As social networks like Facebook (NASDAQ: [[ticker:FB]]) and Instagram continue to add millions of new users each year, businesses are fighting to capture their attention by advertising across an array of digital platforms. One marketing technique that has become increasingly popular in the past decade involves paying social media “influencers”—users with lots of followers—to promote particular brands and products.
By 2023, companies will spend upwards of $5 billion a year on influencer marketing, according to Santa Monica, CA-based Mediakix. This type of advertising is thought to resonate more with audiences compared to some other forms because it’s designed to forge a personal connection between the viewer and spokesperson.
Lumanu, a startup based in the San Francisco area with a significant presence in Milwaukee, is developing software aimed at helping the posts of influencers reach bigger audiences.
“An image someone [uploads to] Instagram might originally get 10,000 impressions,” or views, says Tony Tran, co-founder and CEO of Lumanu. “Using our software, we analyze those 10,000 impressions and take that image and push it out to a million people.”
After an influencer puts up a new post, Lumanu’s tools comb through data on the number and types of users who have viewed and shared it, Tran says. The goal is to “get that content out to a larger, more targeted audience,” but still upload it using the influencer’s account. That way, the work Lumanu’s software does behind the scenes isn’t visible to users when they see the influencer’s post.
Investors think Lumanu is on to something. Earlier this week, the company announced it raised $1 million from investors as part of a seed funding round. Northwestern Mutual’s Cream City Venture Capital fund, which the Milwaukee-based financial services giant launched last year to support local startups, was among the funds and individuals that participated in the round. Others included 500 Startups, Gener8tor, Rightside Capital, and former Macy’s (NYSE: [[ticker:M]]) chief growth officer Peter Sachse.
Tran, who co-founded Lumanu in mid-2016 with head of operations Paul Johnson, says it plans to use some of the proceeds from the funding round to expand its seven-person team. Lumanu plans to hire engineers and account managers, Tran says. The startup’s account management team is in Milwaukee, while Johnson is based in Chicago and Tran works from the Bay Area, he says. (The Wisconsin connections are partially an outgrowth of Lumanu’s graduation from the Gener8tor accelerator program in late 2016.)
Lumanu, which has a roster of clients that includes Harley-Davidson (NYSE: [[ticker:HOG]]) and Unilever (NYSE: [[ticker:UL]]), also plans to use some of the new money to target prospective customers in the fashion, beauty, hospitality, and consumer packaged goods industries.
Tran and Johnson, reached by phone Wednesday, declined to say what Lumanu’s revenues were in 2017, or what valuation the startup received as part of the seed funding round.
This summer, Lumanu’s employees in Milwaukee will move from their current offices to Northwestern Mutual’s innovation lab, which is currently under construction.
Craig Schedler, a venture partner at Northwestern Mutual, says the organization might eventually create its own influencer-based marketing campaigns and incorporate
