Ted Murphy, CEO of IZEA Worldwide, was recently a guest on Benzinga's All-Access.
IZEA Worldwide is a marketing technology company providing software and professional services that enable brands to collaborate and transact with the full spectrum of today's top social influencers and content creators. The company serves as a champion for the growing creator economy, enabling individuals to monetize their content, creativity, and influence.
Murphy spoke about the powerful, bespoke connections influencers can make with their audiences and the value that creates for brands.
IZEA Worldwide is a marketing technology company providing software and professional services that enable brands to collaborate and transact with the full spectrum of today's top social influencers and content creators. The company serves as a champion for the growing creator economy, enabling individuals to monetize their content, creativity, and influence.
Murphy spoke about the powerful, bespoke connections influencers can make with their audiences and the value that creates for brands.
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NewsTranscript
00:00Good morning, Ted. How are you? I'm doing great. How are you? I'm doing well. I hope
00:09you enjoyed my credit card arbitrage a little, you know, trick there. Oh my gosh. There's
00:13all sorts of things going on. I heard you talking about joining Hair Club for men. It's,
00:19you know, yeah, there's a lot happening, which is why I was like, I got to get this interview
00:23going or it tells Ted's going to be like, you know what? I don't want to talk to this
00:25guy. But no, man, I'm excited. We have some great conversations and there are some things
00:30that you said were in the pipeline, which I want to kind of recap for us here today.
00:33But for the folks at home that might not be familiar with you and the company, give us
00:37a brief overview. What is it that IZEA does? Yeah. IZEA is a MarTech company. We focus
00:42on influencer marketing and custom content. And what we do is we match brands with content
00:49creators. So those could be influencers who have very big followings. Those could be smaller
00:54people who have niche audiences, or those could just be people that produce outstanding
01:00content, whether that be photos, videos, or text. Is that called as a UCG? Is that? Yeah.
01:06Yeah. Well, people throw around different terms. Some say UGC, some say CGC. There's
01:13some different opinions around that, but yeah, that's actually a huge part of this industry
01:17right now is people are really focusing on that, on that UGC, both for organic content
01:23as well as paid amplification. You know, I broadcast e-sports and one thing that I
01:28love to say is bring your game and not your name. And the reason I say that here on this
01:32show is because with those creators that are great at what they do, their following may
01:36not be that great, but their content is great. And they still get opportunities to get connected
01:41with companies such as yourself and brands that are looking to use your content to further
01:45the sponsorships and brand opportunities as well. So tying it right back in, what makes
01:50like the influencer marketing aspects so effective in today's world?
01:53Well, I think it's just what you were talking about right there is like you, you have these
01:58unique connections between content creators and their audiences, and they can be incredibly
02:04niche, whether people are talking about games or watches or a particular type of, of fashion
02:11and the brands want to be able to connect with those creators to then reach that audience.
02:16And what's so cool about these campaigns is that every single piece of content that is
02:21created is really talking to the specific audience of that individual influencer.
02:26Now, you know, I want to ask a question. I want to go back to share buyback information
02:29here shortly, but how does IZEA streamline the process of connecting the influencers
02:34and brands and kind of maintaining those relationships as well? Because at the end of the day, you're
02:38a business.
02:39Yeah, it's really a, it's a combination of technology and people. I mean, we do this
02:44all day, every day. Influencer marketing is our business. And we have developed proprietary
02:51technology and data sets that allow us to source influencers, negotiate terms, streamline
02:58content creation so that brands can really scale these campaigns. So just to give you
03:02an idea of what type of scale we're talking about, a brand could get a thousand content
03:08assets produced in a single week through our team and our platform.
03:13Wow. That that's a lot for sure. You know, so many, I used to, I actually told this to
03:18my cousin who now has like a nine-year-old daughter. We grew up in a world where it was
03:23like, Hey, I want to be a doctor, lawyer, engineer. I want to be an astronaut. I want
03:26to be a lawyer. I want to be whatever. Right.
03:29I want to be an influencer.
03:30I want to be an influencer. Right. It's insane how that's the world that we're going with.
03:36And there's, I mean, Kai Sinette is one of the ones that I know is quite popular. He's
03:40always on my timeline. He's now possibly going to work with Kevin Hart in a movie.
03:45So there's so many individuals. I think the stats somewhere I saw was over half of working
03:49age people say that they would quit their jobs immediately to become an influencer.
03:54Why do you think it is so attractive? And do you think there's still room for this or
03:58do you feel like it's saturated or what are your thoughts?
04:01The reason that people are so excited about this is that they get to follow their passion.
04:06So if they were able to create content about the things that they love every day and they
04:11get a little bit of fame and fortune that goes along with it, I mean, that's, that's
04:16the dream job. So, you know, people used to dream of being even a rock star or, you know,
04:22a movie star. And now what we're seeing is that you don't necessarily have to reach that
04:28traditional definition of celebrity and you can still have a massive reach. And in some
04:34cases, an even bigger reach through the social platforms.
04:38Yeah. Let's talk about, you know, I saw an article where you're making moves with share
04:44buyback acquisitions. Give us a little bit of insights on all of those and what's happening
04:48with the company there.
04:49Yeah. Let me kind of back up to last year and what's been happening at IZEA over the
04:55past 12 months or so. We wound up parting ways with a big customer who had an outsized
05:01impact on our revenues, upwards of 25% in a given quarter. And we've been basically
05:08moving our way through that over the past year. We've now gotten into a position where
05:13we've got a lot of momentum at our back. If you look at Q2, our bookings were up 40% year
05:19over year. And what's really important to us is really diversifying the customer base.
05:25So make sure that we're not dependent on, while we love those big customers, we don't
05:30want to ever be really dependent on the revenue from one of those big customers. We've been
05:35putting a lot of emphasis on diversifying that customer base. Part of that is, a big
05:41part of that is organic. Upward, more than 90% of the growth that came in Q2 was organic
05:48growth on the booking side. But we're also looking at acquisitions and those acquisitions
05:54are focused on two different things. One, being able to expand our service offerings
05:59into different niches. And two, being able to expand geographically. So we recently did
06:05two different acquisitions. One was in the talent management space. And that was through
06:09our acquisition of 26 talent that happened last month. And then we just did another acquisition
06:17that just closed last week. That was the Ryman Agency. And they're focused on talent and
06:24facilitating these connections, typically with higher end celebrities and sports talent,
06:30but that's in the US.
06:31Well, I mean, if there's any way to kind of show a vote of confidence, it's to have a
06:35shared buyback program. Because you're saying, Hey, we believe we're not priced the way that
06:40we should be. And we believe in the future growth of this company. And so far, it does
06:43look like things have been kind of working out. Where do you kind of see influencer marketing
06:48in say three years? What's kind of like the next big thing, especially because folks are
06:51talking about possibly a TikTok ban, this, that, and the other. Because again, we now
06:56live in a world where influencers are for ads that are being played on TV. Like Drewski
07:01is one of the ones that was here. I remember, I remember the guy's name, but he was being
07:05made fun of because of his style of TikToks. And the NFL saw that, Hey, yeah, you're cringe,
07:10but you're getting so many views. Come join us for this draft ad run that they did with
07:15them as well. So like, how much bigger can this possibly get in say three years?
07:20I don't think that we are slowing down in any way, shape, or form. I mean, I can't predict
07:25what's going to happen with TikTok. TikTok, I surely hope that they are not banned. But
07:31we also know that as platforms have come and gone in our space, I mean, when you think
07:35about it, we started with MySpace, right? So we have seen a tremendous amount of change
07:40in this industry. What we know is that the influencers are going to always find a new
07:46platform. And so whether that means those creators migrate to YouTube shorts or to Instagram
07:52reels or to some other platform, if that happens to TikTok, which again, we don't, we don't
07:58hope that that happens, right? The creators are always going to find a platform for their
08:03voice. I mean, I know on our end, we have a strategy for TikTok. We have a strategy
08:07for shorts. We have a strategy for reels, right? So we always are looking for, Hey,
08:11what's working best in different types of areas. My producer friend, he actually watches
08:18YouTube shorts on his desktop, which I think is the weirdest. It is one of the weirdest
08:24things that he does outside of his haircut, but it just doesn't make sense to me.
08:28Oh my gosh. I have a 12 year old son and he watches it on our big screen TV. So, you know,
08:35people have all different types of viewing habits.
08:36And you know, I'm just happy that you're on or else he would have muted me a long time
08:40ago, but you know, I want to turn the floor over to you. We've talked about the share
08:44buyback. We've talked about what you guys are doing and where it might be going as well.
08:49Is there anything else that's kind of happening within the company or in the pipeline that
08:52you think our viewers and possible investors should be aware of?
08:57We've made a couple of announcements about different new features in our platform. Probably
09:03one of the biggest ones is the announcement of Izzy, which is our AI assistant that is
09:08specifically tuned towards influencer marketing. So for over a decade now, we have been storing
09:14over 2.7 billion pieces of content and we've been indexing that and enriching that content,
09:22but haven't had a really, really had a great way of being able to surface all of that in
09:28a tool that was incredibly intuitive for our end customers. So we recently announced Izzy
09:35at the Cannes Film Festival or Cannes Festival for Creativity. And we are in beta testing
09:43right now, closed beta testing. And we're going to be rolling that out here in the next
09:48couple of weeks. So we're super excited about that and what that's going to open up for
09:52our customers. It allows them to do things that we just have not been able to do in the
09:58past. And so we're super excited about this. We know that these models are going to continue
10:02to evolve and the technology is going to continue to evolve. And the way that we're approaching
10:07that is not necessarily to invest millions or tens of millions, or in some cases, billions
10:12of dollars in building out these models, but taking advantage of what is unique to us,
10:17what is proprietary to us and leveraging some of the other technologies that are out there,
10:23whether that be through open AI or open source platforms like LLAMA.
10:30I made a poor decision two weeks ago and I think I went through like a sonic drive
10:33through and the drive through person was AI. And I couldn't really tell until I pulled
10:38up at the door and I was like, you don't sound like, nevermind, can I just have my extra
10:43sauces? But I think I did an interview maybe about six months ago and I asked the question,
10:48hey, where do you see AI technology in three years? And he told me, dude, forget three
10:54years, ask me where it's going to be in three months, because that's how it's ever evolving.
10:57And I'm sure that's something you're spending time and resources on is, hey, what's the
11:00latest technology? How can we amplify what we're already doing by installing that into
11:06our resources and our structure and everything else as well?
11:10Yeah, that is actually been a big part of what we've been doing on the software side.
11:15Last year, we rolled out a suite of generative AI tools to our creator base and the creators
11:21are now licensing that software from us. It's actually the fastest growing part of
11:26our SAS customer base. And a lot of that has been focused on photos and texts to this point.
11:34But what we're seeing is that the video models are getting better and better all the time.
11:40And when you look what that could be a year from now or two years from now, five years
11:45from now, I don't even know what it's going to be crazy, but it's advancing so fast. And
11:51when you think about what type of advantages that provides for creators, it allows them
11:57to very quickly prototype what a storyboard, what a potential activation could look like,
12:07all the way to producing the final output for something that they may not even be able
12:11to do any other way. So if they're doing something with some sort of unique IP where they need
12:18to be with a video game character or movie character or something like that, and they
12:23want to be able to generate all that just through a prompt, that is the future that
12:27I see.
12:28It makes perfect sense. And I know you talked about your finances and how you had a 25%
12:33client that left. You're now building that back up. You're doing the share buyback as
12:36well. We obviously do this for a viewer. And I had a question in the chat about making
12:40profits and profitability. Any insights on that one?
12:44Yeah. I mean, we are still very much so focused on growth, top line growth, but that is with
12:50an eye towards profitability. So what I had shared out in our last earnings call is that
12:56our three-year goal is to get to $73 million, I'm sorry, $76 million in revenue and be at
13:04a point of sustainable profitability at that point.
13:06Awesome. Well, I'll tell you what, I'll have my people reach out to your people. Maybe
13:10I can get on the platform. I don't have people, it's just me. So I'll connect with you after
13:13the show. But Ted, always a pleasure, man. Thank you so much for hopping on today.
13:19Thank you. Appreciate it.