Welcome To The Long Tail Of Social Media Marketing: Linqia Exits Stealth Mode With $3.5M Series A From Javelin, Esther Dyson

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There have been a lot of social marketing efforts aimed squarely at making content go viral, but equally there seems to be a rising trend, fuelled by big data analytics, of brands (and social media sites themselves) looking at ways of targeting very specific groups of users who are the most likely to respond. Linqia, which has developed a platform to deliver highly targeted “stories” to specific audiences, is among the latter group. The company has just exited stealth mode with a $3.475 million Series A round behind it, led by $2.5 million from Jed Katz of Javelin Venture Partners, along with participation from existing angel investors including Esther Dyson, and a plan to transform how social media marketing is done today.

The news of the funding was first made public in an SEC filing last week, which noted that Linqia is actually raising $4.475 million. Maria Sipka, the co-founder and CEO, says the remaining $1 million is likely to be closed in the next couple of weeks. The total raised by Linqia to date is $4.4 million.

The idea behind Linqia is that brands are increasingly turning to social media content to promote themselves online beyond display- and search-based advertising. So Linqia helps identify audiences of “passionate enthusiasts” who would be the most receptive to this content. The receptiveness comes from the fact that users trust messages more when they are created by their regularly visited special-interest sites.

Or so the thinking goes: It could be that this kind of marketing will eventually go the way of display ads: the more these kinds of stories get placed in a stream, the more users will overlook it.

I thought the idea of getting people to write about your brand for money sounded a little bit like advertorial. This is Sipka’s response:

“We don’t refer to the content as advertorial but rather curated sponsored content. In most cases the content is not about writing about a product or service – it’s about a topic or theme that the community leader writes a story about weaving in the brand content assets. It’s a shift from product reviews to storytelling. And from brand side they see it as content marketing.”

Each resulting relationship, she notes, gets disclosed by the blogger, either at the bottom of the post or with a #spon hashtag. “Community leaders have every reason to disclose,” she says. “It actually gives them credibility and recognition to be associated with a brand. They want to make it known.”

Linqia says that it has so far identified more than 100 million unique “interest communities,” reaching 1 billion “enthusiasts,” to receive those messages. These are blogs, bloggers, Pinterest personalities, and more who churn out content either for a living or on the side, and want to monetize it beyond straight advertising, which relies on massive scale to actually pay.

And as for the messengers: although Linqia’s been in stealth mode, it’s already found a base of clients for its services. Sipka says that some 20 brands, including Coca-Cola and Clorox (and some other big ones I’m not allowed to mention here), have been using its service already.

So far, the stats seem to bear out Linqia’s theory of supertargeted marketing. Sipka notes that the average click-through rates for display ads today are around 0.05 percent. Facebook’s Sponsored Stories appear to be about double that. But Linqia’s stories, she says, is 2 percent. On a smaller-reach campaign the engagement can be 40 percent, she claims. Through that, “Then it goes viral,” she says.

The hole in the market that Linqia is targeting is the fact that big brands are not necessarily the best at figuring out how to reach out to targeted communities in the mass market.

“Brands these days can only manage 10-15 communities,” she says. “But that overlooks the mid- to long-tail.”

The Linqia platform helps match brands and stories to those smaller but still influential communities. This is an area also being targeted by companies like Say Media and Federated Media — the difference being that while Linqia lets blogs and bloggers sign up to its platform to monetize their businesses, it also has a turnkey solution to identify the most active users in a particular category. It then contacts them to share a particular story.

Linqia claims that it can do this much more efficiently: campaigns that used to take weeks to plan and execute can now be done in a matter of minutes, offering some kind of cost savings, and disruptiveness to some of the established practices in the digital marketing industry. Plus, unlike a banner ad, the content remains — and Google indexes it.

Apart from the fact that Linqia’s already picking up some business, another reason why Javelin and others have invested in the company may be because of the two founders, who have both cut their teeth in social media before. Sipka is the former COO of the European business social network Xing, and her co-founder, Nader Alizadeh, had also co-founded Lithium Technologies, the developer of large-enterprise social CRM services such as forums and blogs, as well as analytics that run across these and social networking sites.

Sipka says that she’s been thinking about the idea behind Linqia for years — and the startup itself first emerged in Europe in 2009 and later incorporated in the U.S. November 2011 — but it may be that now is the time that opportunity is big enough to put that idea into force. “Influencer outreach has only become a viable thing in the last year or so,” she notes. “We were waiting for the right time.”