With social media now an essential part of users' daily routines, a growing number of marketers are harnessing social media as an advertising platform. Market researcher BIA Kelsey predicts social media advertising revenues will grow from $4.6 billion in 2012 to $9.2 billion in 2016, a compound annual growth rate of nearly 19%.
One way for investors to play the boom in social media advertising is through IZEA (OTCQB: IZEA). IZEA is a pioneer of social media sponsorship (SMS), a fast-growing segment of the social media advertising market. IZEA's platforms take the concepts of product placement and endorsements commonly found in movies, TV and radio and apply them to social media, allowing a wide variety of social media publishers, from college students and stay-at-home moms to celebrities, an opportunity to monetize their content. In exchange, advertisers gain direct exposure to the publishers' network of readers and fans.
IZEA works with over 850,000 registered social media publishers, or "influencers," in 147 different countries. The Company has completed over three million social media sponsorships for customers ranging from small local businesses to Fortune 50 organizations and top-tier brands such as Coca-Cola, AT&T, Microsoft, Kraft, HP, LG, Audi, Volvo, Hilton, Walgreens, Hershey and Sony. IZEA generates more than 220 million monthly SMS impressions through its advertising platforms, which include:
SocialSpark: IZEA's premium blog marketing platform, SocialSpark, connects advertisers with blog publishers to create sponsored blog posts.
Sponsored Tweets: Marketers pay for Twitter campaigns on either a Cost Per Tweet or a Cost Per Click basis. Advertisers can hand-pick individual tweeters, including celebrities.
Staree: Advertising platform that allows top social influencers to post photos, videos, and updates to their favorite social networks, earning cash in the process.
The Company reported revenues of $3.9 million for the nine months ended September 30, 2012, up nearly 40% over the same period in 2011. The Company's gross profit margin has nearly doubled since IZEA's inception in 2006, reaching 59% in the third quarter of 2012. With a sales pipeline of $12 million, IZEA is positioned for solid growth in 2013 and beyond.
IZEA currently trades at a discount to its trailing 12-month sales, creating a strong profit opportunity for investors who build a position today. Don't miss out.
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