For the InvestorPlace 10 Best Stocks for 2021 contest — a little contest we do every year in which a group of money managers, market experts, and financial journalists compete against each other and our readers for the best stocks to buy in 2021 — I turned a few heads when I picked a micro-cap influencer marketing software company that no one had ever heard of before.

But that company — Izea Worldwide (NASDAQ:IZEA) — is winning the contest so far, with IZEA stock already up 260% in 2021 (and it’s not even the end of January).

This is rally is no fluke.

So far in 2021, IZEA has won two contracts from Fortune 10 customers who are expanding spend on the platform, and a seven-figure contract from a Fortune 100 retailer.

These huge contract wins have led to the company’s overall core business volume in the first two weeks of January 2021, exceeding the total core business volume from all of January and February 2019, combined.

Make no mistake. The IZEA growth story is ramping.

This ramp is just beginning — and that’s why, even after a 200%-plus surge in January, I continue to think that IZEA stock is one of the best stocks to buy for 2021.

Say Hello to Influencer Marketing

My bullishness on IZEA stock is a byproduct of my favorable experience with influencer marketing.

Believe it or not, analyzing up-and-coming technology stocks with disruptive long-term potential is just part of what I do. I also like to dabble in creating some of those technology companies myself.

My latest venture? A consumer app called Fantastic that leverages a hyper-personalized AI engine to match consumers with experiences in the most efficient way possible.

It’s a cool project. And in just a few months since our public launch, we’ve garnered plenty of users.

But user growth was an uphill battle. At first, we tried what all new brands try: targeted advertising. We poured money into Facebook, Pinterest, Instagram and Twitter to try and get our app in front of the right people.

It didn’t work.

So we pivoted to influencer marketing, wherein we identified influencers on social media platforms who matched our needs, and paid them to promote our app through content posts. It worked wonders. Influencers were able to give us the trusted, high-quality exposure we needed — the exposure that targeted ads simply weren’t able to deliver.

So we came to a big conclusion: influencer marketing is the future.

The Rise of the Influencer Economy

As it turns out, we aren’t the only brand coming to that conclusion. Check these stats out from The State of Influencer Marketing 2020 Benchmark Report:

  • Almost 80% of brands have experimented with influencer marketing in 2020.
  • Over 90% of them find it to be highly effective.
  • Nearly 75% believe that the quality of customers they receive through influencer marketing campaigns is better than from other forms of marketing.
  • About 70% expect to boost their influencer marketing spend. Only 4% expect to decrease influencer marketing spend.

Folks, the writing is on the wall.

Consumers are losing trust in brand ads. Think about all the ads you scroll past on Facebook, or Twitter or even on this very page. Instead, consumers are placing their faith in people. Sure, you may have scrolled past an ad on this page for my free newsletter Hypergrowth Investing — but if a friend recommended it to you, you’d probably sign up.

What we are seeing play out in front of our eyes is a seismic shift in consumer trust toward relatability. This will, of course, precipitate a seismic shift in ad budgets toward influencer marketing.

The investment implication? It’s time to invest in the first inning of the world-changing influencer marketing megatrend.

The best way to do so is by buying one of my top stocks to buy for 2021: IZEA stock.

Challenges in the Influencer Economy

I can tell you from first-hand experience that influencer marketing is great. But I can also tell you from first-hand experience that it is not without its challenges.

The biggest challenge? Finding the right influencers for your campaign.

There are lots of influencers out there. They run the range of geographies, personalities, styles and audiences. Finding the right match for your brand can be a headache — indeed, only 14% of brands say that it is “easy” to find influencers.

Other big challenges include:

  • Payment fraud (plenty of transactions are not legally binding — they’re just Venmo transfers, and as such, influencers sometimes just “walk away with the money”)
  • Fake followers (multiple influencers inflate their reach by paying for fake accounts to follow their real account, and it does no good for a brand to pay an influencer to promote a product to a bunch of robots)
  • Brand safety (influencers often have creative control, and sometimes abuse that creative control)
  • ROI measurement (there isn’t a standardized way to measure clicks and engagement rates)

Influencer marketing software company IZEA is attempting to fix all of these major pain-points, and in doing so, is setting the stage for the IZEA stock price to rise 60X.

Who Is IZEA?

IZEA got its start 14 years ago, when its founder started PayPerPost.com, the first influencer marketing platform that openly paid bloggers to create blog posts for brands. Over the subsequent decade, IZEA acquired multiple related influencer marketing platforms and tied them all together into one unified software hub, dubbed IZEAx, which became the “brain” behind many influence marketing campaigns.

During that stretch, IZEA witnessed enormous growth. Between 2010 and 2017, IZEA’s revenues rose more than 500%.

Then competition arrived… and in an attempt to differentiate itself from all of its new competitors, IZEA added too many unnecessary components to IZEAx, sent mixed marketing messages and ultimately convolved and eroded the platform’s core value prop.

IZEA’s growth narrative fell flat. Revenue growth turned negative. Net losses widened. And the stock plunged.

But everything is going to turn a corner for this beaten-up company in 2021… and over the next few years, IZEA is going to grow at lightspeed.

Why? Shake.

Shake Is the Future ‘Amazon for Influencers’

In early June, IZEA announced a new platform called Shake. That platform just went live in November.

For all intents and purposes, Shake is basically just the Amazon for influencers. It’s a marketplace where influencers can list their “shakes” (“I have 30,000 followers on Instagram in the home décor market, and I’ll promote your product for $100 per post”), brands can browse through those shakes, and the two can connect and transact in a legal, safe, organized and streamlined manner.

Shake is a genius concept that will turn into a huge platform in the 2020s.

That’s because Shake solves all of the Influencer Economy’s biggest challenges.

Discoverability? Now brands have a dedicated place to find and contact influencers across all social platforms, while influencers have a dedicated place to gain exposure to brands.

Payments? Handled in a contractual manner through Shake. Fake followers? IZEA leverages an AI engine to calculate what percentage of each influencer’s followers are fake. Brand safety? Brands control the campaigns through a central dashboard. ROI? Easily measured by standardized IZEA tools.

Shake is a panacea for influencer marketing.

Competition? Sure, there’ll be some. But marketplaces benefit from marketplace effects, and Shake — as the first mover here with an already robust repository of influencers — will be able to lean into marketplace effects to turn into the unrivaled Amazon of Influencers.

That’s a big deal. Because Influencer Marketing is the future of advertising. And because the Amazon of Influencers will be an enormous and widely used platform at scale.

If IZEA successfully turns Shake into the Amazon of Influencers, the potential upside for IZEA stock is enormous.

Early 2021 Momentum Is Robust

Of course, everything I’ve just told you so far is all “an idea”. That is, I’m telling you about what IZEA stock could be thanks to what Shake could be — not what they are today.

That means we will have to keep close tabs on how Shake and IZEA develop over the next few months to make sure that this idea does morph into a reality.

So far, so good.

As mentioned earlier, IZEA has won three huge contracts in early 2021, which has caused the company’s business volume in the first two weeks of January to exceed its total business volume through the first eight weeks on 2019. Meanwhile, our checks on Shake imply that there is a strong inflow of creators and creator content/services on the platform, ranging from product photography to promoted posts.

So long as these checks remain favorable, we will continue to remain very bullish on the long-term potential of IZEA stock.

Bottom Line on IZEA Stock

When looking at top stocks to buy for 2021, you could play it safe, and pick an Amazon (NASDAQ:AMZN) or an Nvidia (NASDAQ:NVDA).

Or you could try to hit a home run. If you’re trying to hit a home run in 2021, then I suggest you take a good hard look at IZEA stock. The company’s newly launched Shake marketplace for influencers is a total game-changer in the marketing tech world. Robust uptake of this new platform in 2021 could propel IZEA back into hypergrowth mode, and send IZEA stock flying higher.

— Luke Lango

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Source: Investor Place