This sounded too good to be believed, but my friend protested it was true: “This guy Kenny, he reviews mattresses online, and companies just send them to him. He can’t get rid of them fast enough.” Not long after came the email introduction: “David, meet Kenny.”
Journalists aren’t supposed to accept freebies. But the one thing I was certain of was that I would never write an article about online mattress reviewing, a subject so self-evidently boring that I became a little sad just imagining it. So when Kenny replied that he expected to have a mattress to offload soon, I only asked him what sort of wine he liked.
Kenny Kline turned out to live just blocks from me in Brooklyn, and I walked over a few days later with a nice bottle of red under one arm. Kenny buzzed me in and I stepped inside the entryway, where I found a queen-size mattress already waiting for me, ready to grab and go if I pleased. But I wanted to give Kenny his wine.
I called up to Kenny, and he emerged from his apartment to greet me on the stairs. He was tall and good-looking, with a kind of brogrammer affability. Later I’d learn he had studied physics and finance at Washington University in St. Louis, where he rowed crew and was a Beta Theta Phi brother. I’d also look up some of his mattress reviewing videos.
I asked Kenny about his unusual hobby, figuring that reviewing mattresses was something he did for beer money. But he surprised me by saying that this was what he and his business partner, a guy named Joe Auer, did for a living; their two websites, Mattress Clarity and Slumber Sage, were exclusively dedicated to reviewing mattresses.
I called an Uber and hauled my free mattress up to my third-floor walkup apartment. The mattress had a poofy marshmallowy top that I didn’t quite love, but you get what you pay for. I got used to it as the months went by.
I might have forgotten about Casper’s rumored lawsuits altogether, if the mattress brand hadn’t kept following me everywhere I went. That summer and through the fall, Casper ads sprouted all over New York: beautiful ads, often lining subway cars, featuring cartoon creatures curled up together on mattresses. In Casper’s cartoons, even the big bad wolf slept peacefully next to three little pigs.
In October I wrote Kenny to ask what became of those lawsuits. “One of the bloggers just publicized it,” Kenny wrote back, providing a link to a website, Sleepopolis.com.
“Casper Sues Sleepopolis with Federal Lawsuit,” read the headline on the page I opened. The post was written by a guy named Derek Hales, the site’s proprietor. Derek’s photo showed a pale, skinny twentysomething with freckles and short red hair. I clicked around on his site. Derek Hales evidently took mattress reviewing seriously, rating the firmness of mattresses on a scale from one to 10, cutting them open to measure the exact thickness of the foam.I returned to the page outlining the lawsuit.
So it was true. I scratched my head. Casper was on its way to becoming a 750-million-dollar company. It was the hottest of the bed-in-a-box disruptors, with investments from celebrities like Ashton Kutcher and Nas. And it was picking on some skinny blogger from Arizona?
I called my editor and confessed that in a moment of weakness I had accepted a free mattress from an online mattress reviewer named Kenny, and that I wanted to write about this bizarre industry and its even more bizarre David-and-Goliath legal battle.
I couldn’t know it then, but the outcome of that battle would influence the purchase decisions of many thousands, if not millions, of people seeking a good night’s sleep. It would also reveal just how thoroughly the internet and the businesses that thrived there had blurred the lines between product reviews and advertisements. All I’d wanted was a mattress, but what I got was a look at a little-known and hugely lucrative annex of e-commerce, one where the relationships can often get a little too comfy—until they’re not.
I wanted to learn how Derek Hales had gotten into mattress reviewing, so I called him up in Arizona. He had the nerdy intensity of a Jesse Eisenberg character. Derek told me he’d always been entrepreneurial; he’d helped pay his college tuition by creating aWorld of Warcraft blog. After graduating from Kansas State in 2010 with a business degree, he spent the next few years working for a company outside Phoenix, doing search engine optimization, or SEO, the art of getting web pages to rank higher in Google searches.
In 2012, Derek messaged Samantha Niezwaag, a math teacher, on ChristianMingle.com. “The emails soon turned into novels,” Samantha would later recall. Both had grown up in the Midwest and the South; both were obsessed with Lord of the Rings. A flirty conversation turned to the question of whether they could squeeze 78 dates into 25 weeks, which Derek remarked would mean 3.12 dates per week.
The young husband and wife needed a new mattress, but were shocked by the prices at the local mattress store: the average queen-size was around $1,500, but as much as $5,000 for a fancy Tempur-Pedic. One of Derek’s coworkers told him about a two-year-old Phoenix-based company called Tuft & Needle, which sold its queen-size mattress directly to consumers online for just $600. Though buying such a large item online felt a little unusual, there was a 100-day trial period, so what was the risk?
When it arrived, Derek and Samantha found the Tuft & Needle too firm for their tastes, so they organized a donation pickup and received their refund. Then they tried their luck with another online mattress company called Casper, which had just launched. When their Casper mattress arrived, Derek and Samantha found they liked it enough to keep it.
A few weeks later, in September of 2014, Derek spotted an opportunity. He registered the domain Sleepopolis-Mattress-Reviews.com and threw together a quick website comparing his experiences with Tuft & Needle and Casper (he eventually migrated his content to Sleepopolis.com, which he had also registered). A week later, Derek and Samantha posted a positive video review of their Casper on YouTube.
“Pretty quickly, it seemed I had struck a chord with a lot of people,” Derek recalled. The Casper video eventually racked up 25,000 views.
From the beginning, Derek monetized his site and YouTube channel using what are called “referral links,” or “affiliate links.” These special links were embedded with a tracking code. If a consumer clicked from Derek’s site through to a mattress company’s website (like Casper.com) and made a purchase within 30 days or so, then that company would pay Derek a reward.
Derek disclosed the nature of these affiliate relationships in a corner of his website, though not the exact terms. In those first months, he told me, Derek typically received a $50 digital Amazon gift card for every mattress sold (or 5% on a roughly $1,000 mattress, a commission rate that had become standard in affiliate marketing).
Affiliate marketing is about as old as e-commerce, but the industry got a kick-start after Amazon.com launched an affiliate program in 1996. The industry has since ballooned, with around $4.5 billion changing hands in 2016 just in the U.S. Affiliate marketing is even becoming an important source of revenue for legacy publishers likeThe New York Times: Last year the paper paid $30 million for two review sites, The Wirecutter and The Sweethome, which have built a bustling business around affiliate links. But a much larger share of the affiliate marketing economy is made up of people like Derek Hales, stray blogger-entrepreneurs who hunt for emerging categories of products that consumers are seeking guidance on, then jockey for top position in related Google searches (like “best mattresses” or “mattress reviews”).
Derek was smart and talented, but he was also lucky. Through a series of coincidences–getting married in May 2014; living in Phoenix, where Tuft & Needle was based; disliking that mattress and trying a Casper instead; having some SEO savvy–he had stumbled into early-mover advantage in a category primed to explode.
“There was a waterfall of companies launching,” he recalled. Nipping at the heels of Casper and Tuft & Needle came other direct-to-consumer mattress companies like Leesa, Yogabed, Purple, and GhostBed; in time, over 100 brands in all. Most were new companies, while others were e-commerce divisions from legacy brands scrambling to make up lost ground amidst a tectonic shift in how consumers were beginning to buy mattresses. In the $14 billion U.S. mattress market, online mattresses only made up $300 million in sales two years ago; this year, sales may reach $1.2 billion. All of these emerging brands wanted Derek to review their products like he had the Casper–and all were willing to pay Derek a bounty. Like Kenny Kline in Brooklyn, Derek was soon handing out free mattresses he’d reviewed to his Phoenix friends and neighbors, and eventually had mattresses piling up in a spare room.
In February 2015, Derek quit his day job to focus on Sleepopolis….
Continue at: https://www.fastcompany.com/3065928/sleepopolis-casper-bloggers-lawsuits-underside-of-the-mattress-wars
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