Twitter Buys Ad Network “Niche” to Help Vine Users Make Money
Twitter has reportedly completed the acquisition of Niche, an ad network that connects advertisers with social media stars. Twitter has paid around $50 million in cash and stock as part of the deal, and received additional incentives like employee-retention, according to various reports.
The exact amount of acquisition deal is not known. However, sources familiar with the deal told Business Insider that Twitter paid between between $45 and $60 million.
Niche was cofounded by Rob Fishman and Darren Lachtman in late 2013 after the duo noticed that people were moving towards social platforms like Instagram and Vine, and brands were interested in exploiting this opportunity to reach those active users.
Observing this trend, Fishman and Lachtman started connecting brands with influential people online. Vine and Instagram celebrities promote the products of advertisers in a natural way, and get paid huge amount of money regardless of their age.
Vine star Cody Johns, a 24-year-old aspiring actor in Los Angeles, made $20,000 through a campaign he ran with Niche. Another Vine star Lauren Giraldo who is just 16 years old, makes about $2,000 per sponsored Vine.
Niche was about to raise a new round of financing at a valuation that was about $50 million when Twitter made the move on Vine. The company was working with 50 advertising clients as of March. They were charging brands between $15,000 and $150,000 a month for their services. These services were focused on running ad campaigns of the brands on Instagram, Tumblr and Vine.
An investor of Niche said the company was on its way to generate more than $10 million in net revenue this year.
Thanks to the deal, Twitter is going to enjoy a large part of this revenue which will significantly increase Twitter’s annual revenue as well.
Twitter has made the news official in a blog post which also features some Vines about the work Twitter has done with Niche.