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The Well Followed on Social Media Cash In on Their Influence

The Well-Followed on Social Media Cash In on Their Influence

By Jenna Wortham, The New York Times | Updated: 9 June 2014 11:26 IST

Good thing social media did not exist during the era of "Mad Men." It might have put Don and Peggy out of business.

Brands and advertisers, looking for ways to reach audiences beyond television screens and magazine pages, are turning to people with many followers on social media and paying them to pitch products online. The social media stars, in turn, are finding that working as a conduit for a brand can be quite lucrative - sometimes generating more than enough money to live on.

Robby Ayala, for example, dropped out of law school to pursue his career as a full-time video creator on the video service Vine, publishing several goofy six-second movies to his 2.6 million followers each day. Last summer, he got a call from Niche, a company that wanted to hire him to make a short commercial for GroupMe, a messaging application, and post it for his followers to see.

Ayala, a natural ham, made a short comedy skit of himself using GroupMe to text his friends a selfie photo. He accepted the job, and others like it, which pay several thousand dollars, and he has not looked back since.

"I saw how it could be more of a profession than a hobby," he said. "I wanted to be a part of it all."

Ayala and others like him have joined a long line of innovators who have found clever ways to build businesses on top of existing websites and platforms - often before the services themselves have figured out how to make money. The early days of the iPhone, Facebook and Twitter, for example, were defined by the applications built by developers for those products and services.

This latest incarnation follows the tradition. Only this time, advertisers are tapping popular personalities and characters on Vine, owned by Twitter, to make microcommercials in the same spirit and style that made the social media account popular in the first place.

Ayala made a name for himself on Vine by filming humorous skits with his friends and family that made use of his boyish good looks and physical comedy. In November, Ayala joined Niche full time, to work as the company's creative partnership manager, which he described as helping other Vine users polish their content and make videos for advertisers.

In many ways, Niche has become a talent scouting service and advertising agency rolled up into one - it matches social media stars with marketers and advertisers who want to reach the young users who inhabit those platforms full time. Those users then make content - like Instagram images or Vine shorts - around a company or product, like baby clothes or a sports drink, and post it to their accounts for their followers to like and comment on.

Niche says that it has close to 3,000 social media accounts, with a total reach of 500 million followers. The agency has worked with roughly 70 brands, including Home Depot, General Electric and Gap Kids.

Liz Jones, executive vice president for digital marketing at Relativity EuropaCorp Distribution, a media company that produces feature films and television shows, said that Niche was just one outlet of many that she used to market her company's offerings.

Jones turned to Niche recently when she wanted to market a coming children's movie, "Earth to Echo."

The company flew a handful of popular users on Vine and Instagram to meet the stars of the film and post about it on their various social media accounts.

The company wanted to reach young users "in a way that's really in their world, rather than just with our regular ads," she said.

And she wanted to make sure that "Echo," which had no boldface-name stars, did not go unnoticed by her target demographic.

"I'm a big believer in that influencer marketer," she said, "or someone telling you that something is cool and that you should like it."

The resulting Vines and Instagrams directly correlated to spikes in traffic to the film's Wikipedia page and views of the trailer on YouTube, she said, and that is what she had hoped for.

"That's all I wanted to do at that point," she said. "Just spark their interest so that if they don't know about the movie, they look it up and are talking about it."

Rob Fishman, one of the founders of Niche, described the service as a "native ad factory," referring to the kinds of advertisements that look somewhat similar to the content around them.

"It's not canned content; it looks and feels like the native content in their native feeds," he said.

Native advertising is one of the fastest-growing types of advertising, especially on mobile devices. The format has raised questions from federal regulators about how paid content that blurs the line between editorial content and ads should be identified to users.

The government already requires that sponsored posts, paid search results and promoted posts must be denoted as such, but has not yet set additional guidelines. Many expect that it will do so, to help consumers distinguish between regular posts and advertisements.

In the case of Niche, posts usually include a comment or hashtag referring to the company they are promoting for their followers, but there is no mention that the video is an advertisement. Fishman said that the company encouraged social media celebrities who participate in promotions to use language like "I'm partnering with" or "teaming up with" or even hashtags like #sponsored or #ad to help consumers distinguish between them.

Jethro Ames, 35, who lives in San Diego, described himself as a "traditional print designer" who built a career on print ads and logos when he started making stop-motion videos and posting them on Vine. Eventually, the demand for his stylistic Vines outpaced his traditional print work, and he quit to work on social media full time. He even transformed the two-car garage in his home into a production studio for his social media creations.

Many of his videos are posted by the brand account he works for, like Home Depot, making it clear they are promoting the company.

"People don't sit around watching prime-time TV waiting for ads to appear anymore," he said. "They watch online or even through the Twittersphere. It's powerful."

Fishman says that campaigns through Niche pay a broad range of fees, from $500 to as much as $50,000, but the average payout for a Vine campaign ranges in the mid-four figures. Ames declined to say how much he earned, but said people posting advertisements on Vine can make six figures a year, and some as much as $300,000.

Niche itself makes money, too, Fishman said. The company, which has a few more than a dozen employees split between San Francisco and New York, has generated more than $1.5 million in revenue since its inception last June and expects to bring in over $4 million by the end of the year.

The company recently raised $2.5 million in venture financing from SoftTech, Lerer Ventures and SV Angel, among others, at an $11 million valuation.

Fishman said he and Darren Lachtman, Niche's other co-founder, hoped to create the future of advertising on mobile phones.

Companies "don't have to pay to hire Don Draper" for expensive print and television ads, he said. "They can come to us to create it."

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