1001 Startup Ideas - Social Media ads based on real time data

What is the Startup idea?This week's 1001 Startup Idea is to create a business that will use the real-time data to relay advertisements across social media channels. This company will provide a social media management tool and a platform which can be used to manage social media advertisement. The platform will use an algorithm to relay the advertisement across social media platforms based on key data points. For example, a company can relay advertisement for clothing based on real-time weather conditions.

Market DefinitionSocial media has taken the world by business by storm and brands are leveraging its power. Some interesting facts and numbers in relation to social media advertisement are given below:

• According to statista.com, in 2015, the advertising revenue of social networks worldwide amounted to 25.14 billion U.S. dollars and is projected to grow to 41 billion U.S. dollars in 2017.
• Hootsuite.com states that Social media spending in the U.S. alone is expected an increase to $17.34 billion in 2019.
• Hootsuite.com also states that in 2017, analysts predicted a 26.3% global increase in spending for social media ads
• Statista.com has estimated that the number of worldwide social media users will reach 2.5 billion by 2018.
• According to the CMO survey, the share of marketing budgets spent on social media is expected to more than double over the next five years, from 11% today to 24% by 2020.
• The CMO survey also found out that 22% of social media marketing activities are performed by outside agencies.

Pain Point & Target AudienceThe target audience for this venture will be "businesses looking to advertise on social media". The advertisements that are relayed on social media are relayed without any data points and reach its audiences even at times when they may not be interested in such products which are being advertised. There are very few platforms or companies which are able to advertise or relay advertisement on social media platforms based on any data points.

Value PropositionThe startup will offer a platform which will relay the advertisements based on real time data. It will relay the information to social media users based on certain key metrics of significance showing the need for such products. For example, a clothing company can advertise winter clothes based on low temperatures in a region or a company can advertise products based on new trending fashion or discussion on social media.

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Jappreet Sethi

Co-Founder|YoStartups.com

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Business ModelThe startup would follow a freemium model. The social media management tool will be free for users. The users will have to pay a fee for using the additional tool to relay advertisement based on real time information

Way to marketThe first step would be to create a social media management tool which would be entirely free of cost. This will create a stream of users which can then be later converted into users for the other platform where the customisable algorithm can be created to relay advertisements on social media platforms and hence, converting the free users to paid users.

MilestonesThe first year should be spent in creating a flow of users for the social media management tool. It should target getting 100,000 users in the first year. It should also create a few campaigns where real-time data is used and use that to get more paid users for its platform.

Investment Needed For PrototypeFor testing & building the prototype, pitch for raising 100K USD from angel investors or incubators. There are incubators which focus specifically on incubating adtech companies like The Bakery and Collider (dedicated to advertisement and marketing startups). There are other incubators which incubate data startups like Data Elite, the Data Incubator, Incubio and Stanford's StartX Accelerator. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.

Team CapabilityYou would need to have a person with a strong tech background to develop a lean and functional platform. It would also be essential to have someone with marketing and analytics background. In addition to this having a team member with experience in big data mining would be extremely helpful.

Investors / Expert TakeDriftrock, which works on a similar business raised USD 1 million from Forward Partners, Neon Adventures and Beacon Capital. Considering the size of social media advertisement market and the unique product being offered, there could be keen interest from investors for startups in this category if the business is executed well. In case you are looking forward to starting a business on these lines, please do drop us a note at YoStartups.com and we will be happy to assist you. We provide support to budding entrepreneurs globally through our tools and YoStartups Virtual Accelerator.