Social media celebrities can reach a lot of people with a single post. \u00a0Each new platform has turned\u00a0dozens of “normal” people into online personalities that command the attention of millions of eager listeners. \u00a0Whether it’s beautiful pictures on Instagram, bedroom song covers on YouTube or funny 6-second clips on Vine, creators have\u00a0found endless ways to captivate the attention of their legions of followers.<\/p>\n
The time that people spend consuming this content is time that they used to spend consuming more traditional forms of media: TV, magazines, newspapers. \u00a0The consistent thread between these mediums is\u00a0that they are\u00a0all funded heavily by advertisements. \u00a0So as engagement has shifted, so have\u00a0advertising dollars. \u00a0The problem is, these brands don’t have the bandwidth, or the means, to get in touch individually with content creators. \u00a0And the content creators aren’t experienced or business-savvy enough to properly conduct regular negotiations for their services.<\/p>\n
Enter companies like Niche. \u00a0The New York Times describes niche as “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.”\u00b9 \u00a0Niche has successfully capitalized on the convergence of two market forces: digitization and social media. \u00a0Niche has been able to build its business around the traditional agency model, where it takes a cut of all of the advertising deals it brokers, while taking advantage of its digital nature to do so at a scale much larger than its headcount would normally indicate. \u00a0Niche can manage all of its clients from an office in New York City, despite the fact that its clients are spread around the entire world, because it operates in the digital world, the same world in which its clients live and breathe.<\/p>\n
It’s working out pretty well for Niche. \u00a0The company was acquired by Twitter for a rumored $50 million, and prior to acquisition was already at a $1 million per month revenue run rate.\u00b2 \u00a0It manages over 6,000 clients despite it’s small operating team, and has signed some of the biggest clients in the industry. \u00a0Names like Nash Grier and Jerome Jarre may not have the same cache as Taylor Swift or Beyonce, but they have social media followings that rival that of any traditional celebrity. \u00a0These online celebs can earn over $100,000 per sponsored post, which spells good news for companies like Niche in this new digital economy.\u00b3<\/p>\n
If companies like Niche and the clients they work with can maintain authenticity for these paid endorsements, everyone stands to gain. \u00a0Brands will reach a highly concentrated, highly segmented group of users that should translate into more effective advertising campaigns. \u00a0Content creators will be handsomely rewarded for their broad reach. \u00a0Social media platforms will become even more cemented into the fabric of our lives. \u00a0And companies like Niche, with their powerful “influence algorithms” will be able to efficiently represent thousands of clients across the globe, earning their keep as the new generation of advertising agency. \u00a0One can imagine that they could continue to expand and take on other parts of the value chain, including campaign creation, analytics, and execution. \u00a0All of which positions them to win for many years to come.<\/p>\n
<\/p>\n
\u00b9\u00a0https:\/\/www.niche.co<\/p>\n
\u00b2\u00a0http:\/\/recode.net\/2015\/02\/11\/twitter-buys-niche-a-social-media-talent-agency\/<\/p>\n
\u00b2\u00a0http:\/\/www.capitalnewyork.com\/article\/media\/2014\/03\/8541139\/niche-hit-1-million-revenue-month<\/p>\n
\u00b3\u00a0http:\/\/www.racked.com\/2014\/5\/28\/7596421\/niche-social-media-celebrities<\/p>\n","protected":false},"excerpt":{"rendered":"
How digital and social media have spawned a new generation of advertising agencies, and why companies like Niche have been able to capitalize.<\/p>\n","protected":false},"author":100,"featured_media":611,"comment_status":"open","ping_status":"closed","template":"","categories":[658,263,76,261,259,260,142,262,7,22],"class_list":["post-610","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-advertising","category-agency","category-digital","category-instagram","category-niche","category-social-media","category-twitter","category-vine","category-winner","category-winning"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-and-losers\/","yoast_head":"\n