As we recently reported, the court appointed receiver in the Vemma case has been replaced with a monitor, but before that happened, the receiver released a report of its findings on Vemma’s business practices. This report is still worth reading. From it you can glean insights into the FTC’s concerns and game plan in their legal battle against Vemma. An interesting section in the Vemma receiver report describes Vemma’s marketing practices—specifically the YouTube “lifestyle” videos produced by distributors and the by company itself. The section refers multiple times to “a high energy level”, “wealthy lifestyle”, and describes one video as showing “attractive young men and women in a tropical paradise in a luxury hotel in what appeared to be a non-stop party atmosphere.” I took a peek at the YouTube search results, and watched several videos that could be described with exactly those words: a non-stop party in a tropical paradise.
The report’s complaint about these videos is that Vemma’s primary “product” is the lifestyle itself and that the videos don’t include income disclaimers. It’s worth noting that most of them also don’t include dialog or voice-over to directly indicate that the beverage is a literal link to riches. While the report claims that “a very clear message was expressed … that this type of wealth was available to the young consumer by becoming a Vemma,” I’m not sure that this message is as clear as the receiver seems to think.
When we watch advertisements for just about any beverage, we are rarely drinking that beverage at the time—so we aren’t being sold the taste or the sensory experience of consumption. Instead we’re being sold the ephemeral and ethereal feeling-quality of the beverage.
Coffee commercials sell us soft morning light and the pleasurable calm quiet of the hour before the world wakes up. Alcohol commercials sell us the beauty of the distillery, the history of the brand (real or fanciful), the grit and determination of the founder, the feeling of being a discerning connoisseur. Energy drink commercials sell us the dangerous and thrilling lifestyles of daredevils.
Ads aren’t illegal, because the consumer isn’t dumb enough to think that drinking Grey Goose makes him smarter or that if he drinks Bud Light, a woman will step out of his fridge in a bikini. And, if the consumer is that dumb, he doesn’t deserve protection. The practical difference between these ad campaigns and Vemma videos is that with other beverages there is no business opportunity. When you buy a Coke, no matter how heavily the je ne sais quoi Coke advertising influenced that purchase, you are literally only buying a Coke. However, given the popularity of advertisements selling beverages as a ticket to a feeling or lifestyle, the rapidly increasing ease of digital filmmaking, and the college aged demographic for the brand, isn’t it obvious that this kind of marketing video would have sprung naturally from the distributor base?
Whether or not the Vemma video trend did spring up naturally from the distributor base is unclear to me. However, the style choices and the contents of these lifestyle videos are actually a logical step for the layperson looking to sell Vemma.
My experience of the videos was very different from the one painted by the Receiver Report. My background in film editing causes me to view advertisements with cold calculation.
I found these videos neither compelling nor professional. A promo cut together with quick shots of attractive things backed by exciting music and no narration should be short—around 30 seconds. These ads require brevity to engage that intangible desirous place in our brains. Running at over three minutes (and sometimes over six minutes), the Vemma videos are boring. Hundreds of shots, each telling an identical story, don’t excite viewers and evoke desire. They drown viewers in tedium.
From a cinematography stand point, these videos do have some of the gloss of a professional ad campaign, but it would be a stretch to assume they were made by advertising professionals or that they represent evidence of a nefarious corporate plot. Many of these videos appear to be little more than someone’s personal vacation footage with cans of Vemma occasionally in shot. Almost everyone carries an HD camera in their pocket everywhere they go, almost anyone can learn the basics of photographic composition, and almost anyone can slap filters over attractive landscapes to make them look even juicer.
The real problem, as far as I can tell, is educating young, independent distributors who have some technical video making skill and clumsy ideas about how marketing works, on the subtlety requisite in an industry constantly under fire. But how do you do that if they’re new to the industry? How do you explain their precarious position to them without potentially causing them to walk away from the business?
This problem may be bigger than is immediately obvious. As more and more millennials graduate into the work force, it’s inevitable that more of them will join MLMs—whether companies specifically target them or not. With increasing numbers of shutterbugs joining direct sales, the compliance needs of MLM companies will change dramatically. There are hundreds of these Vemma videos, but this is only the first iteration of a market change. By nature, direct sales companies don’t launch major ad campaigns, but distributors do release videos. So far, most industry videos are “talking heads” footage of a distributor giving tips or explaining products. But, as anyone with a TV knows, that type of video is not as powerful as those which provide the fuzzy feel-space offered by iconic Coke commercials.
I haven’t had an energy drink since college, but no matter how many years elapse between my last energy drink and my next one, I will probably buy the same brand. I don’t know why Monster’s my brand. It just is. When you talk to people about energy drinks or colas, they often have a preference. However, as Leonard Mlodinow points out in Psychology Today, our brand preferences have little to do with the product itself. “Pepsi consistently beats Coke in blind taste tests, although people seem to prefer Coke when they know what they are drinking” (Mlodinow).
Of course, successful advertising for Vemma had to invoke a feeling, and of course the most obvious one for successful young distributors to tap into was the feeling of the wealth they were striving toward. I might go so far as to say that distributors should make videos like these if they’re so inclined, but with a bit more finesse.
A large part of the FTC’s complaint against Vemma is that they targeted college students with their product line. Given that Vemma’s biggest product line is its energy drink, Verve, and that “the majority of energy drinks are targeted at teenagers and young adults 18 to 34” (Heckman), it’s not shocking the company went in that direction. The danger in bringing direct sales to college campuses is less about adults victimizing kids than it is about kids lacking the grace necessary to sell and comply at the same time.
What raised my eyebrows wasn’t that the target market was young, but that every consumer complaint listed in the report was made by a male against a male; that each of those complaints depicts an environment of harassment, even bullying; and that each of the lifestyle videos prominently features beautiful young women, none of whom come off as protagonist Vemma reps themselves. From these details we get a picture of what happened on the ground—some odd Frankenstein union of a brand and a frat. The idea isn’t necessarily a bad one in terms of market potential, but it is, at least in hindsight, an obvious compliance risk.
This is only one lesson from the Vemma case. Distributors looking to capitalize on their video making skills need to dig deeper for the narratives they use to depict the positive feelings their brand represents for them. Companies need to prepare themselves for video campaigns like this one—and not just by preparing for the extra revenue they may generate. They should develop guidelines which steer distributors away from choosing “wealth” (in all its incarnations) as the feeling of the brand. And for goodness sakes, give your distributors easy to use, compliant disclaimer text to add to their videos.
A powerful brand is as important in direct sales as it is in regular retail. Embracing and sharing the intangible goodness of your product line is actually a very smart idea, as long as that “goodness” isn’t in itself an income claim.