We are working on a venture project that will disrupt the advertising industry in Australia. Our venture will provide affordable, efficient, and optimised advertising solutions to small and medium businesses, individuals, and organizations. This venture will, however, operate differently than a conventional advertising agency. One of the main key differences will be that we will offer both, conventional and digital marketing services to our clients. The prime difference, though, will be that all the creative and digital content will be created by our contractors/freelancers.
Our venture will be a tri-faceted organization, which would comprise of the core business itself, the contractors, and the clients. The core business team would include an Account Management division in addition to finance, business development, and talent acquisition departments. Unlike a conventional advertising agency, however, our organization will not have a fully staffed creative department. Instead, there will be Creative Directors, who will be coordinating with Account Managers and the coordinators, while steering the creative aspect of the campaigns. The contractors or freelancers would solely be given the responsibility of creative and digital content creation and curation. The Account Managers and Creative Directors will decide the direction and substance of the campaign in accordance to the clients’ needs.
The main customer segment for our venture will be small and medium businesses, however our services will be open to all businesses and organizations. Small businesses, in which we are including nano businesses and sole traders, employ less than 20 people and have an annual turnover of under $2 million. Medium businesses tend to have between 20 and 199 employees with annual turnover of over $2 million. There are currently around 2 million small and medium businesses in Australia that employ 7 million people. Combined, they contribute nearly $615 billion to the economy and make up 57% of Australia’s GDP.
Depending on the client, small and medium businesses would have a budget of between 6% and 12% of their gross revenue allocated for marketing and advertising. For a business doing annual sales of $1 million, they could potentially become a client that gives us business of $60,000 – 120,000 a year. Our venture’s main focus will be to provide our customers with a more convenient and affordable solution to conventional advertising agencies. We will engage with our clients on an online platform, which would give the client the option to make a business profile, request a quote for a job, and contact our representatives. From the moment the client submits their request, our Account Managers will actively be in contact with the client until the job has been completed. Our customers would be receiving a wider range of services at a much lower cost, due to our venture’s operating structure, in addition to enjoying convenience of efficient and hassle-free work that will be up to industry standards.
As our venture overlaps a few different fields of marketing, we will have a large pool of competitors. However, we will not have any direct competitors because there are currently no companies in Australia that provide such a wide range of advertising service using a similar operating structure. Although there are several websites and services that connect you with creative freelancers, they would be less preferable to businesses due to quality control and accountability. Our main competitors, though, will be advertising agencies and digital marketing firms. Most advertising agencies and marketing firms would either require a retainer fee from the client or charge them ridiculously high commission rates. We will just be giving our clients one quote for each service, which would be lower than current industry standards. The creative and digital contractors will only be paid a certain percentage for each job they complete, thus making our business not only profitable but also more affordable to customers.
We plan on having a soft launch in Canberra for our initial stages so we can ensure the viability and success of our services in a smaller market and geographical/populated area. Our initial goal will be to create a roster of creative and digital contractors and to establish client relations with small businesses in Canberra. Between 8-12 months after out initial launch in Canberra, we plan on launching in other major Australian cities starting with Sydney and Melbourne. Operating in multiple cities would enable us to hire from a larger and more skilled pool of contractors, as well as expanding our client list significantly. Also, contractors would not be limited to working on campaigns in their geographical locations, thus increasing our efficiency.
Within the first two years of operating, we would like to offer our services nationwide in Australia. This does not necessarily mean that we would need a setup in every state or major city. Once we have established our offices in 3 major cities other than Canberra, we would have enough contractors at our disposal for creative and digital content and, an adequate number of in-house account management staff to manage clients regardless of their geographical location in Australia. As most of the communication between the client and the agency would be done either online or through phone/video calls, our operations will not be restricted significantly due to geography.
Small businesses make up the majority of the Australian economy, yet they face the most intricate challenges in growing their business. One of these challenges is advertising for their business, as small businesses often have to choose between either low cost or high quality. We aim to launch an advertising agency that disrupts the whole industry and bridges the gap in the market. We will offer accessible, affordable, and high quality conventional and digital advertising solutions mainly targeted towards small businesses. The bulk of our creative staff, other than a few creative directors, will consist of freelancers and contractors. The quality of our creative and digital content will not be compromised, as there will be an in-house account management team that will revise or approve any job before submitting it to the client. Furthermore, the clients will have no direct communication with the contractors working on their campaigns, providing a hassle-free service to our clients and preventing our contractors being poached. In order to successfully execute this venture, we will definitely need some outside guidance and help. As a team of 3 university students, we have a fair amount of ICT/development skills and knowledge in advertising and commerce. However, in order to break into the industry, it would be greatly beneficial to have someone with extensive industry experience or knowledge to guide us on our strategy and business plan. Skills and experience in tech and design would also benefit us in improving our venture.
Customers can interact with us through our online platform; this means clients can pick the product or service they want online. Whether the product/service is digital or conventional decides how it will be delivered, and these delivery times will be available at the time of request. In most cases the service will be provided through the online platform, and when a conventional marketing service is requested, any physical product will be delivered by mail.
Potential clients will be made aware of our venture through, systematic online advertisement/social media, and an ever growing networking team tasked with building relations through face to face marketing. Even after the customer has received their product, we hope to keep in touch with them; for any valuable feedback, future relevant needs, and to advertise updates/new services.
Our team, while small, has a diverse set of skills and perspectives needed for our industry disrupting venture. We have members with technical background and experience; engineers with a focus on system development and optimisation. These are necessary skills for a venture based on an online platform. We also have real-world advertising and marketing experience keeping us informed of our market's nature, needs, and problems. Lastly, we have an accountant for our financial assessments and planning, reinforcing any business decisions we've made or need to make.
Fortunately, we are all from diverse backgrounds having lived all over the world. These are priceless networks of customers and contractors we would be getting in touch with going forward in our venture. Using these assets, we have already started testing the feasibility of an online creative workforce; one of the major components needed for our value proposition. Our backgrounds, nationalities, and personalities perfectly contrast each other to complement the needs of our business.
As our company's main services include creative/design skills, someone with such skills would be a great asset in understanding the in-house staff relationships with clients and contractors. While our experience in advertisement/marketing is sufficient in understanding our role as a business, we'd still greatly benefit from another experienced member with regards to the business' own marketing/advertisement.
Our venture will be mainly based online, however, a small in-house staff will still need to be accommodated and our freelancing creative workforce would need to be financially accommodated. This leaves us with the need for financial investment, office space, and some minor technical infrastructure.
The business model's main costs will consist of lump sum payments made to hired freelancers/contractors. These costs, however, will not be relevant until after we have launched and gotten our first official customer.
Our main setup costs consist of developing the website for our customers and marketing in the ACT. We are seeking $8,000 from the InnovationACT funding pool. The $8k will be enough to sustain us through the development stage and the first couple months of operations in the ACT. Of the total funding, $2,000 will be spent on developing and testing the website. The highest initial cost will be for marketing and customer acquisition. Half of our sought funding will be allocated for marketing and client acquisition, as our aim is to capture as many clients as possible early on. The remaining $2,000 will be spent on computer software and programs, online hosting and cloud services, and business registration.
Our list of potential partners are as follows: Canberra Innovation Network, ACT Cabs, ANU and the students of ANU, UC, CIT, other business networks.
We are partnering (or hoping to partner) with these organizations in order to network and gain insights into entrepreneurship.
Ideally our partners will enable us to meet with potential clients. In turn, the team will be providing perks, such as discounts for our services, to our partners.
Our customer base is comprised of small and medium businesses who cannot afford to pay the very costly services of large advertising agencies.
Our customers will be given a quote very quickly with various tiers of fees. For most services that we provide the payment will be an online transaction that is a one-off. For some other specific services, such as managing a client's social media account, the payment will be recurring (in a similar vein to a subscription).
Our clients are willing to pay at 10%-25% lower than the market rate. We consulted numerous potential customers.