Celebrity social media firm Ad.ly predicts $5M in revenue after embracing analytics

Ad.ly is a Beverly Hills firm that charges brands to obtain social media endorsements from the likes of Mariah Carey and Kim Kardashian. But since its new CEO came on board in March 2012, the four-year-old firm has come to rely less on celebrity tweets for its business model.

According to Ad.ly CEO Walter Delph, the firm had trouble in the past obtaining steady revenue because many brands used it for a one-and-out campaign. Now, he said, Ad.ly has found a second form of income through licensing the company’s analytics platform — tools that can help brand track how mentions on Twitter and Facebook ripple down from a celebrity to their fans.

“We had an activation business, but we didn’t have a data management platform. Now, we do. … It’s a logical extension of the celebrity tweet business,” said Delph in an interview in San Francisco this week. Delph, who was formerly a SVP at News Corp’s Digitam Media division, added that Ad.ly now has more than 10 repeat customers and is on pace to generate around $5 million for the year.

Adly’s decision to turn towards licensing also amounts to an admission that the company is pivoting, and that basing a social media business solely on celebrities is not not viable. This is likely due to the fact that Twitter and Facebook(s fb) mentions are typically wrapped up in a larger endorsement package — tales of a one-off tweet from Charlie Sheen selling for $9,500 are more the exception than the rule.

Delph also added that social media marketing is a challenge the platforms typically don’t convert into immediate sales.

“You can’t expect me to sell a truck right on Twitter,” said Delph, adding that Ad.ly in the past has done a poor job of explaining how to measure ROI from social media.

While the focus on its analytics tools provide a way to persuade marketers of the value of social media, the new stragegy could also make it hard for Ad.ly to stand out from the dozens of other firms that offer social media listening platforms for brands. In response, Delph said Ad.ly is distinct because it can not just monitor social media ROI but also “activate” it through the celebrity tweets.

Delph adds that the overall social endorsement business is getting stronger because of richer media capacity built into platforms like Twitter.

“If you can show anything beside written word, it’s worth much more. A photo brings 3-4 times the performance.”