The business of GIFs: Then and now

the GIF is one of the Internet’s most
loyal friends. And the story of people trying to make money off the GIF is one
that goes back to the earliest days of the internet. The graphics interchange
format was invented by this guy in 1987. He, by the way pronounces it “Jif.” It wasn’t long before people try to use this technology for business. The biggest operation was a website
called Animation Factory which produced and sold GIFs of every imaginable variety. “It seems like they set out to try and
animate the entire world, starting with the most arcane and bizarre
ideas they could think of.” That’s Alex Goldman he’s the co-host of
one of my favorite podcasts called Reply All He recently ran a story about Animation
Factory’s rise in the late ’90s. “I gotta say my favorite is: there is a
faceless man and he sort of wriggling and floating above him as a UFO.” “There are tens of thousands the owners
say that there’s something like half a million GIFs on the site.” “It’s just a an insane insane amount.” “There was a time on the internet when
these animated GIFs wre the thing you would decorate your
website with. There was no aesthetic for the internet.” Who knows who needed this
image of a guy with an automatic hammer machine but someone did and Animation
Factory was there to make it. “The business model of Animation Factory was
if if there’s something that someone may have wanted one of, we’re going to make
15 of that thing.” “amazingly that was a viable business
strategy in like the late 90s early 2000s.” Alex said that he heard from
someone who was on the board of the company that owned Animation Factory in
the early two thousands. “He told me that animation factory in at
a day was making about 2 million dollars a year in profits.” “I mean the internet of the late nineties
and early two thousands was a pre blog world. “it was before the internet had templates
that allowed people to easily make attractive-looking blogs.” But the
internet matured and by the mid 2000s, web design was informed by
professional standards. Blogs showed up with their standardized templates and
GIFs lost their place as the design elements and place holders on the web. then something started happening around
the late 2000s that would pave the way for a GIF renaissance: Bandwidth
improved and people started making GIFs out of existing video content, not for
web design purposes but solely as a mode of expression the rise of places like Tumblr and Reddit
meant there were more places to put these little bite-sized expressions.
GIFs were back. The gift Renaissance also spurred on
some huge business ventures surrounding the potentially lucrative GIF economy “We’re biologically wired for visual
consumption and communication.” That’s Adam Leibsohn, the chief operating
officer of Giphy which is the biggest of the new GIF companies. They’re basically
a GIF search engine and they plan to make money by partnering with huge
brands to create GIFs of that brands content that people can share in their
day-to-day communication. “So, traditionally an advertiser would
have to spend a lot of money to get their message through the market and
they’re using all this stuff to interrupt your experience and they’re
just hoping that like that message will sink in. And we’re making it a bottom-up
approach in that we’re making this content accessible and expressive. People
are taking those branded objects–that piece of Game of Thrones, that clip of
Seinfeld, and they’re sending it to their friend. Instead of the brand shoving the
message on somebody’s throat, people are the ones being the brand ambassadors. They are
self identifying with the content because they selected it they’re endorsing it because they sent
it to you and you’re both bonding over it emotionally because you’re using it to
communicate.” So while you might send a GIF of Zach
Braff expressing exactly what you need to tell a friend, Hulu sees this as
advertising for their show scrubs. If advertisers looking for “engagement”
with their content it doesn’t get much better than this. Big
production studios see this is a way of sneaking little advertisements in to
your email and text feeds and they may be willing to pay big bucks for
partnerships with places like Giphy. But as of now there are no paid gifts on the
site and Giphy says that they don’t have specific plans on if or how they
will mark sponsored gifts as advertisement For now they seem to be focused on
making GIFs ubiquitous and accessible on every communication platform “You can’t
buy an ad inside of our iMessage conversation that’s just never gonna
happen.” ‘And venture capitalists seem to think
that this is a safe bet as well: Giphy is valued at 300 million dollars
even though doesn’t even make money yet. “Everyone searching for content anyways,
everyone searching for expressive content: hello goodbye how are you they’re really searching for that
content translated or sort through the lens of whatever is the cultural
phenomenon of the moment whether it’s Game of Thrones or some other new movie
or some other big TV show. From an advertising standpoint what we’re
suggesting is we should be doing more.”

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