Populace Ads “Online Ad-Campaigns for Small Business” Busi...
Populace Ads “Online Ad-Campaigns for Small Business” Revisions History...
Populace Ads “Online Ad-Campaigns for Small Business” ...
Populace Ads “Online Ad-Campaigns for Small Business”1 Executive Summary1.1 The Opportunity...
Populace Ads “Online Ad-Campaigns for Small Business”1.3 The ForecastIf our plan works, and we...
Populace Ads “Online Ad-Campaigns for Small Business”Market AnalysisIn this section we i...
Populace Ads “Online Ad-Campaigns for Small Business” c. Tres Amigos Rest...
Populace Ads “Online Ad-Campaigns for Small Business”etc. Companies in US spend around ...
Populace Ads “Online Ad-Campaigns for Small Business”As we can see, running an online ad cam...
Populace Ads “Online Ad-Campaigns for Small Business” b. This will be a very small ...
Populace Ads “Online Ad-Campaigns for Small Business” c. They have a co...
Populace Ads “Online Ad-Campaigns for Small Business” o Services offered (e.g. Inter...
Populace Ads “Online Ad-Campaigns for Small Business”3.2.2 The Partners ServiceReaching SMB...
Populace Ads “Online Ad-Campaigns for Small Business” b. The fully-automated approach a...
Populace Ads “Online Ad-Campaigns for Small Business” a. This is a limited advantage ov...
Populace Ads “Online Ad-Campaigns for Small Business”4.1.2 GoalsGoals of this period...
Populace Ads “Online Ad-Campaigns for Small Business”4.3 Financial Forecast4.3.1 Personne...
Populace Ads “Online Ad-Campaigns for Small Business”Number of Customers 100 ...
Populace Ads “Online Ad-Campaigns for Small Business” 4- Ashraf Dabbas a. BSc, Comp...
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Populace ads business plan v1.5 (winner QRCE 3rd BP Competition 2009)

This is the actual old business plan submitted to QRCE for their 3rd Business Plan competition. We won the Google Best Online Business Plan award. Team members: Muhammad Arrabi, Muneeb Arrabi, Fadi Dallasheh, & Ashraf Dabbas
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Populace ads business plan v1.5 (winner QRCE 3rd BP Competition 2009)

  • 1. Populace Ads “Online Ad-Campaigns for Small Business” Business Plan for Populace Ads: One Stop Online Publicity for Small & Medium Businesses “To Democratize Online Advertising” Muhammad Arrabi arrabi@gmail.com Santa Clara, CA (425) 591-3734 Version: 0.4 Last Update: 11/16/2008 2:45 AMThe components of this business plan have been submitted on a confidential basis. It cannot be reproduced,stored, or copied in any form without permission from the author. Do not copy, fax, reproduce, or distribute without permission. 1
  • 2. Populace Ads “Online Ad-Campaigns for Small Business” Revisions History Date Author NoteOct 12, 2008 Muhammad Doc created. company description and competitive advantage.Oct 16, 2008 Muhammad Full first draft: ,marketing, plans, competitorsOct 17, 2008 Muhammad Initial financial planOct 24, 2008 Muhammad Minor fixes.Nov 16, 2008 Muhammad Incorporated feedback from competition, rewrote execution plan. New financial plan. 2
  • 3. Populace Ads “Online Ad-Campaigns for Small Business” Table of Contents1 Executive Summary .................................................................................................... 4 1.1 The Opportunity ................................................................................................... 4 1.2 The Need: seed money ......................................................................................... 4 1.3 The Forecast ......................................................................................................... 5Market Analysis .................................................................................................................. 6 1.4 The Industry: Online Advertisement .................................................................... 6 1.4.1 Size and Growth ............................................................................................ 6 1.4.2 The Industry Structure .................................................................................. 6 1.5 Target Segment: Small and Medium Businesses ................................................. 7 1.6 Further Details on Ad Agencies ........................................................................... 82 Competition................................................................................................................. 9 2.1 Overall Solution Competitors .............................................................................. 9 2.2 Internet Interface Companies ............................................................................. 10 2.3 Ad Agency Tools Companies ............................................................................ 103 The Company: Populace Ads.................................................................................... 11 3.1 Mission and Goal ............................................................................................... 11 3.2 Product Description ............................................................................................ 11 3.2.1 The Main Service, the Website ................................................................... 11 3.2.2 The Partners Service ................................................................................... 13 3.2.3 Pricing ......................................................................................................... 13 3.3 Competitive Advantage ...................................................................................... 13 3.3.1 Initial Competitive Advantage .................................................................... 13 3.3.2 Sustainable Competitive Advantage ........................................................... 144 The Operational Plan ................................................................................................ 15 4.1 The Prototype Stage ........................................................................................... 15 4.1.1 Needed resources ........................................................................................ 15 4.1.2 Goals ........................................................................................................... 16 4.1.3 Exit Criteria................................................................................................. 16 4.2 Target Market Strategy....................................................................................... 16 Financial Forecast ..................................................................................................... 17 4.3.................................................................................................................................. 17 4.3.1 Personnel ..................................................................................................... 17 4.3.2 Technology Expenses ................................................................................. 17 4.3.3 Sales Forecast.............................................................................................. 17 4.3.4 Income Statement........................................................................................ 185 Team ......................................................................................................................... 186 Critical Risks ............................................................................................................. 19 3
  • 4. Populace Ads “Online Ad-Campaigns for Small Business”1 Executive Summary1.1 The OpportunityThere are 15 million Small & Medium Businesses in the US, most of these companiestarget local regions. It is estimated that local annual ad spend in the US is $100 billion.Yet, only 7% of the SMBs put ads online.Why?Because currently online marketing requires Marketing and Technical expertise thatmany SMB owners do not posses nor can they afford to hire consultants for.Populace Ads will democratize online advertising by inventing a new service that lowersthe barrier for SMBs. The company will develop a website that is both easy to use andaffordable for SMBs to advertise online.At the heart of Populace Ads’ solution, is an inventive Online-Ad-Engine that willautomate creation and management of online ad campaigns. This will reduce the costpoint for us, where we can offer our services at a very competitive and affordable price.The resulting campaigns will be less customizable – so not suitable for big companies,but productive for small & medium businesses.SMBs make up a huge segment, not just in the US, but around the world. Our solutioncan easily be translated to many languages and to support many business verticals.1.2 The Need: seed moneyOur execution plan includes 3 stages: 1- Prototype: spend 6 months building and optimizing the core engine and proving that our ideas work for about 10 customers in one or two verticals. 2- US Market: spend 1-2 years focusing on expanding into several market verticals, and adding support for many advertisement channels (content, video, etc.) 3- International Market: once well positioned, work on expanding our offering to many new markets around the world in many languages and regions.We need funding for the first stage. In this stage, we will create a prototype of theOnline-Ad-Engine to test the 3 main assumptions: 1- That automating these campaigns is possible at such low cost. 2- That online advertisement makes financial sense for small businesses in certain verticals. 3- That we can reach SMBs and convince them to spend ad money on internet campaigns.For this we have a 6-month plan that will require around $50,000. This will pay thesalaries for 3 engineers. The salaries of the founders will be deferred. 4
  • 5. Populace Ads “Online Ad-Campaigns for Small Business”1.3 The ForecastIf our plan works, and we are able to build a system that would support 1:500 ratio ofSEM specialist to number of customers, by year 3 we can grow to support around 3000customers and cross the $3,000,000 revenue per year. 5
  • 6. Populace Ads “Online Ad-Campaigns for Small Business”Market AnalysisIn this section we introduce the online advertisement market, and then focus on the SMB osegment.1.4 The Industry: Online AdvertisementOnline advertisement is a sub group of total advertisement industry. It includes Ads sub-groupserved on the internet in different forms like Text, Image, Video, and Interactive Forms.It also includes Mobile Ads served on cell phones through the internet. ds1.4.1 Size and GrowthIn the US, Online Ads revenue in 2007 was estimated at $21 billion dollars at a %26increase from 20061. This is about 20% of the total advertisement annual revenue.Companies are seen generally to be switching ad dollars from traditional channels generally(newspapers, tv) to online ones. U.S. Online Advertisement Spending $25.0 $21.2 $20.0 $16.9 $ Billions $15.0 $12.5 $ $9.6 $10.0 $8.1 $7.1 $6.0 $7.3 $4.6 $5.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 20071.4.2 The Industry StructureThe Online Advertisement Industry is mainly made of the following groups: 1- The Advertisers: the companies paying for ads. Examples: : a. Coca Cola (national ads, national product) b. Fry’s Electronic Shop (national company, local products)1 IAB and PriceWaterhouseCoopers, Internet Advertising Revenue Report for 2007, May 2008, url: ,http://www.iab.net/media/file/IAB_PwC_2007_full_year.pdfhttp://www.iab.net/media/file/IAB_PwC_2007_full_year.pd 6
  • 7. Populace Ads “Online Ad-Campaigns for Small Business” c. Tres Amigos Restaurant (local business, local service) 2- Ad Agencies: companies that create the ads and manage them for the advertisers. Some advertisers choose to take this role. a. Consultants: Most of companies in this category work as consultants, offering expensive services to advertisers. Monthly cost is around $5-20K per customer, and more. Examples:2 i. iCrossing, $31.3 million revenue in 2006 ii. 360i, $12 million revenue in 2005 b. Aggregators: few agencies attract large number of Medium-size businesses and offer lower-price less-customized ad campaigns for them. Monthly cost is around $2-8K per customer. Examples: i. Cobalt Group, the auto-vertical. c. Tools Providers: These are software companies that produce tools to help Ad Agency Consultants in their work. Examples: i. Efficient Frontiers ii. Search Ignite iii. Clickable 3- Ad Network/Ad Servers: Companies that collect the ads and serve them on the internet. Examples:3 a. Google: around 35% of ads on the internet. b. Double Click (acquired by Google in 2007): 34% c. Yahoo: 12% d. MSN: 10% e. AOL: 5% 4- Publishers: The sites where the ads appear. Most publishers are smaller sites that sell “ad real space” on their web pages to the Ad Networks. Examples: a. Google Search Results, the search engine results page is the biggest ad real space on the internet. b. Yahoo Search Results c. CNN, news websites sell ads between their articles. d. Joe’s blog, some personal website.1.5 Target Segment: Small and Medium BusinessesThere are about 15 million Small and Medium Businesses (SMB) in the US4, and most ofthem are of local-nature, like restaurants, small hotels, construction services, local stores,2 Forrester Research, The Forrester Wave: Search Marketing Agencies, Q4 2006.3 Attributor, The Ad Network Pie, March 2008, url: http://www.attributor.com/blog/get-your-fair-share-of-the-ad-network-pie/4 The Kelsey Group, 2007, through: Marchex, Perspectives on Local Online Advertising, 2008. site:http://www.marchex.com 7
  • 8. Populace Ads “Online Ad-Campaigns for Small Business”etc. Companies in US spend around $100 billion annually on Local Advertisement (bothonline and traditional channels)5.The marketing and technical expertise needed to advertise online is rather high. Thiscreates a knowledge barrier to entry. This is why there is a lucrative industry for AdAgencies that specialize in creating and managing these ads.As a result, smaller businesses that cannot afford Ad Agencies do not advertise online.Out of the 15 million SMBs in the US, only 7% do online advertising6.Online Advertising can be very effective for SMBs. According to Yahoo Research, 88%of online advertisement revenue comes from purchases made in brick and mortar stores7.Furthermore, 90% of customers prefer to buy locally after doing research on the internet8.1.6 Further Details on Ad AgenciesIn this section I explain few points on how Ad Agencies add value to their customers.Ad Agencies create value to the advertisers by providing technical and marketingexpertise for online advertisement. This can be divided into the following: 1- Creating the Ad Campaigns: a. Creative Ad Copy: This requires marketing knowledge (e.g. what buzz- words grab attention of buyers?) b. Campaign Structure: this requires both marketing strategy and technical knowledge on creating big online ad campaigns. c. Triggers: Online Ads require configuring triggers for the ads. This requires both marketing and technical knowledge. 2- Managing the Ad Campaigns: a. Running the Ad Campaign on different channels, like Google & Yahoo. Requires technical knowledge and marketing tactics. b. Running different campaigns at different times. Again, requiring both technical and marketing knowledge. 3- Optimizing Ad Campaigns: a. Replacing Creative Ads with more successful ones: technical knowledge. b. Changing the bids on keywords depending on ROI: technical and marketing analysis. c. Optimizing ad campaign structure. Again requires technical & marketing strategy.5 Insider’s Report, Robert J. Coen,Universal McCann, December 2007, through Marchex, Call-BasedAdvertising, 20086 The Kelsey Group, 2007, through: Marchex, Perspectives on Local Online Advertising, 2008. site:http://www.marchex.com7 Yahoo! Research, Research Online, Buy Offline, 2007.8 Yahoo! Research, Research Online, Buy Offline, 2007. 8
  • 9. Populace Ads “Online Ad-Campaigns for Small Business”As we can see, running an online ad campaign requires a good amount of marketing andtechnical knowledge. Automating this requires further IT knowledge.Ad Agencies’ employees manage ad campaigns manually. They use some tools toautomate few parts of this process. However, most of the automation is focused onanalysis of results, and copying the same campaigns to several channels (e.g. Google,Yahoo, & MSN).2 CompetitionIn this section I will list the main companies and ad agencies that can target SMBs (i.e.low-cost solutions).2.1 Overall Solution CompetitorsThese Competitors provide over all help to customers.Due to high cost of creating and managing online advertisement campaigns, Ad Agenciestend to focus on customers with big budgets. Aggregators drive their cost down bycreating semi-automated solutions. The semi-automated solution usually requires a 1:15ratio of agent-to-customer.I could not find any company that supports SMBs with budgets ($50-$1000), but theclosest I found are: 1- Marchex.com: an SEM consulting focusing on local advertising. a. However, they seem expensive, and they do not show pricing on their website. b. They list Adobe & Microsoft as some of their customers, so I think they target big customers with local online advertisement interest mainly. 2- CobaltGroup.com: they specialize on Internet Marketing Services for Automobile Vertical. They offer SEM advertising in addition to site hosting and lead managing. a. They are focused only on auto-dealers b. Their system is semi-automated. c. Thus, their monthly service fee is ~$1500, in addition to a markup on ad spend. 3- Individual Consultants: Individual consultants, usually students or entry-level online marketing specialists, may charge small fees to gain experience and attract early business. a. This is not a sustainable competition. 4- The SMB owners themselves: few SMB owners might have the technical and marketing expertise to run their own ad campaigns (e.g. if they already have an Online Business, and thus are affluent with web technologies). a. Their solutions will be limited. 9
  • 10. Populace Ads “Online Ad-Campaigns for Small Business” b. This will be a very small slice of SMB shops. Most SMB shops do not even have a website.2.2 Internet Interface CompaniesThe following companies offer an internet interface that allows users to create andmanage online ad campaigns. The users will have to do the actual work of creating theonline campaigns: 1- Google AdWords Simplified: a. Google provides an interface to create individual ads and managing them. b. However, the interface still requires a good amount of technical knowledge. c. It also does not fill the gap in marketing knowledge. d. The interface limits the person to advertising on Google channels. e. Limited management and analysis tools. 2- Yahoo Enterprise Ads: a. Same as Google’s solution. b. Limited to Yahoo. c. Requires technical & marketing knowledge. d. Limited management and analysis tools. 3- MSN2.3 Ad Agency Tools CompaniesTool companies that produce software for use by Ad Agencies are a potential competitor.While their current offering targets SEM specialists who want a tool to accelerate theirwork, they might move in the future to offering simple tools for the advertisers directly. 1- Clickable.com: a. The biggest SEM software provider. b. Founded in 2006; still a startup, just raised Series B funding in July 2008 ($14 M). c. Focused on SEM specialists. d. They have a small product for Advertisers, but it only does Analysis and Management. e. Does not offer Campaign Creation. This leaves the user to require a lot of technical and marketing expertise to proceed. f. They do not disclose their prices, but given their target customers, it will most likely include a monthly fee and a percentage of ad spend. 2- Covario.com: a. Also a recent startup. b. Products targeted to the SEM and SEO specialist. 10
  • 11. Populace Ads “Online Ad-Campaigns for Small Business” c. They have a consulting arm.There are several other similar companies in this field that were funded recently.According to Venture Capitalists on the street, SEM startups were popular in 2006 and2007, but not as much anymore.3 The Company: Populace Ads3.1 Mission and GoalPopulace Ads’ mission is to “Democratize Online Advertisement9.”Our goal is to fill the gap in Online Advertisement market and offer an affordable andeasy-to-use service to Small and Medium (and possibly Micro) businesses. Just likeGrameen Bank, we want to be a profitable ad agency for many businesses that havesmall advertisement budgets, and achieve an economy of scale.The name of the company is not set yet. We need a name that is catchy and trust-worthyfor our customer base. The name can be finalized later.3.2 Product DescriptionThe Company’s main offering is a service, the website, for SMBs to create, manage, andoptimize online ad campaigns.The company will also have a secondary product, partners portal, with which to offer themain service through partners.The company will have a sales force to market the website to the SMBs.3.2.1 The Main Service, the WebsiteThe website will offer an affordable and easy-to-use service to create, manage, andoptimize online ad campaigns. It will be targeted to SMBs.The website will support a limited number of verticals and channels in the beginning. Anew Campaign Engine is needed to support create new Ad-Campaign types. NewChannel Plugins will be needed to support new ad-channels (e.g. Yahoo, MSN, ImageAds, Video, etc.)Interface Description • The customer starts by answering few questions about their business o Name and Location of Business o Field of business (e.g. Construction)9 Akin to Ford’s “Democratize the Automobile” 11
  • 12. Populace Ads “Online Ad-Campaigns for Small Business” o Services offered (e.g. Interior Painting, Exterior, Plumbing, etc.) • The customer chooses the type of ads: o Text ads, Image ads, possibly Video o Where to show the ads (e.g. Google, Yahoo) • The customer sets an ad budget.Voila! The customer will have a complete ad campaign created and posted to therequested channel.The website will allow the customer to: • Simple Optimization of the campaign: setting extra fields, writing few custom ad lines, preventing certain ads from running. • Simple Management of the campaign: start, stop, etc. • Analysis of PerformanceThe website will automatically take care of: • Creating the Campaigns • Optimizing the Campaigns: optimizing the bids on keywords, and general performance of the campaign.Behind the ScenesThe website will use a Campaign Engine to create the online ad campaign. TheCampaign Engine is where the IP lies. It is created by both Marketing and Softwarespecialists. The Engine can takes the customer’s input and uses it to create a complete AdCampaign.The website then pushes the Ad Campaign through Channel Plugins. The ChannelPlugins are created by Software Engineers to post the data to different places (e.g.Google, Yahoo, etc.).The website will also have an Optimization Component, that automates the process ofoptimizing ad campaigns. This system will be overseen by an Operations Teamcomprised of both IT and Marketing specialists. A fully-automated optimization enginewill be a special IP for the company. It will set it apart from competition.The website will also have a simple yet powerful UI to Analyze Performance of the adcampaigns. It is very important to prove our value to the customers. Thus, the UI is veryimportant to convince the customer that their ad budget is being spent wisely and thatthey should increase it.Finally, the website will also have a simple UI to Manage Ad Campaigns. Themanagement UI will give limited access to the user to start and stop different campaigns.The user will not see the technical details of what happens behind the scenes (e.g. thekeywords we’re bidding on, etc.). 12
  • 13. Populace Ads “Online Ad-Campaigns for Small Business”3.2.2 The Partners ServiceReaching SMBs is one of the biggest challenges. A second is that most SMBs do nothave presence on the web. By partnering with SMB Portals or Aggregators, they canfunnel customers to us, and in return offer their customers an added service.The partner’s product can work either as an API, or an IFrame component that is hostedon their website.3.2.3 PricingThe SMB PricingThere are several pricing methods that can be used: 1- Percentage of Ad Spend: we change 10-50% of ad spend. This is common in the industry. 2- Monthly Fee: this can be a progressive fee depending on the channels used for advertisement. We can offer Text Ads on Google with $0 fee, but charge $50/month for Image Ads (or require a minimum ad budget). 3- Ad Discount from the Ad Network: some ad networks will give us bulk discount for managing many accounts. This discount goes to our bottom line.Partner PricingThis will depend a lot on the partners, but most likely it’ll either be revenue sharing, orwe can charge the partner a fee for providing our service to their customers. We mightalso have to pay partners in the beginning to host our service. This can be decided at afuture stage of the company.3.3 Competitive Advantage3.3.1 Initial Competitive Advantage 1- Targeting a generally neglected sector: a. Most of the SEM consultant companies target medium and large companies to create highly customizable campaigns at high prices. The low-cost less-customizable market for SMBs is not targeted yet. b. Affordable alternatives generally require higher technical and marketing expertise than that available to most SMBs. 2- A New Approach a. The fully-automated approach to campaign generation and management is new. Several companies offer semi-automated systems that require a lot of human intervention (e.g. CobaltGroup.com). 13
  • 14. Populace Ads “Online Ad-Campaigns for Small Business” b. The fully-automated approach also requires creative campaign templates to generate the ads. Creating and optimizing these templates is a challenge and many companies are not familiar with it. 3- Large Market a. The SMB market is huge – different regions, languages, verticals, etc. b. Even if other competitors enter early, there will generally be enough space for Populace Ads to grow and optimize its operations before having to clash and compete closely.3.3.2 Sustainable Competitive Advantage 4- Delivering Results a. This is one of the most challenging tasks of running internet advertising campaigns: proving to the customer that they work. The added visibility into the results of internet ads makes it easier to the customers to notice when they are not effective (unlike traditional channels like TV & Newspapers which are less traceable). b. The Internet Advertising field, and especially Search Engine Marketing SEM, is generally overcrowded currently, which pushes advertisement costs up. c. Keeping an eye on results and spending time optimizing is a must to sustain advantage over competition. 5- Big Data Sets a. As we get more customers, we will be able to get more historical data on ads- performance, and thus we’ll be able to optimize them further. A company with 1000 customers automatically has an advantage over another with 10 customers in terms of optimizing the creative content and campaign structure. b. Staying on the Cutting Edge of Internet Advertising c. The Internet Ad space is relatively a new one, and thus is continuously going through innovation. We have to keep up with the new features to stay competitive. d. The structure of the service offered allows Populace Ads to add more channels as we go. While we plan on starting with SEM, we can grow into other areas like paid inclusion in review sites, etc. 6- Lower Price 14
  • 15. Populace Ads “Online Ad-Campaigns for Small Business” a. This is a limited advantage over companies that target large & medium businesses. They will never be able to beat our prices given their manual or semi-automated solutions. b. However this will not be an advantage over competitors targeting SMBs with their own automated solutions.4 The Operational PlanSo far we have laid down the description of the company in general. In this section weexplain the direct needs and plans at the current stage.The execution plan will include 4 main stages:Stage Length Funding DescriptionPreparation 2 months $10,000 • rewrite business plan (Google Award) • write core-engine specs • secure Angel-fundingPrototype 6-9 months $50,000 (angel- • Build dev team in Amman funding) • Build the core-engine + 1 channel + 1 vertical • Find 5-10 customers • Tune & optimize engine to reach satisfactory performance • Secure series-A fundingUS Market 1-2 years Roughly $500K • CEO + Sales team in US • Offer many ad channels • Support many verticals • Support up to 2000 customersInternational 1+ years (self-funded) • Expand into developedExpansion markets (Europe, possibly Asia) • Expand into emerging markets (a huge percentage of SMBs)At this time we’re focusing on defining and reaching the Prototype Stage.4.1 The Prototype Stage4.1.1 Needed resourcesFunding: $50,000Team: 1 VP of Engineering + 2 developers + 1 SEM specialistLegal: register a company in Jordan 15
  • 16. Populace Ads “Online Ad-Campaigns for Small Business”4.1.2 GoalsGoals of this period: 1- Build the core engine: Ad Creation and Optimization Engines. 2- Target a specific initial vertical 3- Target a specific channel (most likely Google Text Ads). 4- Find few beta customers (5-10 customers) 5- Tune-up the Creation and Optimization engines to run successful ads.4.1.3 Exit CriteriaWe can move to the next stage when the following is true: 1- The core engine is built 2- The customers are satisfied with their ad-campaign performance (the core-engine is well tuned & optimized) 3- We demonstrate that driving down the cost point for creating & managing onlye ad campaigns is feasible. The technical challenges are mostly resolved.4.2 Target Market StrategyAccording to industry research, the most local businesses searched on the internet arerestaurants (see figure below)10.However, restaurants already have many websites fighting for their online ad money (e.g.yelp.com, opentable.com). A good potential starting point is “Local Financial Services”,like local accountants, insurance, and tax offices. (figure based on industry research11)10 Organization of Online-Publishers, Local Online Media Ads To Action, August 2008.11 Organization of Online-Publishers, Local Online Media Ads To Action, August 2008. 16
  • 17. Populace Ads “Online Ad-Campaigns for Small Business”4.3 Financial Forecast4.3.1 PersonnelFollowing is the forecast for personnel hired in the company:Figures are in thousands of dollars. Year 1 Year 2 Year 3 monthly monthly monthly Position num salary annual num salary annual num salary annual CEO 0 $0.0 1 $3.0 $36.0 1 $3.0 $36.0 Marketing 0 $0.0 0 $0.0 1 $3.0 $36.0 CTO 1 $2.0 $24.0 1 $2.5 $30.0 1 $3.0 $36.0 exec total $24.0 $66.0 $108.0 Engineers 3 $2.0 $72.0 5 $2.5 $150.0 8 $3.0 $288.0 Online Ad Tech 0 $0.0 2 $2.0 $48.0 4 $2.5 $120.0 Sales 0 $0.0 2 $1.5 $36.0 4 $1.8 $86.4 Support 0 $0.0 1 $1.0 $12.0 4 $1.2 $57.6 Total $96.0 $312.0 $660.04.3.2 Technology Expenses year 1 Year 2 Year 3 num cost subtotal num cost subtotal num cost subtotalDev 3 $2.0 $6.0 3 $2.0 $6.0 5 $2.0 $10.0machineshost 0 $0.0 $0.0 1 $6.0 $6.0 2 $6.0 $12.0servermisc 12 $0.2 $2.4 12 $0.3 $3.6 12 $0.3 $3.6Total $8.4 $15.6 $25.64.3.3 Sales Forecast Year 1 Year 2 Year 3Average Customer $500 $500 $500Monthly Spend 17
  • 18. Populace Ads “Online Ad-Campaigns for Small Business”Number of Customers 100 800 2500Annual Revenue $600,000 $4,800,000 $15,000,000Keep Percentage 20% 30% 30%Annual Cost (paid to $500,000 $3,692,308 $11,538,462Ad Servers)Gross Margin $100,000 $1,107,692 $3,461,5384.3.4 Income Statement Year 1 Year 2 Year 3Revenues $600,000 $4,800,000 $15,000,000Cost of Revenue $500,000 $3,692,308 $11,538,462% of rev 83% 77% 77%Gross Profit $100,000 $1,107,692 $3,461,538% of revenue 17% 23% 23%Sales & Marketing $8,400 $111,600 $289,600Product Development $72,000 $150,000 $288,000General Admin $24,000 $66,000 $108,000Operating Expenses Total $104,400 $327,600 $685,600% 17% 7% 5%Earnings before taxes (4,400.00) 780,092.31 2,775,938.46taxes (440.00) 78,009.23 277,593.85Net Income (3,960.00) 702,083.08 2,498,344.62% of revenue -1% 15% 17%5 TeamThe Team current is made of 4 Computer Science Engineers: 1- Team Lead, Muhammad Arrabi a. MS, Computer Science, Colorado State University b. SEM certified specialist and SEM software developer. 2- Muneeb Arrabi a. MS, Computer Science, State University of New York 3- Fadi Dallasheh a. BSc, Computer Science, Princess Sumaya University 18
  • 19. Populace Ads “Online Ad-Campaigns for Small Business” 4- Ashraf Dabbas a. BSc, Computer Science, University of Jordan b. MBA, University of Jordan6 Critical RisksPossible risks for the idea: 1- The Technical Part is too hard a. The Campaign Engine or the Optimization Component may prove impossible to build 100% automated. They might require a degree of manual support. b. This will cause our operational expenses to go up. c. Operations may rely on training local talent to fill such positions. d. This will limit possible expansion since we’ll need to hire more people to support more customers, but given less expensive salaries in Jordan, the company can still succeed. 2- The local businesses do not need online advertising a. We might get high resistance from local businesses to the idea of online advertising. b. Or, online advertising might make sense to only a few verticals. c. This is a real danger, and we have to find the right vertical to grow in. If no suitable vertical is found, then the nature of the company will have to change drastically. 3- The competition compete on price a. If we succeed, we are guaranteed to have competition in our field. b. However, given the items in the ‘long-term competitive advantage’, it will become a matter of execution. I am confident we will do well. c. Customers of any form of advertising will never be too sensitive to price. Building a relationship of trust and proved value will make sure that most of our customers won’t leave us. 19

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