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Meet Niche, Twitter’s Secret Weapon

Twitter's small, little-discussed acquisition is paying big dividends.

Posted on November 6, 2015, at 2:23 p.m. ET

Over the past few months, McDonald's enlisted social media star Crawford Collins to promote its all-day breakfast on Instagram, Oxygen TV ran a campaign with the widely followed Sara Hopkins on Snapchat, and Coke enlisted Vine star Cody Johns to make a short, looping video on its behalf.

Behind it all, an unlikely orchestrator: Twitter.

Yes, that Twitter, owner of Vine, Periscope, and Twitter dot com. The company is working with advertisers to develop marketing campaigns across a variety of social media platforms -- whether owned by Twitter or not -- and it’s getting paid to do it. The effort, just nine months old, is intended to tap alternate revenue sources for the company, which has struggled to meet the high expectations placed upon it by the public markets. And it's helping Twitter make more money from its own properties in the process.

The force behind this work is Niche, a little-discussed company Twitter acquired in February. Niche, all of 30 people at the time of acquisition, is a services and technology operation that helps advertisers create content that works on social media -- a format many struggle to understand.

“The number one question we get asked from marketers is 'What should we talk about?'” Twitter senior director of global brand strategy Ross Hoffman, who led the Niche acquisition, told BuzzFeed News.

Niche answers that question by connecting advertisers with the over 16,000 social media “influencers” on its platform, and helping them develop campaigns that often run across a variety of social media.

Niche attracts these influencers by providing them with analytics across all of their social accounts and then funneling them offers to get paid for creating sponsored content. The company’s software helps it find the right influencers to work with each advertiser, and to efficiently manage approvals, creative direction, and payment.

“They need to be able to tell one story,” said Niche co-founder Rob Fishman of advertisers. “Niche helps them take care of a significant piece of that pipeline. [We help] them discover which of these creators are the best spokespeople for them -- we deal with all the contacting, the scheduling, the arranging. And then we help them deliver this whole slate of incredible assets that are really original, compelling, social, digital, mobile-first content for their brand.”

The model works especially well for the ad-free Vine, which has developed a unique culture of its own and can be difficult to tap into if you’re not “of” the platform -- like most advertisers. Working with Niche to find Vine stars willing to pitch products helps advertisers get their message across in a mode that actually works on the platform. It also takes some pressure off Twitter to insert force-fed ads into Vine. Twitter’s Hoffman said the company’s main goal with Vine right now is to build a great user experience, but added: “This is a nice thing that we can do in the interim.” Before ads come to Vine, that is, if they do at all.

When advertisers do run campaigns with influencers on Vine, they also often promote those videos in sponsored tweets on Twitter proper. Darren Lachtman, who founded Niche with Fishman, said he’s seen a growing interest from advertisers in promoting Vines that way. “Pre-acquisition, it was a very small percentage,” he said. “Now it's the majority of them.”

By bringing its operation into Twitter, Niche also benefited from bigger sales and engineering teams that have helped it find more people to sell to, and build its software faster. The numbers -- provided to BuzzFeed News and released here for the first time -- suggest the arrangement is benefiting both parties. Since the acquisition, Niche’s average deal size is up 250%, its monthly campaign volume is up 300%, and it has added almost 10,000 social media influencers to its original base of 6,200. The company has also doubled its headcount and is hiring international teams in England, Japan, and Brazil.

You might imagine there would be some wariness within Twitter about handing money to other social platforms via Niche. But that’s not the case, according to Hoffman. “I understand when folks from the outside can be a little bit dubious saying, 'How can you not be biased, you're Twitter, you have Vine, you have Periscope, wouldn't you funnel everything through there?'” he said. But the reason this program is working so well is precisely because Niche is cross-platform; social media stars know they're maximizing their earnings. “If suddenly, post-Niche becoming a part of Twitter, they start to see 'I'm earning less revenue,' they're going to connect the dots and they're not going to be too pleased with us.”

If anything, running ads on other social platforms can only help Twitter, as the company would start to see a cut of revenue it would otherwise have no claim to.

Cody Johns, the social influencer who created the sponsored Vine for Coke and shared it with his 3.6 million followers, was so taken with Niche’s business model, he signed on as the company’s creative ambassador. Today, he’s making his living entirely from social media and in doing so helping Twitter to create the sort of content that advertisers will pay to promote. “I’m a living example of what a creator can aspire to be, which is making a living off doing their posts on social media,” he told BuzzFeed News. It’s a win for him, and for Twitter’s bottom line.

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