Wall Street prognosticator Dan Salmon said last month at AdExchanger’s Programmatic IO conference that “every consumer-facing company will become an advertising company.”
And here’s the latest example: On Wednesday, Nu Skin, a publicly traded multilevel marketing (MLM) company that sells skincare products and supplements, acquired mobile commerce startup Mavely.
Terms of the deal were not disclosed.
Mavely offers ecommerce advertising solutions for direct-to-consumer sellers and has its own app that small-scale influencers with thousands or in some cases tens of thousands of followers can use to earn commissions for sharing products and generating more sales. Most of the influencers who use Mavely’s app are female since the company focuses on fashion and cosmetics.
Mavely’s tech licensing business grew out of inbound calls from DTC brands asking to white label its shopping rewards tools, including a virtual storefront for influencers who sell across social networks and a site-and-social button that automatically logs affiliate sales. One such brand partner was Nu Skin.
By the middle of this year, Nu Skin decided it wanted to take the relationship from just dating to moving in together.
For many businesses, the pandemic highlighted both their technology needs and put a greater focus on social commerce, said Evan Wray, Mavely’s CEO and co-founder.
Mavely will continue to operate as a stand-alone business and does not currently work with any direct competitors to Nu Skin, according to Wray, so there aren’t any awkward conversations about potential conflicts.
The startup was receptive to Nu Skin’s offer because the two companies share a vision for social media-based commerce, he said, and Mavely will have more distribution and growth investment backing as part of a multibillion-dollar DTC brand. (Nu Skin’s market cap sits at $2.25 billion.)
But the benefits for Nu Skin are also clear.
As an MLM brand, Nu Skin relies on regional and affiliate partners that buy and resell its products or bring new sellers into the program. These are the kinds of gig economy workers or social media creators who monetize their accounts but aren’t full-time influencers, said Jeff Smith, Nu Skin’s VP of global strategy and corporate development. In that sense, there’s a strong overlap between Nu Skin affiliate sellers and Mavely’s roster of nano-influencers.
AdExchanger Daily
Get our editors’ roundup delivered to your inbox every weekday.
Daily Roundup
Mavely will be a free feature within the app and toolkit that Nu Skin provides to its sellers and is currently in beta, Smith said.
Aside from making the tech free to its affiliate resellers, Nu Skin now considers commerce-based ad tech a core capability, Smith said, which is why the company decided to buy rather than build the tech itself or continue to use Mavely’s offering as a client.
Acquiring Mavely “gives us more control over that road map” and incentivizes the company to generate Nu Skin sales, even as it operates as an independent business with a finger on the pulse of social commerce, Smith said.
For instance, customer acquisition is increasingly expensive on channels like Facebookagram, Snapchat and GoogleTube. Mavely can shepherd new sellers to Nu Skin’s affiliate program more efficiently than using social ad platforms directly, considering the skyrocketing cost-per-acquisition rates.
The rise of social ad platform costs also makes commerce ad tech more appealing, because it forces brands to look for other sales channels, Wray said.
Last month, Instagram added link-sharing in Stories posts so any account can link a viewer to a site – a huge gift to small-scale influencers who can now post affiliate links and monetize their Stories content even if they don’t have sponsors. Also last month, the Facebook ad platform, which includes Instagram, saw ad prices jump by a quarter because ad targeting data has become scarce after the rollout of Apple’s iOS 14.5.
These parallel trends – rising social media costs and better monetization tools for content creators – make it more attractive for a DTC brand like Nu Skin to own the means to buy and sell ads or acquire new customers at fixed rates, Wray said.
“The reality is that Facebook, Instagram and other platforms are getting way too expensive,” he said. “Nu Skin and Mavely came together because we both see the opportunity in social commerce, and to capture marketing budgets as brands look for alternatives to rising walled garden prices.”
