June 14, 2016
With a recent $22 million Series C funding from Bessemer Venture Partners, the Tel Aviv- and New York City-based Yotpo is planning to expand to other regions to grow its customer base. The platform helps facilitate genuine and honest user reviews.
The Future of User-Generated Content (UGC)
User-generated content (UGC) is the lifeblood of today’s Internet. Ever since blogging, YouTube, Twitter and social networks gained traction as among the major mediums of engagement for brands and businesses, marketers have sought to optimize the use of these channels.
According to the Content Marketing Institute’s fifth annual B2B Content Marketing Benchmarks, Budgets, and Trends—North America, 78 percent of companies are planning to leverage UGC in their content strategy this year. Interestingly enough, the report did not even mention UGC as a strategy in last year’s report.
Among types of content that businesses will find useful, product reviews are often sought as among the most effective means of positively influencing fellow consumers. According to a 2013 study by Nielsen on word-of-mouth advertising, 68 percent of consumers would trust opinions by other consumers posted online.
This rises to 84 percent if the opinions were that of people they know. This is on an uptrend – a subsequent Nielsen study found that 85 percent of consumers regularly seek out “trusted expert content” or credible, third-party articles and reviews, before making a purchase.
Leveraging UGC as Part of Content Strategy
Given these trends, the challenge for businesses is finding which particular platforms and channels to use in effectively leveraging UGC as part of their content strategy. With this demand, Yotpo is expanding in order to tap the enterprise market’s need to utilize UGC more effectively.
Yotpo CEO, Tomer Tagrin, commented on how this funding will impact the company:
“With this funding, we will be able to build out our platform to include more features, more integrations and more forms of user-generated content. In the upcoming months, we will begin our global expansion with multiple offices outside the US and Israel. This funding also gives us the option to explore strategic acquisitions.”
This brings the company’s total funding to $50 million. Previously, Yotpo raised venture and institutional funding rounds led by Rhodium, Gandyr Group, Blumberg Capital and Marker, among other investors.
The Smart Way to Get Users to Review
What exactly is the best way to get users to review products and services? This is the exact challenge that Yotpo is addressing for its business clients. The company uses data and analytics to determine the most optimal method and timing to obtain review content from a user. This includes finding out the best mode of communication and which point during the post-sales cycle, considering differences in behavior across cultures, demographics and product type.
The challenge at this point is determining the pressing needs of large enterprise customers, and this investment round comes at just the right timing for Yotpo. The company recently hired a new Vice President, former Salesforce Marketing Cloud executive Jeff DiBartolo.
The company’s board also appointed Bessemer partner Adam Fisher as a new member. Both are expected to contribute greatly in terms of expertise and mentorship as Yotpo’s team expands globally and across the enterprise market.
According to the CMI study cited above, a majority of businesses consider producing engaging content, and doing it consistently, as challenges that they need to face with immediacy. With Yotpo’s latest thrust toward the enterprise market, businesses will have a viable tool in their arsenal for collecting, and amplifying content from their users as a means of enhancing trust, traffic and sales.
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