If you’re one of the 1.12 million followers of the @HistoryInPics Twitter account, which posts delightfully obscure pictures of historical subjects and events, you may have asked yourself, “Are they making any money off this?”
The answer is yes. Quite a bit of money. The account is one of 200 across Twitter, Facebook and Instagram run by Social Trends Media, a young company headed by CEO Eric Damier, 30, and cofounders Xavier Di Petta, 17, Kyle Cameron, 19 and Paul Pliesovsky, 36. After launching during the last week of November, they did $800,000 in sales in December, then another $120,000 the first week of January before pulling back to work out some technical kinks. Once they relaunch in full force—Damier is aiming for next week—they hope to do $1.2 million in March.
So just how exactly does one make money off of a popular Twitter account? Social Trends’ first line of business is straightforward. They use the accounts to drive traffic to a company-owned website, Kulfoto.com, then rake in the ad-dollars. Via @HistoryInPics, for example, the company plugs Kulfoto slideshows like 13 Ridiculously Offensive Vintage Advertisements. On @RealTalk, an account with 614,000 followers that caters to teenage girls, they might post a slideshow of Kardashian sister Kendall Jenner and pop star Harry Styles skiing together. People click, they make money.
By keeping the Kulfoto plugs relevant to each account and timing the content to maximize engagement—i.e. Katy Perry slideshows on the day of the Grammy’s, JFK pics on his birthday—the company boosts traffic and revenue.
Damier says that the company currently maintains an audience of 300 million across its social media accounts. The list of Twitter accounts he passed along adds up to about 100 million followers, so the bulk of the company’s audience must come from Facebook pages, which he declined to disclose. Facebook has shutdown some of the company’s pages in the past, and the founders are currently trying to become an official reseller of Facebook ad inventory. So they’re laying low on that network for now.
On a good month, the company herds about 25 million visitors to Kulfoto. (Alexa has them closer to 4 million this month.) This business generates 70% of the company’s monthly revenues.
Part of Social Trends’ trick is that they only own a handful of the 150 Twitter accounts they manage. The rest are run mostly by young entrepreneurs looking to make a buck off their audiences. In exchange for some coaching and an undisclosed chunk of ad revenue, the owners allow Social Trends to use their accounts to drive traffic to Kulfoto. Social Trends employs four full-time “content curators,” while the bulk of the upkeep is left to account owners.
This line of business will hopefully fade in importance as the company’s new product, Social AdX, gains traction. The SaaS product allows advertisers to manage campaigns and bid on ad placements across the company’s network of social media accounts. “That’s the billion-dollar business,” Daimler says.
Early clients, which include agencies running campaigns on behalf of Coca-Cola, The Voice and textbook rental company Chegg, use the technology to filter Social Trends’ accounts for those that best fit their target audience. Using Twitter API’s and third-party data, Social AdX allows advertisers to filter accounts according to age, location, gender, and interests like hip-hop and celebrities. Afterwards they bid on ad placement and timing, then track impressions and shares generated by their ads. If needed, Social Trends helps craft ad content to fit each account. “It’s very granular,” Damier boasts. “We can adjust each message based on the audience we’re presenting it too.”
Chegg, for example, paid for the below spot on Social Trends’ @CollegeStudent account, among others.
Customers pay anywhere from $10,000 to $250,000 for Social AdX campaigns, according to Daimier. For the current beta period, the average spend is $25,000 per client. Damier says that number should ramp up as the company gets more comfortable running large campaigns and clients get more comfortable using the platform after seeing results. The product will launch publicly in late April.
Damier, Di Petta and Cameron met over the Internet in 2009, when each was messing around with YouTube, trying to make a business out of building audiences on the site. (Mashable writer Seth Fiegerman presents a more detailed history of the company. Atlantic writer Alexis Madrigal also has a piece focused on Di Petta and Cameron.) They began working together in earnest to form Social Trends Media in early 2013. They roped in Pliesovsky, who created Kulfoto, around the same time. With the exception of Di Petta, who is still in high school in Australia, the team is moving to San Francisco this week to attend the 500 Startups accelerator program.
According to Damier, the self-proclaimed “old fart” of the group, Cameron is the team member most responsible for crafting the company’s popular accounts. “He’s like a viral psychic,” Damier says. Di Petta, who makes tens of thousands each month running a separate development company, Swift Fox Labs, focuses on business development and partnerships, while Pliesovsky runs tech.
The company is currently raising a $1 million+ seed round. They plan to hire more developers, and later, a sales team to go after larger advertisers.