A startup that automates the selling of “influencer” links for use by bloggers — headed by a 19-year-old Stanford student — has scored a $1.5 million seed round.
The 14-person company, NeoReach, has developed a platform that rewards people on a pay-per-click (PPC) basis for sharing links through blogs, social media or other means. It is emerging from a trial period and formally launching this week.
Bloggers and other “influencers” choose a product or service from the NeoReach platform that they’d like to promote through their blog, their social networks, or other avenues. They get a link to that offering from NeoReach, and the company pays them a fee per click. Leimgruber said the click’s entire fee is currently paid to the promoter as the company builds a user base. The eventual cut for NeoReach. he told us, might be 25 percent.
The advertisers paying for the clicks set the cost-per-click rate.
“We are looking to be the AdWords of influencer marketing,” CEO and co-founder Jesse Leimgruber told VentureBeat. He and his brother P.J. are already veteran serial entrepreneuers, having co-founded the ongoing and reportedly profitable digital marketing firm Rank Executives and neon hat retailer RageHats, in addition to NeoReach.
The seed round, which closed last month, was led by Splunk-founder Michael Baum’s Founder.org, which focuses on student-led startups. Participating investors included Expedia founder Greg Slyngstad and former HP COO Bill Veghte. An angel round in January landed $300,000.
The company says that over 10,000 users already employ the NeoReach platform and that it has delivered more than half a million clicks. This includes about 4,200 bloggers, 800 celebrities and influencers, and about 5,600 local influencers and “everyday people.”
Bloggers or other influencers are not required by law or NeoReach to mention that they are getting paid to promote a linked offering.
But Leimgruber noted that they’re also “not required to be positive” in their mention. There has been controversy about some bloggers being paid to write specific posts without disclosing the sponsorship, while here they are free to write what they please. Of course, being negative would lead to fewer clicks.
He also pointed out that users are given a choice of products, so they could select ones they are enthusiastic about.
Influencers who use the platform include tech bloggers Chris Pirillo and Techno Buffalo, pro surfer Anastasia Ashley, ex-American Idol contestant Kayden Stephenson, and “Vine Stars” Weekly Chris, Joey Salads and Claudia Romani.
The influencer link market is not a new one, with such competitors as TapInfluence, Izea, Niche.co, and GrapeStory. But Leimgruber said that those tend to be agency models or account manager-heavy, while NeoReach is an automated platform.
And he believes enough in the company’s approach that he’s “most definitely dropping out” of Stanford next quarter.
How do his parents feel about that?
“Neither of them went to college,” he told us. “They’re not thrilled [and] feel like I’m throwing it away.”
But “Stanford has a great policy of always letting you back,” he said. “Right now, I need to put all the eggs” in this basket.