I’m an avid viewer of the popular BBC business programme, Dragons’ Den, where entrepreneurs pitch a percentage of their small business to five top investors.
The best part of the show is when the dragons give the applicants a good grilling to identify flaws and weaknesses in their proposition before either offering investment terms, or (usually) saying “…that’s why I’m out”, and leaving the entrepreneur to walk away with nothing. These probing questions usually concern market potential, pricing, unique assets, margins and the outlook for operating profit.
All these questions and more surfaced during my first meeting two years ago with Tim Armoo, the super-bright co-founder and chief executive officer of the influencer marketing company, Fanbytes. This is a young man who created and sold his first small media company at the age of just 17. He soon teamed up with Mitchell Fasanya, who also sold a data analytics enterprise at the age of 19, and Ambrose Cooke, whose Imperial College first-class degree work delivered the very algorithm which powers Fanbytes’ influencer identification system.
And they’re all still aged 25 or younger.
Having led the Internet Advertising Bureau from 2005 to 2017, I had the privilege of being part of the digital media revolution. Within that 12 year period Internet advertising grew from 4% to over 50% of total UK ad spend. But more importantly the fastest growing and winning-most formats are now social media and video, and the more savvy and demanding clients expect a measured ROI on their media spend - which is not always that straightforward.
I could see Fanbytes had the potential to hold a lot of very important cards. The three co-founders started out forming their proprietary network of influencers on Snapchat, to bridgehead the entertainment sector using their own very nifty ‘sandwich video ad’ product. Typically the influencer might big-up a new movie and encourage the viewer to swipe up to view a trailer. Job done for Fanbytes! But the key point is, gaining performance data for campaigns on Snapchat at that time was nigh on impossible, so Fanbytes’ unique offering was appealing.
Needless to say, I became a minority investor during the second round of funding, and I’ve since upped my equity in a subsequent round (which also attracted the judicious and very well connected Nigel Morris, former CEO of Dentsu Aegis Americas). With our combined 70 odd years of advertising experience, Nigel and I regularly impart advice on positioning and managing this rapidly growing business – and we’ve opened a few doors along the way.
So I’m delighted that, two years on, Fanbytes’ international client portfolio extends to Sony, Apple Music, Deliveroo, McDonalds, Paramount and the UK Government, with product offerings across Instagram, Snapchat, Tiktok and YouTube.
Of course, influencer marketing does have its challenges - for example ensuring we always follow ASA guidelines - but there’s no doubt the sector is still enjoying exponential growth; up 83% in the US and Canada according to research by the Points North Group.
Word of mouth has always been top of the list for trust and efficacy for brands, but it used to be so hard to achieve in any measurable way. Now, thanks to social media, that erstwhile rare medium has been supercharged to become properly scalable. During the next six months we’ll see more and more major advertisers move from being occasional experimenters to becoming regular, experienced practitioners of influencer marketing.
I believe we’ll also see media spend concentrated on micro-influencers, with followers in the tens of thousands rather than millions. It’s a proven fact that the specialist micro-influencer generates higher engagement from their content and thus represents better ROI for brands. And as we move towards 2020 we’ll see the emergence of micro-influencer networks, across verticals like fashion, entertainment and travel (just like the original ad networks in the days before programmatic).
I’m proud to say the guys at Fanbytes are all over these trends, so I’m uber-confident about the outlook for the business and the talented team running the show.
On Dragons’ Den - even when there are some weaknesses in the product - if the entrepreneurs display a charismatic personality and a determination to succeed, they often win investment. I think I must have hit the jackpot with Fanbytes: we have a product and business plan to die for, and three co-founders who exude personality, charm and a hunger to win big.
So for these reasons, I'm in.
Guy Phillipson is the chairman of JICWEBS.org and the former chief executive officer of the Internet Advertising Bureau UK.