me_undiesThere are some rules that seem to be etched in stone. For example, porn sites are off limits for VCs and brand advertisers – or so the prevailing wisdom goes. Despite the potential for substantial return on investment, few have been willing to cross that ethical and moral line. Recently, however, one startup chose to break this unwritten rule in search of untapped audience and, perhaps, a hint of controversy along the way.

Earlier today, Los Angeles-based subscription underwear and apparel basics startup MeUndies began a custom ad campaign on two-month-old adult site PaintBottle.com (NSFW). More unusual, the idea for the ad strategy came not from one of the companies or from an ad-agency, but from one of MeUndies investors after seeing PaintBottle covered favorably in the tech and mainstream press. The companies claim that they had absolutely no connection of any sort prior to this ad placement.

PaintBottle stands out from its competitors in a number of ways that make it unusually attractive to mainstream advertisers. First is its design aesthetic and content curation. Put simply, the site sets a certain bar in terms of the quality and class of video content and advertisements that it’s willing to host on its site. All video is fully licensed, available in HD, and averages ten minutes in length – all of which are rarities within the category.

Further, founders John Phillips, Craig Hensley, and Amy Ambrose are seemingly allergic to the aggressive, misogynistic themes that dominate the bulk of adult tube sites today, in content as well as advertising. Consequently, their site would be considered moderate or even conservative by industry standards. They should know as all three founders are from Montreal, which is home to Manwin and Gamma, two titans of digital porn.

“Where we’re from, if you’re in technology you either work in porn, or you know someone who does,” Phillips says. “We decided to do something different in this space. The industry needed to clean up its act – it needed a new model. We think we’ve come up with something that works.”

As a result, PaintBottle sees average time on site (ATOS) rates of more than 12 minutes, as compared to adult industry averages of 6:40 according to Phillips. Between its content standards and its 80 percent above average ASOT rates, PaintBottle is a more attractive advertising opportunity than most sites in its category. But let’s be clear, it’s still porn and its still something that would be objectionable to a large percentage of society.

MeUndies is no paragon of virtue itself. The company sends its customers packages of condoms with each product delivery and its official blog is little more than a feed of beautiful and barely-dressed models, male and female, showing off the company’s product. Founder Jonathan Shokrian describes the brand as a hybrid of American Apparel, which is known for advertising that approaches softcore porn, and Gap which is all American and family friendly.

“We’re always looking for new ways to get our brand in front of people,” Shokrian says. “If that means a little bit of controversy, so be it.”

One appealing aspect of advertising on adult sites is that CPMs (impression-based advertising rates) are typically well below those available elsewhere on the web – the industry average is a paltry $0.14 to $0.40 per 1,000 impressions. But this isn’t the case with PaintBottle, which uses its content standards and engagement levels to justify rates of $3.50 or more more, similar to those commanded by premium publishers, Phillips says. On the upside, the publisher also sells its ad placements direct, rather than through an ad-exchange or other commodity model, meaning advertisers have the opportunity to develop a custom placement which is more like a band takeover than a standard banner. For PaintBottle, the strategy is expensive, but the only way to make the economics work without resorting to the unscrupulous tactics of their industry peers.

“Half of the Internet-connected populous watches adult content. That’s more than the viewership for Netflix, Hulu, HBO GO, Amazon Instant Video, and all other forms of TV-on-the-Web entertainment combined,” Phillips says, noting that PaintBottle has seen more than 500,000 unique visitors in its first six weeks since launch. “Yet adult sites remain littered with low-resolution images and giant banner ads – artifacts of an Internet that is a decade past. In remedying these consumption experience and quality control problems, we offer an adult platform through which non-adult, mainstream advertisers can target this massive and mature audience.”

So the question becomes, will MeUndies out of the box thinking pay off and what are the risks? It’s hard to see how it can go wrong. Anyone who encounters its ad on an adult site first made the decision to visit that site themselves. So it’s hard to see that being a source of offense. And anyone who is turned off by reading this or another article describing the advertising strategy was likely never going to be a customer of this edgy, youthful brand to begin with. In other words, it’s more likely that the ads will prove ineffective than that they will prove destructive. And there’s every chance that they will be wildly successful.

For PaintBottle, the strategy of eschewing paid membership – a dying model in its category – and low-brow advertising and industry cross-promotion appears to be a wise move. The company may struggle to get more established brands like Gap to adorn its classy smut but there are thousands of other MeUndies out there that are progressive enough and desperate enough for eyeballs to consider this strategy.

While neither company is changing the world, both fulfill a basic human need. And as much of 30 percent of all internet bandwidth is said to be dedicated to serving porn. The eyeballs demand that advertisers at least consider how to reach this audience. If sites like PaintBottle are able to deliver a more approachable product, we may be at the forefront of what could become a trend of mainstream brands advertising alongside curated adult content.

[Click here to view the mildly-NSFW but clever ad that MeUndies created for the PaintBottle campaign.]

  1. MeUndies
    Online basics for men and women.
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    Premium underwear, socks, and t-shirts for less. Purchase as you please or put your favorite basics on auto-ship.

    1. Michael Jones
      Past Investor