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Izea's New Exchange Puts Social Media Reach Up for Auction

Buying influence online gets automated

Kim Kardashian Photo: Gisela Schober/Getty Images

Even mommy bloggers could now sell their advertising services—like promotional tweets and YouTube videos—through an automated exchange. Izea is launching its Sponsorship Marketplace today, moving its network of Internet celebrities, mommy bloggers and social media stars to an auction-style platform for advertisers to bid on their endorsements.

Izea CEO Ted Murphy said his company is embracing the same process that works for selling digital display ads on automated exchanges. Izea says it has 800,000 “content creators” who are active—and some quite influential—everywhere from Twitter to Facebook to YouTube, and thousands of advertisers looking to enlist their support in marketing campaigns. 

 

These types of social media promotions can be a murky area in advertising, one in which the Federal Trade Commission has taken an interest. Regulators want to make sure consumers are aware that when a blogger, Twitter user or YouTube video touts a product for money the message is marked as sponsored.

On Twitter, users may notice the hashtag “#ad,” which Murphy said is one of the methods Izea has embraced, at least on that platform, to clearly label promotional posts.

These types of sponsorships—an everyday blogger touting a new Arby’s sandwich or a new TV show—have become big and small business, with some Twitter users getting in on the marketing act with only a couple thousand followers. Some have millions of followers, and can make hundreds of thousands of dollars a year marketing to their online audiences.

In one of the more high-profile examples, recently Kim Kardashian tweeted about Allstate Insurance. Lenovo used Izea to help in its campaign for its Yoga laptop-tablet hybrid device.

Izea reported almost $2 million in ad bookings in the fourth quarter last year, an increase of 140 percent year over year. The company counts a percentage of those ad bookings as revenue but the bulk of it goes to the online endorsers.

The new marketplace is designed to bring scale to the process, Izea said, and lets advertisers recruit bloggers and social media users while maintaining control of the message by pre-approving all posts.

The new marketplace will replace Izea’s older platforms—called Sponsored Tweets and SocialSpark—that used to handle the advertising. The marketplace also labels the marketing material to comply with FTC requirements, Murphy said.

Izea said that it it is signing up more media companies and potential star power to announce in the coming weeks. The 7-year-old company raised $12 million last month.

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