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Advertising in social networks via influencers

Kazakhstan, Astana city
Market: Information and media
Stage of the project: Operating business

Date of last change: 23.02.2018
Min investment
$  100.000
1
Total required
$ 350.000
Rating
equalizer 325 из 1000
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Idea

Advertising on social networks via influencers
The main idea to automate influencer marketing - the most effective advertising tool. We have created a service which allows to automate the process, eliminate various risks, workflow, simplify and speed up the process in a hundred times over.

Current Status

We are raising funds to launch AdBird in the USA.
In Kazakhstan, we already have more than 130 advertisers and more than 800 influencers. We conducted 16 promotions in which more than 230 posts were created.
During the first 5 months, we conducted advertising campaigns for more than $ 1800 and earned $ 300 (a problem in a small market of Kazakhstan). On average, our sales are growing by more than 400% monthly, but this growth will soon meet the ceiling of the local market.
Our early adopters were restaurants and cafes, as this is one of the highly competitive niches and they are always open to new instruments that can attract guests.
ROI for the restaurant business is 840%, for every $ 1 spent on advertising in AdBird, they earn $ 8.4. Now the main category of our clients shifted to online services - money loan, ticket sales and other.
Our largest clients are BI-Group (construction), Rixos Astana President Hotel, Toni & Guy and others.

Market

The market of Kazakhstan is too small for our startup, but the active interest of advertisers allowed us to test the product on real users, check our financial model and get invaluable experience that will be useful for us on international markets.
Our goal at the moment is to enter to the US market - the size of which, in terms of marketing influence - 18 billion dollars a year.
For successful implementation of the project, it is enough for us to receive 0.5% of the market - $ 90 million per year. When this goal is achieved, we will earn $ 9 million per year.

Problem or Opportunity

Our main clients are advertisers.
Cooperation between advertisers and influencers is trending and hundreds of advertising campaigns are launching all over the world every day.
Advertiser's problems:
1. Advertisers spend a lot of time selecting perfect influencers for promotion, then they spend more time for signing contracts and creating an assignment for the influencer;
2. It is difficult for advertisers to scale their promotion because all problems mentioned in point 1 are multiplied by the number of influencers;
3. There is no single benchmark - which determines the fair market price for one post, each influencer determines the cost of the post himself;
4. It is difficult to track the effectiveness of an advertising campaign and its ROI;
5. A lot of financial transactions and control over influencers performance.

Competitors

SharePop, Revfluence, HYPR, Chamboost, iFluenz, Influicity
All of the above competitors work in the US, but services are limited in automation, do not provide a wide range of services and have high commissions.
A detailed comparative description of our competitors is available in the attachment of presentation.

Advantages or differentiators

Our Key Benefits
1. The formula for determining the price per post;
2. Launch of advertising campaigns of any scale;
3. Low commission;
4. Fully automated platform, available 24/7.

Finance

We have a base commission - 10% of each transaction between the advertiser and the blogger, and we have additional services, whereby we get about 15.4% from each transaction on average.
During the first 9 months of the service in the US, we plan to reach the point of self-sufficiency, having spent about 17450 deals with the average transaction check - $ 50.
In the first 14 months of working in the US market, we plan to earn 770,000 dollars, which will allow our business to work out the invested investments. 143450 transactions with an average check of 50 dollars.
For the first 2 years of work in the US market, our revenue will be $ 14.3 million, with spending $ 4.5 million. Net income will be $ 9 million.
Our EBITDA for the first 3 years of operation in the US will be $ 36.6 million.

Business model

1. Consumer segment:
1.1 Small and medium-sized businesses with personalized products and services. They most often do not have a large marketing department, our service will help them to effectively launch the promotion of their products and services without the participation of experts;
1.2 Large-scale business with on-line production, part of our functionality will perfectly suit large corporations that promote their product in several countries at the same time. For example, the launch of a new Coca-Cola in different regions of the world or a new device.
2. Value proposition:
2.1 Placement of own production materials in the news feed of influencers and bloggers;
2.2. Order the development of posts by opinion leaders.
3. Communication channels:
The main methods of selling advertising in social networks, google adwords, direct sales to advertisers. Also, we have implemented a recommendation affiliate program for opinion leaders and advertisers.
4. Flows of income:
4.1. The main revenue stream is a commission of 10% for each transaction between the advertiser and the blogger;
4.2. Additional revenue - a premium functionality for which advertisers are ready to pay. Whereby the current business, we already know that advertisers are ready to pay for the following services: native positions, post moderation, creation of advertising campaign concepts, development of images and copyright;
4.3 Also, additional online income will be online courses for influencers - courses of mobile photography, copywriting, an increase in the number of subscribers. They can pay courses by the money that they earned on our service. Some of the courses will be free, as it is in our interests to make our product (influencers) more expensive and earn a large commission on their orders.
5. Key resources:
A key resource is our platform and mobile application.
6. Key activities:
6.1. Maintenance of transactions between advertisers and influencers;
6.2. Marketing support of advertising campaigns - assistance in creating, conducting and analyzing advertising campaigns.
7. Key partners
7.1 Key partners for our business are advertising agencies that can resell our services to their advertisers. For advertising agencies we have a special offer;
7.2 Online courses that we can resell to our influencers.
8. Expenditure structure:
Marketing and product promotion on the market - 60%;
Development and development of the service functionality - 25%;
Administrative costs - 15%.

Money will be spent on

Launch of service in the US market.
Marketing and promotion, development and administrative costs.
At the moment we have a team in the US:
1. CEO - Aitbek Amangeldi https://www.linkedin.com/aitym
2. Marketing - Marik Hazan https://www.facebook.com/marik.hazan
3. Sales - Long Nguyen https://www.linkedin.com/in/long-nguyen-624484/
4. CTO - Vadym Ustymenko https://www.linkedin.com/in/ustymenko/

Offer for investor

10% of the equity for 350 000 $

Risks

1. Reputation
In such a business, our company must have an excellent reputation - we must pay a lot of attention to the quality of posts written by our influencers. All our payments to influencers should be made on time, the delay in payment may lead to negative posts about our service.
2. Restriction of access to social networks in different countries.
Facebook, Instagram, LinkedIn are banned in a number of countries. Entering restrictions on the use of social networks in our markets can lead to the loss of part of the income
3. FTC regulations - in the US, the promotion of products through influencers and bloggers is already regulated and there is a set of rules that our business must follow. However, the final responsibility for complying with all FTC rules is borne by the person who publishes the content-leaders and bloggers.

Incubation/Acceleration programs accomplishment

We received a proposal to participate in the incubation programs, but on a fee basis.

Won the competition and other awards

We participated in SeedStars, 8 best start-ups of Kazakhstan were selected, who in 3 minutes submitted their projects to the expert jury. We took the 3rd place. The selection took place in July 2017 in Astana, Kazakhstan.

Product Video

Website address

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Idea
Current Status
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Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
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Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
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Product Video
Website address