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On October 11, 2016, Google acquired FameBit for an undisclosed amount (rumored to be $15M). FameBit, an influencer marketing platform, previously raised an undisclosed seed round in September 2013 and subsequently $1.5M in another seed round summer of 2014 from Third Wave Digital (and its founder Allen DeBovoise), Silicon Valley venture capital firm and startup accelerator 500 Startups, and Science (also an investor in Dollar Shave Club and DogVacay), among others.
Google’s FameBit purchase is a significant event for the influencer marketing industry—the tech giant’s acquisition of its first influencer marketing outfit not only marks the industry’s immense growth and popularity, but also influencer marketing‘s viability as a core strategy and channel for advertisers, social media apps and networks, and its ecosystem of millions of social media influencers, fans, and followers—all things Google is keen to be a part of.
Based in Santa Monica, FameBit was one of the earlier influencer marketing companies facilitating YouTube video sponsorships between advertisers and YouTube content creators (also termed “YouTube influencers” or “YouTubers“) registered/available on the platform.
With their FameBit purchase, Google seeks to provide brands on YouTube another way to advertise on its video-sharing network with YouTube influencers “YouTubers,” content creators, vloggers, and other social media influencers through influencer marketing campaigns including product placements, sponsorships, and promotions. While the influencer marketing space and YouTube influencer ecosystem are intricate, FameBit’s platform software aims to automate certain processes necessary for launching a campaign and provide performance data and metric insights.
In YouTube’s official blog post, Google notes that the top 100 advertisers on YouTube have increased ad spend by 50% in the last year alone. For Google, the growth in branded content opportunities between advertisers and YouTube’s breakout social media stars fueled their acquisition of YouTube influencer marketing platforn, FameBit.
As Reuters describes, the Google-FameBit combo “would help increase the number of branded content opportunities available, bringing more revenue to YouTube.” For FameBit, the acquisition makes sense given Google’s (YouTube’s parent company) relationships with both brands and the entire YouTube network:
In recent years influencer marketing popularity has skyrocketed (Google Trends). Google’s purchase of FameBit (its first influencer marketing acquisition) demarcates the importance of influencer marketing, its effectiveness, and also its present and forthcoming advertising spend. According to our 2015 forecasts, influencer marketing is to be a $5B to $10B industry in the upcoming 5 years. As Ben Popper of The Verge writes, Google’s acquisition of FameBit is “economic activity being dragged from the shadows” and that the tech giant “sees the writing on the wall, and wants to own a piece of the pie.”
As noted in WSJ, Google does not currently receive a percentage of branded content deals and/or influencer marketing sponsorships occuring on YouTube, however with FameBit’s acquisition, it’s expected that alongside new YouTube influencer advertising options Google will stand to make a percentage of these campaigns facilitated through FameBit’s software and also do the same across other social channels.
Though FameBit launched as a YouTube-focused platform, it has since expanded its offerings to include other popular social channels including Instagram and Vine. Google stands to gain targeted insight into an increasingly complex and competitive industry (Mashable), provide value to both advertisers and creators, and ultimately stands to “get a piece of the action themselves” (The Verge).
Google mentions its FameBit purchase will not impede how other existing influencer marketing entities do business on YouTube stating:
For now, FameBit will continue to operate as is without restructuring or relocations (TechCrunch). For more information on how FameBit works, please see our in-depth review article here, our list of the best influencer marketing tools & platforms, and how platforms such as FameBit are utilized by agencies.
Related Post: The Pro’s & Con’s Of FameBit—A Platform Review
Ariel Bardin, Google’s VP of Product Management, states that their acquisition of FameBit does not affect how influencers or brands conduct influencer marketing campaigns and branded content sponsorships however, Google’s influencer marketing initiative comes at a time when YouTube creators are facing stricter disclosure policies (where payouts from YouTube’s existing Partner Program, a revenue split derived from enabling ads on a creator’s videos, may be demonetized for improper disclosure of branded content and/or advertiser “unfriendly” content) and multi-channel networks “MCNs” are increasingly competing for branded content deals on YouTube (Mashable).
Unlike MCNs, most influencer marketing agencies do not manage or maintain a roster of talent, instead working with advertisers across all social media channels and influencers to create, launch, and manage the best possible campaigns and activations that accomplish brand KPIs. Many of these agencies leverage tools and platforms like FameBit as part of their processes and are well-versed with both the strengths and limitations inherent with influencer marketing software and platforms.
As mentioned by its CEO, FameBit’s platform caters to mid- to long-tail creators (an influencer must have a minimum of 5,000 followers on either YouTube, Tumblr, Twitter, or Facebook to register on the platform) meaning that many of the top and high-reach YouTubers, content creators, and channels are not available to work with for advertisers. These types of influencers opt to bypass platforms altogether and instead work direct with management agencies or established influencer marketing agencies.
In order for Google to find longterm and overarching success with many brands and advertisers, FameBit may need to shed its tradition of catering primarily to mid- to long-tail content creators and begin attracting those top-tier influencers who have previously shunned working through platforms.
Related Post: What Is A YouTube Multi-Channel Network (MCN)?