Kristian Snow's inital analysis report of IZEA. From this research, Kristian can develop conclusions, fake personal bios, and actionable plans to improve the company. This was a college assignment, Kristian does not have an affiliation with the company.
1. INITIAL COMPANY RESEARCH of IZEA
Worldwide, Inc.
By Kristian Snow
Date: June 7, 2019
COMPANY INFO
The idea for IZEA began in 2004 with Ted Murphy. He observed a growing
marketplace for advertisers to bid native promotion deals with bloggers &
influencers. Through lots of manual research and bidding, he learned how this
emerging market worked and saw a need for a better infrastructure. IZEA began
with Ted’s startup known as PayPerPost. Payperpost was a platform for bloggers to
get paid for advertising products online. It faced heavy criticism from people who
questioned the morality of bloggers being paid to push products & services. As IZEA
describes it, “some were particularly concerned that this new sponsorship model
would dilute the Internet with inauthentic content” (IZEA, 2019c).
Although the concept did not catch on immediately, IZEA acted as an industry
leader in this new platform for ad marketing. After seeking to build a better brand
name and realizing the potential for a global marketplace, Ted then changed the
name of the company from PayPerPost to IZEA Worldwide, Inc. They revamped
their online marketing platform and gave it a new name: IZEAx. It is an online service
where brands, businesses & influencers can all find each other to share their needs,
negotiate bids, and check up on the progress. Early this year of 2019, they launched
IZEAx 3.0 to introduce a slate of new features, once again establishing themselves
as industry leaders for this niche.
IZEA has been in business for 13 years and currently has over 100 employees and
more than 800,000 registered users. (IZEA, 2019e) According to Yahoo Finance, the
company has been losing value since it went public in 2011. In its first year, it hit a
peak of $2600 per stock before plummeting to a mere $5 the next year. It has since
slowly declined to be worth between $0.50-$1 today (Yahoo Finance, 2019).
Investors continue to purchase stock and invest in the company in exchange for
services (IZEA, 2019e).
2. FINANCIAL POSITION:
• Year over Year: The stock price has dropped 59.46% in the last year of 2019, and
94.22% over the past 5 years (Yahoo Finance, 2019).
• Market Index Comparison: In comparison with the NASDAQ industrial average
for 5 years, IZEA in 2019 is below the average growth rate by 169.21%. While the
DOW has been steadily climbing, IZEA has been steadily dropping. (Yahoo
Finance, 2019)
• Net Income for 2019: -$5,718.407 USD (Yahoo Finance, 2019)
• Net Profit Margin for 2019: -28.45% (Yahoo Finance, 2019)
• Debt to Assets Ratio for 2019: 1.63 (Yahoo Finance, 2019)
BUSINESS LINES OF IZEA
Service line A: IZEAx Discovery (Online Research Tool)
Example of Service line A: IZEAx Discovery is a search tool for brand agencies to
find influencers and creators online. For a monthly subscription fee, the service
shares info about an influencer’s engagement rate, number of followers and
identifying keywords to name a few. Once the connection has been made, brand
agencies can use IZEAx Unity Suite to run their campaigns. (IZEA, 2019b)
Service line B: IZEAx Unity Suite (Online Marketing Tool)
Example of Service line B: IZEAx Unity Suite was designed to provide branding
agencies all the tools necessary to build a marketing campaign (IZEA, 2019f). It
works alongside IZEAx Discovery to bring in influencers and establish marketing
bids, schedules, and payment plans to name a few. Agencies can then establish
agreements and set promotional bids. These campaigns are integrated for
distribution across multiple social media platforms at once and allows them to halt
publication when adjustments need to be made. Once the campaign is underway,
they can measure the success of their efforts in a metric which brings in information
from all of these sources.
Service line C : Influencers & Creators (Online Marketing)
Example of Service C: IZEA invites anyone to create a free profile with them to
advertise their social media following to branding agencies. These online
influencers will be connected to branding agencies, publishers and others to
receive paid commission for marketing relevant services or products to their
followers (IZEA, 2019d). They are also given the option to create content for these
clients. Not only can they be contacted by these agencies, but they can also seek
out options through searches for bids and making counter offers of their own.
3. TARGET MARKET FOR IZEA
Example of Service line A:
• Geographic: United States, Europe.
• Demographic: Average age of 43.7. Men: 53.6% Women: 46.4%. Occupation:
Marketing. 83.4% White. advertising. Annual income levels between $40,000-
$80,000 USD. College degree in business or communication. Average salary of
$102,064 USD. (Data USA, 2019)
• Psychographic: Marketing & branding employees of high-ranking corporate
businesses. (IZEA, 2019a) Tech savvy, critical thinkers, problem solvers. (Data
USA, 2019)
• Benefits Sought by consumer: More efficient and informed research. Save time
& makes marketing easier.
• Usage Rate of consumer: Seasonal based on the business. During heavy
marketing seasons, it is used weekly. Otherwise it would be used about once a
month.
Example of Service line B:
• Geographic: United States, Europe.
• Demographic: Average age of 43.7. Men: 53.6% Women: 46.4%. Occupation:
Marketing. 83.4% White. advertising. Annual income levels between $40,000-
$80,000 USD. College degree in business or communication. Average salary of
$102,064 USD. (Data USA, 2019)
• Psychographic: Marketing & branding employees of high-ranking corporate
businesses. (IZEA, 2019a) Tech savvy, critical thinkers, problem solvers. (Data
USA, 2019)
• Benefits Sought by consumer: Increased distribution & ROI for marketing
campaigns. Increased workflow efficiency. Increase workload distribution
through commissions. Automation of systems. (IZEA, 2019f)
• Usage Rate of consumer: Seasonal based on the business. During heavy
marketing seasons, it is used daily. Otherwise it would be used for an hour once a
week.
Example of Service line C:
• Geographic: United States, Europe.
• Demographic: Age: 18-30.
• Psychographic: Creative, leader-influencer type. Social media savvy. Heavy
online presence with careers in blogging or creating innovative content.
• Benefits Sought by consumer: Increased Revenue. Access to clients. (IZEA,
2019d)
• Usage Rate of consumer: Weekly or bi-weekly.
DIRECT COMPETITION FOR IZEA
4. Name of Competitor Company 1: Pixlee
Competitor Company 1 Service: Influencer Marketing. (Pixlee, 2019)
Competes with your Service A: IZEAx Discovery
Name of Competitor Company 2: Mavrck
Competitor Company 2 Service: Influencer Marketing Platform. (Mavrck, 2019)
Competes with your Service B: IZEAx Unity Suite
Name of Competitor Company 3: Viral Nation
Competitor Company 3 Service: Influencer Talent Agency. (Viral Nation, 2019)
Competes with your Service C: Influencers & Creators
Ranking based on revenue from May 2019 reports:
Company #1: IZEA Worldwide Inc. - USD 24,438,000 (Zoom Company Information, 2019a)
Company #2: Viral Nation - USD 11,200,000 (Zoom Company Information, 2019d)
Company #3: Pixlee Revenue - USD 7,400,000 (Zoom Company Information, 2019c)
Company #4: Mavrck - USD 6,400,000 (Zoom Company Information, 2019b)
Additional Finding: Each company makes ~$200,000 in revenue per employee.
Mavrck has 32 employees (Zoom Company Information, 2019b). Pixlee has 37
employees (Zoom Company Information, 2019c). Viral Nation has 56 employees
Viral Nation - USD 11,200,000 (Zoom Company Information, 2019d). IZEA has 124
employees (Zoom Company Information, 2019a).
FINDINGS:
5. IZEA Worldwide Inc. started as many tech companies normally do: with a
revolutionary idea which pioneers new ways to network people and automate tasks.
Such companies are prone to collapse from rapid environmental changes, but IZEA has
survived for 13 years and adapted along the way. They were lucky that Ted Murphy’s
idea spawned early enough to establish the company before it became a red ocean.
Even then, since the beginning they have battled with financial debt & social backlash.
Despite these challenges, they are earning twice as much revenue as Viral Nation
(Zoom Company Information, 2019a, 2019d), they have a considerable market base of
+800K registered users, and an impressive and extensive client portfolio (IZEA, 2019a).
So where does this company stand given all these advantages & time? IZEA is a slowly
failing company that has almost all the resources that it’s ever going to get.
It is normal to expect start-ups in the tech world to be in the red, but IZEA is one for
concern. They have been innovating long enough to have merited a breakthrough.
Instead, their stocks are declining at a stable rate with an alarming debt to assets ratio
of 1.63 (Yahoo Finance, 2019). In other words, they cost more than they are worth.
Although revenue is increasing, they still lost 28% of profit this year. When looking at
market share, there are roughly 10.8 million marketers in the US according to DATA USA
(2019). Since many of IZEA’s 800k subscribers are likely comprised of marketing teams
in corporations, we can assume they already own a considerable market share. If we are
to expect a revenue bloom then, it would have to come from another source. IZEA’s
competition might yield some valuable insights here. All three competitors in this
analysis are considerably smaller and earning less than half as much revenue. Despite
this, all three companies & IZEA have relatively the same revenue to employee ratio: for
each employee, the company makes $200,000. This tells us that services might not see
exponential growth as the company grows. The labor force may have a correlation to
revenue. If this correlation is assumed true, it would mean that IZEA’s profits would have
to come through more efficient operational methods, not growing the market.
It is surprising how similar the competitor’s services, platform structure, and target
markets are, but what separates IZEA is the experience. The user-friendly atmosphere
found across their online interface welcomes potential clients with tutorials,
presentations, tours, downloadable files and more. This also reduces human interaction
through customer services or texting. The impression leaves a viewer with a sense of
friendly & efficient mass automation. Where IZEA uses warm colors and round, sans-
serif fonts to communicate user friendliness, the competitors such as Mvrck & Viral
Nation go for professional and bold designs by using dark colors and stiff, serif fonts
(Harrison, 2017). Their options focus more on leading people to one-on-one interactions,
and a more costly and human-interactive experience which might inhibit their company
growth. By looking at the competitors, we can assess that IZEA has done well to
differentiate but faces a very red ocean. IZEA’s long track history with Ted Murphy
shows it to be a slowly dying company that was originally given a blue ocean, plenty of
chances to innovate, and a significant market base.
REFERENCES
6. Data USA (2019). Marketing | data USA. Retrieved from
https://datausa.io/profile/cip/marketing
Harrison, K. (2018). What message does your logo convey? Forbes. Retrieved from
https://www.forbes.com/sites/kateharrison/2018/08/14/what-message-does-
your-logo-convey/#89a1d3f3741a
IZEA (2019a). Customers and clients including the world’s leading brands. Retrieved
from https://izea.com/managed-services/our-customers/
IZEA (2019b). Influencer discovery. Retrieved from https://izea.com/izeax-
discovery-overview/
IZEA (2019c). Influencer marketing. Retrieved from https://izea.com/history-
influencer-marketing/
IZEA (2019d). Influencers & creators. Retrieved from https://izea.com/influencers-
creators/
IZEA (2019e). Investor relations. Retrieved from https://izea.com/investor-relations/
IZEA (2019f). IZEAx unity suite. Retrieved from https://izea.com/unity-suite/
Mavrck (2019). Our platform. Retrieved from https://www.mavrck.co/our-platform/
Pixlee (2019). Pixlee solutions | social influencer marketing.
https://www.pixlee.com/solutions/influencer-marketing
Viral Nation (2019) Influencer talent agency | influencer talent managers | Viral
Nation. Retrieved from https://www.viralnation.com/influencer-talent-agency/
Yahoo Finance (2019). IZEA worldwide inc. – Yahoo finance. Retrieved from
https://finance.yahoo.com/quote/IZEA/
Zoom Company Information. (May 2019a). IZEA , Inc. Retrieved
from https://advance-lexis-
com.oclc.fullsail.edu/api/document?collection=company-
financial&id=urn:contentItem:5RPP-GHT0-C567-903S-00000-00&context=1516831
Zoom Company Information. (May 2019b). Mavrck. Retrieved from https://advance-
lexis-com.oclc.fullsail.edu/api/document?collection=company-
financial&id=urn:contentItem:5PYD-TX70-BR7W-13PW-00000-00&context=1516831
Zoom Company Information. (May 2019c). Pixlee Inc. Retrieved
from https://advance-lexis-
