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Can back-to-back Contract Wins Help IZEA Stand Out from the Competition?

19 Feb Can back-to-back Contract Wins Help IZEA Stand Out from the Competition?

IZEA Worldwide, Inc. (NASDAQ: IZEA), a premier marketing technology Company, announced that it has been awarded expansion of a military contract, that was originally signed in November 2020. The mid-six figure contract was the largest ever received by the company from a federal agency, and now the overall deal size has been increased by 30 percent.

This contract has helped IZEA boost its quarterly growth for Managed Services bookings, which now exceed Managed Services bookings for all of Q1 2020 and comes on heels of a record-breaking January, the best in terms of managed services since its inception.

Ted Murphy, IZEA’s Chairman and CEO, commented,

“We are very excited to see an expansion of this managed services contract with a branch of the U.S. military, following the successful launch of the initial campaign”. He further added, “There are many opportunities to utilize influencer marketing for government initiatives, particularly while we are all impacted by the pandemic. We see additional possibilities for utilizing influencer marketing as vaccination efforts begin to gain steam. It is our hope to partner with governmental agencies as well as pharmaceutical companies and retailers to aid in vaccine awareness and educational efforts.”

The Company is also experiencing positive momentum with IZEAx Unity Suite, a platform that integrates content creation, distribution, payments, and communications and caters to enterprise influencer and content marketing organizations.

IZEA also operates Shake, an online marketplace that connects content creators such as Influencers, photographers, writers, musicians to transact with marketers and individual buyers, with the help of an artificial intelligence assistant, named ShakeBot™.

IZEA Worldwide, Inc. (NASDAQ: IZEA)

Market Cap: $241.49M; Current Share Price: 4.43 USDChart
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Industry
Influencer marketing is an emerging paradigm in marketing, which gives brands the ability to connect to target audiences and opens up new revenue streams for content creators and marketers. Companies are revising their marketing spends to focus on creating targeted communication, to create brand awareness and adoption, through influencers who provider greater connect and appeal to their target audience. Brands have come to realise the power that nano, micro, and macro influencers hold over consumers and their ability to deliver better ROI, provide real-time engagement analytics and add an air of authenticity to the brands offerings.

The trend of influencer marketing can be attributed to the emergence of video streaming and online channels, shifting the audience from more traditional television viewership. The emergence of online platforms such as Facebook (NASDAQ: FB), Youtube, TikTok, Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Hulu are challenging the content dished out by conventional television channels.

According to a report by Grand View Research Inc, the global Video Streaming market will reach and estimated USD 124.57 Billion by 2025, growing at a CAGR of 19.6 percent. The growth is due to the availability of high speed internet such as 3G, 4G and LTE, which is causing an increase in the demand for online and on-demand content. As per an estimate over 100 million internet users watch videos online and 92 percent of these users share video content with others. Live Video is also one if the fastest growing segment in terms of ad revenue, with an impressive 113 percent growth in ad revenues, outperforming the growth of other forms of online video.

A report by Markets and Markets estimates that the global influencer marketing platform market size will reach USD 24.1 billion by 2025, growing at a CAGR of 32 percent from USD 6.0 billion in 2020. However, the lack of proper tools to measure campaign effectiveness, the issue of fake followers etc., may hamper the growth of the sector.

Image Source: Company

 

Company
IZEA pioneered the first technology platform in 2006, that enabled bloggers to create content for brands, bringing together content creators and marketers on the same platform. The platform has over 800 thousand registered users, more than 3.8 million marketplace transactions to its credit, and its gross billings reached over $31 million in 2018. The Company caters to the world’s biggest brands, agencies and media houses such as Marriott, Wendy’s, NBC, The Home Depot, Canon, Panasonic, Meredith, Google, Kraft and Petco to name a few. IZEA is helmed by a dynamic leadership team with experience in marketing, data analytics and entertainment.

Image Source: Company

The Company’s product offerings include IZEAx Discovery, a platform that aids influencer discovery. With over 4.5 Million additions since 2020 and access to 1.1 Billion pieces of social media content, it provides unmatched reach and access to brands. The platform even enables auto-tagging of 4,000+ brands across various categories. IZEAx Unity Suite allows marketers to design and create an automated influencer campaign and measure performance though features such as InfluencerCloud or access the industry’s largest opt-in Creator network.

The Company’s Influencer marketing services are trusted by leading agencies and Fortune 500 Companies to help mould their social media strategy in terms of ideation, project management, optimization and reporting. BrandGraph, a social intelligence platform, uses Artificial Intelligence to enable organizations to understand their social media performance, through in-depth analysis of category spending, sentiment analysis and engagement benchmarking.

Key Remarks

  • The Company has won two contracts from Fortune 10 customers and a seven-figure contract from a Fortune 100 retailer, driving its overall core business volume to exceed that of volume from all of January and February 2019. Influencer marketing is poised to be the future of marketing, with nearly 80 percent of brands having used influencer marketing in 2020 and more than 90 percent rating it highly effective according to a report. Being a pioneer in the field, the Company is in an advantageous position to leverage its experience and extensive reach in the industry.
  • IZEA has increased spending on its marketing efforts in order to drive growth and increase its customer base. The Company is particularly focused on revenue growth through a broadening our customer base that can generate self-service revenue streams. Despite facing challenges posed by the pandemic, the Company’s active SaaS customers reached an all time high in Q3,2020. Customer Signups for IZEAx Discovery reached an all-time high and were up 2.6x from October of last year, while monthly revenue from IZEAx Discovery too reached an all-time high and were up 25 percent over last year. 
  • The COVID-19 pandemic has affected the Company’s sales, revenue and growth as clients have reduced their marketing budgets, this was reflected in its revenue, which was down year-on-year by 9 percent to $4.0 million, compared to $4.4 million in Q3,2019. SaaS services unit had the worst impact, showing a 39 percent decrease in revenue at $522,000, compared to $853,000, in Q3,2019. The Company is also working on changing the pricing models for enterprise customers, which also contributed to the impact on revenue.
  • The Company operates in an industry that is facing tough competition from a growing number of influencer marketing platforms and agencies that are mushrooming since 2019. The industry not only faces cut-throat competition but the threat from formidable players such as Tiktok, Facebook and Snap entering the market and wiping out competition is ever present.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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    References

    https://izea.com/2020/11/09/izea-awarded-significant%E2%80%A8-military-contract/

    https://www.globenewswire.com/news-release/2019/04/23/1808205/0/en/IZEA-Announces-IZEAx-3-0-Unity-Suite.html

    https://www.globenewswire.com/news-release/2020/06/12/2047616/0/en/IZEA-Announces-Shake.html

    https://www.akamai.com/uk/en/multimedia/documents/white-paper/the-future-of-live-streaming-white-paper.pdf

    https://www.marketsandmarkets.com/Market-Reports/influencer-marketing-platform-market-294138.html#:~:text=%5B207%20Pages%20Report%5D%20The%20global,32.0%25%20during%20the%20forecast%20period.

    https://izea.com/unity-suite/

    https://izea.com/2020/11/12/izea-reports-q3-2020-financial-results/

    https://influencermarketinghub.com/influencer-marketing-benchmark-report-2020/

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