Media personality Jules Lund yesterday announced the official launch of his startup TRIBE via a podcast with Editor Alex Hayes from marketing publication Mumbrella. Set to launch this week, TRIBE is a micro-endorsement platform that connects brands with ‘everyday influencers.’ The startup has also announced a seed funding round of $750,000 from a group of unnamed strategic investors – reportedly heavy hitters from the Australian media space.
The business of connecting these two parts of the market has existed for a while at the top end of town, and in a way that is not quite as scalable as a technology platform. Agencies like The Remarkables exist specifically to connect large companies with influential bloggers in order to create customised content endorsing their products and services. Then you have YouTube celebrities like Troy Sivan, who commands audiences of over 3.9 million followers, partnering with brands like Optus to sell product, while Lund himself has, as one of the ‘faces’ at Southern Cross Austereo, been sold as an ‘add-on’ by the sales teams to create additional bespoke content for clients for his and their social media channels.
In such a connected world, it has never been easier to be influential within an industry. Just look at the Australian startup ecosystem as a perfect example: there are many people in the space from whom the wider ecosystem and indeed the media hangs off their every word and considers it gospel. These people inspire us to do things like purchase particular products and become members of up and coming tech platforms.
In the podcast, Lund explained that the way TRIBE identifies an influencer is by looking for someone who has 5,000 or more followers on whatever their social media platform of choice is. While some people may find that a 5,000 minimum is a little on the small side when it comes to marketing, the opposite is in fact true. According to research by Technorati, over 54 percent of people agree that the smaller the audience, the more influential someone is within that space.
In terms of the addressable market size of the niche space in which TRIBE intends to play, there are no hard numbers that really exist. However, social media advertising is worth around $151 billion globally.
If we look at the fact that in the United States around $40 billion was spent on online marketing last year and of that, 10 percent was spent on social channels with approximately 6 percent of that spent specifically on influencers, this equates to roughly a $240 million addressable market in the States. Applying the same formula to our $4.6 billion yearly spend online here would give TRIBE a local addressable market of $27.6 million.
However, I feel that Lund and his team may be underestimating exactly how many players are actually in this space at the moment. There is certainly going to be some tough competition in the race to own this sector, especially because TRIBE is not the only one to have backers from major Australian media companies.
As of right now, the more notable startups exploring this idea of micro-endorsement via social media channels and custom content creation globally includes Exposely, InstaBrand, Influicity, Snapfluence, Famebit, and of course, fellow Australian startup FanFuel.
Although FanFuel right now only connects brands to influencers that are athletes, would-be competitors should not take lightly the fact that the platform is backed by Telstra via the muru-D accelerator arm of the company. The founders have also been busy trying to raise funds in the United States.
The athletic focus may seem like it leaves room for others to replicate its model across other verticals, but by choosing to focus on what they know best – sports – if FanFuel does nail that market, then it won’t take much to begin introducing already loyal brands to other types of influencers down the track if they choose to.
Admittedly, the exact same thing could be said about Lund’s TRIBE. He is certainly a familiar face to brands and will have next to no trouble attracting influencers on board the platform to kick things off to a nice and strong start – not to mention the fact that he already has the funding and platform to push hard in the early days for users. These are advantages most startups would kill for.
Right now TRIBE is going with a clip-of-the-ticket revenue model, taking 10 percent of all sales through its platform, with the minimum spend for brands set at $1,000. According to Lund’s statements yesterday to Hayes, the company is currently in a public BETA phase and is spending all of its money before re-raising additional seed funding towards the end of this year.
Featured image: Jules Lund | Source: Mumbrella