Populace ads business plan (Winner of QRCE 3rd BP Competition 2009)

“ T O D E M O C R A T I Z E O N L I N E A D V E R T I S I N G ”

W I N N E R O F “ G O O G L E B E S T O N L I N E B U S I N E S S P L A N ” A W A R D A T Q R C E 3 R D C O M P E T I T I O N

M U H A M M A D A R R A B I A R R A B I @ G M A I L . C O M

U P D A T E D 2 0 1 2

Populace Ads

Populace Ads Business Plan by Muhammad Arrabi is licensed under a Creative Commons Attribution 3.0 Unported License. Based on a work at www.muhammadarrabi.com

Given to my love of this idea but my lack of time – I decided to “open source” it – anybody can make use of it under the Creative Commons Attribution license. Note: research is mostly from 2009.

Winner of QRCE 3rd BP Competition

Populace Ads Business Plan, Creative Commons by Attribution to MuhammadArrabi.com

�  I submitted the original form of this business plan to the QRCE 3rd business plan competition in Jordan and won the 1st place called "The Google Best Online Business Plan".

�  Since then I've consulted several friends, updated it and added major ideas. Given my love for the idea, but lack of time, I decided to "open source" it under Creative Commons Attribution 3.0 license.

�  Please, steal my ideas J

In a nutshell

�  Populace Ads (PA) is an Online Advertising Platform, that will act as the Ad Agency for the millions of SMBs around the world.

�  It has 2 sides (Customers & Creators): ¡  The Customers, mainly SMBs, use very simple wizard-like

interface to create & buy rich and proven Online Advertising Campaigns.

¡  The Creators are Digital Marketing Specialists around the

world, experts in their local markets, who create the “Dynamic Marketing Templates” and advertise them to their local SMBs.

A tale of Customers and Creators

Dynamic Templates

User Data

Secret Sauce

Digital Experts worldwide

Create Dynamics Templates

SMBs answer simple

questions & use simple UI

Digital Experts bring Customers to system

Many Channels: •  Google •  Mobile •  Bing •  AOL

The Market Opportunity

�  There are millions of SMBs worldwide. �  15 million SMBs just in the USA, spend $22.5b

annually on ads, but only 7% online. High attrition percentage from Google Adwords.

�  Why? Too hard technically. Needs are too diverse. Too expensive to hire Ad Agency.

�  Each Digital Marketing Expert can become an Agent for Populace Ads – covering the world.

�  If each customer spends $100/month, and we have only 1 million SMBs, revenues will be $1.2b/year.

A N D T H E O P P O R T U N I T Y

The Pain Point 6

Why SMBs do not advertise online?

�  2 main barriers ¡  Technical Barrier: As much as Adwords is simple, it’s very hard

for business owners. What is the difference between “Broad” and “Phrase” keywords? How to combine negative and exact keywords to create high-quality entries?

¡  Marketing Barrier: Owners are great at running their businesses, but do not know how to write Copy that attracts the right customers, or understand customer behavior online.

�  What happens today: ¡  Many SMBs try Google Adwords for few months, and they pull out

because it’s not showing results. Can’t measure or track. ¡  Some Medium Businesses buy an account, set it to “automatic”, and

forget about it for a year., only to discover how bad it has been.

The Digital Marketing Specialists pains

�  The Digital Marketing Specialists (DMS) are experts are creating and managing accounts (and many learn on the job). ¡  However, this process is very time-consuming. And it’s hard to

keep up – with new advertising channels coming out continuously (Mobile, iPads, iBooks, etc.)

¡  This limits the number of concurrent accounts they can manage.

�  And they don’t know how to do all the other things besides technical help ¡  Bringing Customers, Money Collection, Deal Negotiation with

Publishers, etc.

Populace Ads Solves these Pain Points

�  For Customers - SMBs ¡  Populace Ads is a one-stop-shop for Online Advertising

Solutions. ¡  Business Owners answer survey-like questions (similar to

Turbo-Tax). ¡  They choose how much they want to spend (we take as little as

$50/month).

�  For Creators – DMSs ¡  We create a fully automated platform that allows Specialists to

create a Campaign once, and they “templetize it” as a Dynamic Marketing Template.

¡  The Digital Marketing Specialists can service hundreds of concurrent accounts using these templates – with the PA DMS Dashboard.

A N D T H E O P P O R T U N I T Y

The Market 10

Phenomenal Growth for Online Advertising

$4.6 $8.1 $7.1 $6.0 $7.3

$9.6 $12.5

$21.2 $23.4 $22.7

$25.8 $28.5

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

U.S. Online Advertisement Spending (Billions) (Source: eMarketer, Nov 2010)

Ad Budget vs. Company Size

Ad Agencies Industry

Company Size

Ad Agencies Industry, the gap

Ad Budget vs. Cost of Online Ads

Ad Budget

Cost of Preparing Online Ads

Company Size

Break-even point

Ad Agencies Industry, the opportunity

Ad Budget vs Cost of Online Ads

Ad Budget

Cost of Preparing Online Ads

Market for Big Ad Agencies

Market for Smaller Ad Agencies &

Consultants

Traditional Break-even

point The “no digital marketing” gap

Company Size

Ad Agencies Industry

�  Ad Agencies charge a lot ¡  Campaign Creation $2,000-$7,000+ ¡  Campaign Management $2,000-10,000/month ¡  Top agencies charge much more (e.g. for Coca Cola)

�  As a result, out of 15 million small-and-medium businesses, only 7% do online advertising.

Market for Populace Ads

Ad Budget vs Populace Ads cost

Ad Budget Cost of Preparing Online Ads Cost of Populace Ads

A new market opens up for Populace Ads

The new Break-even point

The traditional Break-even

Company Size

The Populace Ads Lower Cost

�  Cost of Traditional Online Ads is high: ¡  Creative content done by hand ¡  Management done by hand or semi-automated ¡  Marketing research done by hand

�  Populace Ads Solution ¡  Economy of scale ¡  An innovative component that will create campaigns for many

customers automatically. Cost of initial design is high, but auto-customizing it is very cheap.

¡  Management is fully automated ¡  Marketing research is done for whole vertical, used by all

campaigns.

Target Customers

�  Populace Ads’ solution is more affordable but less customizable than full campaigns done by hand.

�  Target Customers: ¡  (Any company with online ad budget $100-2,000/month is a

potential customer.) ¡  Medium Businesses ¡  Small Businesses ¡  And even Micro Businesses

Who Are the Customers?

�  Medium, Small, & Micro Businesses are mostly Local Companies targeting specific region. They are increasingly getting clients through the internet.

B R I E F B U S I N E S S D E S C R I P T I O N

The Offering 20

Populace Ads Website

�  Populace Ads will be the one-stop for all online

advertisement needed by SMBs ¡  Create their campaigns ¡  Manage their campaigns ¡  Monitor campaign performance on the web

Populace Ads Website, Advertisers UI

�  Simple UI (Wizard-like) Website ¡  By answering few questions

÷ E.g. Business name, vertical, services offered, location, etc. ÷ Ad Channels: Google, Yahoo, Local news sites, etc.

¡  Ad Campaigns are automatically generated ¡  Ad Campaigns are also automatically managed & optimized

�  Behind the Scenes: ¡  Proprietary automatic system for creation and optimization ¡  Possibly a team of SEM specialists for extra customization and

monitoring.

Populace Ads, SEM Experts UI

�  SEM Specialists can contribute templates: ¡  Provide a website for SEM Specialists ¡  Local SEM specialists can create their own campaigns ¡  They can market them to their own local communities ¡  Profit sharing – they keep 5-10% of ad spend, Populace Ads

keep 10-15%

�  Goal ¡  Reaching SMBs is very hard ¡  Developing customized campaigns for world regions &

languages is very hard ¡  This will also morph us from Ad Agency status to a Platform,

thus more attractive to be acquired. ¡  Risk: features exposed to competition.

Sources of Income

�  Percentage of Ad Spend ¡  Goal is to lower barrier & one-time fees. ¡  Thus, charge 10-50% of ad budget. 10-20% is industry

practice. Up to 50% on low budgets is likely to be acceptable.

�  Special Channels Fees ¡  Might request monthly fee or minimum-budget for special

channels (e.g. News sites ads)

�  Advertisers Discount ¡  We’ll get discount from advertisers (e.g. Google & Yahoo) for

posting large volumes of ads. This discount is part of our income.

Populace Ads Website, Partnerships

�  Future Partnership Program to offer our service through aggregate websites.

Competition (as of 2009)

Simple UI Automated Campaign Creation

Automated Campaign Mgmt

Min. monthly budget

Populace Ads ü ü ü $100

Ad Agencies (e.g. marchex.com)

(semi) $5,000

Yodle.com (semi) (semi) ü $2,000?

LocalReach.com (semi) (semi) ü $2,000?

Simple Search Engine interface (Google, Yahoo)

(semi) (very limited)

Potential Tools Makers (Clickable.com)

(semi) ?

Execution Plan 27

Plan Overview

�  Now: research & spec writing ¡  Write engineering specs for populace ads engine ¡  Research SMB ad verticals, offer by-hand SEM consulting ¡  Raise seed funding, ~$120K

�  +2 mo: Build Prototype (seed funding) ¡  Build Prototype in Jordan ¡  Get 3-5 local customers, tune engine & prove concept

�  +10 mo: US Market (series A) ¡  Create US company: CEO, Marketing, & Sales; Expand Jordan ¡  Reach 1000+ US customers, many verticals, many channels

�  +12 mo: International (self-funded) ¡  Target SMBs in Europe. Expose the “Platform”

Financial Forecast Summary

Year 1 Year 2 Year 3

Customers 80 500 1500 Revenue $480,000 $3,000,000 $9,000,000 Gross Margin $80,000 $692,308 $2,076,923 Expenses $104,400 $327,600 $685,600

Net Earnings ($24,400) $364,708 $1,391,323

Targeting 1 million in 3 years. (take with a grain of salt – lots actually)

�  Risks ÷ Risk that SMBs do not find online advertisement suitable: low ÷ Risk of competitors lowering prices: medium

¡  Addressing risk ÷ SMBs already find online advertisement useful and are spending

more on it. ÷ Competitors cannot lower price beyond the cost of the Ad Servers,

which is the same for all.

Key Issues

�  Deciding what vertical to target first �  Gathering an excellent engineering team in Jordan

to build the Prototype �  Finding a CEO for the company with extensive SMB

market experience. �  Finding the best sales method for SMBs – do we

need an on-ground sales force in the US? �  Finding suitable verticals to Expand.

“ T H E M A N W H O W I L L U S E H I S S K I L L A N D C O N S T R U C T I V E I M A G I N A T I O N T O S E E H O W

M U C H H E C A N G I V E F O R A D O L L A R , I N S T E A D O F H O W L I T T L E H E C A N G I V E F O R A D O L L A R ,

I S B O U N D T O S U C C E E D . “ H E N R Y F O R D

Conclusion

Goals & Objectives

�  Phase 1: Prototype, 6 months ¡  Build prototype, can support 500 customers with 1 channel (most likely Google

Search Text Ads) ¡  Prove that the fully-automated Creation & Management engines do work. Tune

them. ¡  Target only 1 vertical to start with ¡  Get 5-10 customers, (at lowered rate or free)

�  Phase 2: Cover Costs, 1.5 years ¡  Expand Engine to support 2000 customers, with 2-3 channels. ¡  Established in 1-3 verticals, aggressive sales & pricing ¡  Get 500 customers

�  Phase 3: Profitable Expansion, 2+ years ¡  Expand Engine to support 20,000 customers, with 10+ channels. ¡  Expand into as many verticals as possible (20+) ¡  Get to 5000+ customers ¡  Sign Partnership with Vertical Portals ¡  Ad Populace as a Platform! (more on next page)

Thank You

D E T A I L E D

Populace ads business plan (Winner of QRCE 3rd BP Competition 2009)

Business

Transcript of Populace ads business plan (Winner of QRCE 3rd BP Competition 2009)

QRCE Entrepreneurship Development BootCamp 2010 & QRCE ... Dissertation (Master & PhD Programs) ... Bootcamp/South BootCamp Apr 4, 2015 Finalized Business Model & Business Plan Summary

The Populace Now Volume 2 Issue # 19

Sha Tin College Young Musicians Festival 2014 Categories Categories Winner in each category Winner in each category Winner of Overall Best Solo Winner.

Fédération Internationale de Volleyball ...NORCECA - 10-12 JAN, 2020 / SANTO DOMINGO (DOM) TOTAL OF 12 TEAMS WINNER POOL A WINNER POOL B WINNER POOL C WINNER POOL D WINNER POOL E

Request for Inspection on Behalf of Populace of Logar ...

CONFERENCE PROCEEDINGS - SEBON · of populace, empowerment to the child and old-age group, and inclusion of old-age populace in the main stream of modern financial system. The conference

Yehuda Bauer on the Jewish Populace of of Baranowicze, Poland

The Populace Now Volume 2 Issue 27

Dr Amir Khoury Qrce Nov 8 As Sent

The Populace Now Volume 2 Issue #29

Aegina - Asmadi Games · 2019. 10. 28. · Aegina Sparta - Bronze 1/220. Add a Populace here. Hydra Sparta - Bronze 2/220. Sack two enemy Populace on an Island where you have two

OPTIMA - SMART OPTIMA WINNER - SMART WINNER

Exposed- Secret Presidential Chemtrail Budget Uncovered – Congress Exceeds Billions To Spray Populace Like Roaches

Présentation PowerPoint · winner 2018 winner 2018 travel & hospitality awa winner certificate of excellence tripadvisor hotels & resorts sector 2018 winner awards leading

Rural Populace Preference towards the Use of Media … (7).pdfRural Populace Preference towards the Use of Media of ... the help of a well-structured questionnaire by following „Foot-in-Door

Vliv klimatu na psychologii populace - CBKS · 2012. 5. 24. · Vliv klimatu na psychologii populace Jan Sitar Interní a endokrinologická ordinace Polikliniky v Ku řimi Abstract

ring star - dca.ca.gov · 7/28/2018 · Rolando Lemus Robert Garcia Sr Zoltan Petranyi Hector Tanajara Sr Ismael Ramirez David Balderas WINNER WINNER WINNER WINNER WINNER WINNER $

The Populace Now Volume 2 Issue #24

Analýza prostorového rozmístění populace (spatial pattern analysis)

Winner mRemove Winner Media Player – Easy Removal guide of Winner Media Player from your PCedia player