Over the last few years, brands, having discovered the leverage of online influencers, have begun to spend real money marketing through these self-made stars. Now as the influencer marketing industry is poised for a boom in 2017, a Los Angeles startup has raised a new round of funding to capitalize on the growing advertiser interest.
SocialEdge has raised an undisclosed series A round from Affinity Group, the new growth marketing and strategic communications firm founded by TPG Growth and Evolution Media. The company, which sells software tools to manage influencer marketing campaigns, has subsequently rebranded as CreatorIQ and plans to expand its research, analytics and business development efforts.
CreatorIQ offers software to companies that work with online influencers to help them initiate and manage campaigns on social media platforms including Facebook, Instagram, Twitter and YouTube. It provides reports on key metrics and also ensures that the campaigns meet compliance standards.
"Influencer marketing has become a core vertical of digital and social advertising over the last few years," says COO Tim Sovay, who notes that even five years ago the term "influencer marketing" wasn't used, and many campaigns were being conducted manually. "The only way that this industry can grow and scale is through technology."
Sovay notes that CreatorIQ already works with a number of companies in the space - including Fullscreen, Michelle Phan's Ipsy, Studio71, Tastemade and VaynerMedia - and is starting to expand into the digital publishing space, as well. "Our goal is to power the technology that powers those businesses," he adds. "That helps them scale what they do day to day."
CreatorIQ is disclosing its funding as the online influencer space kicks off a two-week pitchfest known as NewFronts, where digital companies will showcase their audience to advertisers. Though many of the so-called multichannel networks that once dominated the NewFronts have backed out of the event this year, the influencer marketing space is still booming. A study from eMarketer in late 2017 found that 84 percent of marketers said they would launch an influencer campaign this year, and that nearly half would boost their budget. EMarketer also projected that influencer marketing on Instagram alone would total $570 million in 2016.
"MCNs were early specialists of how to get a slice of experimental budgets," says founder and CEO Igor Vaks. "When experimental budgets showed good results, people with real money are beginning to spend, ad they're taking [those campaigns] in house."
But given how new this industry is, it hasn't completely moved out of the experimental phase. Sovay notes that marketers want to ensure that influencers are following all compliance rules, a need highlighted by the FCC's recent crackdown on unlabeled social media endorsements. They also want standardization of measurement to better understand their return on investment and better track the demographic breakdown of the audience they are reaching.
That's where CreatorIQ hopes to attract customers. Says Vaks: "They want the results to measure it against their other spend. That is the key to unlocking the budgets."