Izea, a firm that has ridden the trends of sponsored content and social media by connecting companies with celebrities and personalities, is announcing today that it has raised $12 million in new funding.
The 7-year-old company has already raised $24 million in four rounds of funding, but this is the largest amount raised in a single round to date. The funding was led by Special Situation Funds, with participation by Izea board members and other investors, which were not disclosed.
The new infusion will enable the company to launch a new platform this quarter and hire an estimated 30 to 40 sales and engineering staffers in the coming year.
The company works by matching marketers with so-called influencers, who then create content such as blogs and video to support the brand's objectives. The content is then distributed through social channels for public consumption. Izea's clients have included agencies and brands including Ogilvy, PHD, Unilever and Nickelodeon, per its website.
Although social sponsorship and its cousin, native advertising, have gained acceptance, it wasn't always that way, noted Ted Murphy, Izea's founder, CEO and chairman.
"When the company was originally founded and we started doing sponsored posts, they were considered taboo," he said. "A lot of people questioned the viability of the space. Over time, our model has proven out, with Forbes and even The New York Times saying they're doing sponsored posts. The marketing has come full circle because display ad revenue continues to drop, and CPMs right along with it."
There's been much research suggesting that consumers are skeptical of celebrity endorsements. The idea behind Izea is that influencers are writing in their own voices and matched with individual brands, though, Murphy said, explaining, "That makes the content more relevant to the people reading it. Not all celebrities are created equal. A lot of times, it's not the mega superstars that drive engagement, it's people that fly under the radar that have a very rabid fan base."