and that is the important thing that Matt should have highlighted. But because he was a bit of an asshole on sending the messages, he was trying to get money, he did like a big thing on keynotes and stuff like that — I think he ended up looking bad for a good request in the beginning. But I think that good request of more open source hours was actually not real.

And to speculate here, I think because he did invest in WP Engine, that private equity purchase means he already got paid out.

So for years it was great — my investment is growing — and now it's, "Huh, I no longer have a stake in this company. What am I getting from them? Nothing, except they're kicking my butt." So what can I do? And also WordPress in general isn't growing. You know, it used to be a rising tide, all boats were going up. And now the tide is starting to go out, so the only way to get your boat up is to actually take the water from under the other boat. Terrible metaphor to take that far, but you know what I mean. So I was exchanging some tweets with some people who are like deep in the community — when's the last time you even had a WordPress site? I think I had one in like 2013 where I posted haiku, and that was it.

But I hated WordPress back then as well. So, I'm not a WordPress person. I think honestly, if I had to pick, WP Engine will end up as a winner. What we need to learn from here is that this, I think, was a big PR mistake. Like, it started with a great idea of asking for more open source hours, which if it would have been only that, maybe would have had good PR, or like if he made it funnier, as a joke. But in the end, with threatening messages, with a crazy cease and desist 13 years after, and everything — I think he ended up looking as the bad guy in the movie who's desperate to make money. And ended up being the worst PR ever for him.

I agree with you, except I don't think either one of them wins from this. I think this is just bad news.

All around. Is it good news for the other hosting providers that are not Automattic or WP Engine?

Maybe. Whenever people take pause to re-evaluate — and this is where I'm not familiar enough with WordPress tech to say — but they might also look outside the ecosystem. Because usually when you're thinking about, well, where do we host now, you might also think, should we still use WordPress? You know, I've been hearing all this great stuff about JavaScript, and maybe we should have really cool dynamic front-ends. And you know, Laravel Cloud's coming out soon. Who knows? There's so many ways to host now, and there's been kind of a hosting revolution for sites and apps. I don't know what happens, but WordPress people are kind of a special type. It's a whole category of developer where there would be some retraining required. So yeah, it'll probably spread out the money a little bit in the community. And I think those who aren't hyper-specialized on WordPress, or have been maybe needing an excuse to learn something and retrain on something new — I guess one more point: there was one woman in the Q&A who's 64 years old, and she's clearly like, she's never gonna retrain, right? There are also a lot of younger people asking questions, and those are exactly the type of people who are gonna retrain and move on to something entirely new.

And if you've seen the WordPress code and what it takes to change something, I hope you're scared. Like, I think WordPress is good if you don't touch the code. In the end, on this I think differently — I think it will be good for WP Engine. But I don't think there's gonna be a big change other than that. We'll see what happens.

Okay, so speaking of WordPress, just an item of note here. WP Fusion raised their prices 20% in June, and they published the analysis of the results, and they saw a net positive change. It was really interesting. We'll put it in the show notes, we won't talk about it much, but they hadn't changed their prices since 2016. And it's interesting to see a company that's probably been paralyzed and terrified of changing their prices for eight years finally do it and see a good result. So definitely some learnings there. I don't totally agree with the experiment design or their analysis — I think they could have had some improvements — but overall I think they had a good experiment and a good conclusion.

Makes sense. Maybe for the next episode. Thank you everybody for listening to us on the first one. It's the first one, so I'm sure that we fucked up in multiple places and it's not the best. So if you have any feedback, feel free to tweet either to Hank or to me with any feedback on this. Thank you!