AdviDeals is a Brisbane-based group-buying website offering advertising deals to small and large businesses on a daily basis.
Operating exclusively as a B2B platform, AdviDeals also enables media owners to present their advertising media to business owners and marketers who are looking for new opportunities.
Founding director Brenton Tickner says the idea came about after working with companies keen to experiment with advertising, but constrained by the financial risk of trying something new.
Along with his colleague Rachael Williams, Tickner talks to StartupSmart about the pros and cons of working with media owners, and using Tony Abbott’s bathers as a marketing ploy.
What niche did you identify with AdviDeals?
After several years’ experience in marketing and related services, we identified significant opportunity for a platform introducing advertisers to media owners.
Our experience has shown advertisers, particularly those in the SME sector, are generally reluctant to try new advertising opportunities due to the perceived costs, without any guarantee of a result, and are often overwhelmed by the very broad range of options on the average rate card, ie. positional loading, sport colour, full colour loading, cost per column inch, etc.
Over the last three to four years, we’ve also noticed that marketing budgets are getting tighter and SMEs are more cautious about trying something new, even if it could help them immensely.
As a result, we developed AdviDeals so that we can work directly with media owners to present a simple, packaged offering to potential advertisers at a minimum 40% discount from market rate to inspire new interest in the media owner’s advertising.
This allows media owners to showcase their ideal advertising packages to a completely new and potentially long-term customer base, and provides advertisers the incentive to try new forms of advertising to establish if it works for them.
How long did you work on the business before you launched it?
The idea for the model came during a team discussion in the first half of this year. We’re currently nearing the second stage of our two-stage launch.
Our initial launch occurred in September and we’ve since been working behind the scenes to build our subscriber base and finalise testing of our website.
We are expecting to launch stage two within the coming weeks, which will see our first deals go live.
How did you fund the business?
A lot of the expertise required to launch the site and bring the model to market is in-house thanks to the diversity of our start-up team, so we were able to self-fund the launch.
It’s difficult to say what our total start-up costs are but the only real outsourced cost would be some of our website development.
How many staff do you have?
To date, we’ve focused on getting the business up and running with minimal outside involvement, and have managed to do the bulk of the work with just our three directors, a graphic designer and a web developer.
The diverse background of our team, stemming from accounting and corporate advisory, IT, marketing and PR, has enabled us to handle the majority of work in-house.
How do you promote the business?
Given AdviDeals provides such a unique platform, we’ve been able to attract a lot of PR from our business model.
Our initial launch strategy just involved a media release to key marketing magazines, designed to get media owners onboard. The response was overwhelming.
Shortly after, we saw a unique opportunity to use our positioning as an innovative advertising platform to promote a charity we all support, and launched a campaign to sell advertising space on Tony Abbott’s budgie smugglers to raise funds for surf lifesavers.
Although we were able to obtain great support from the media and public, we could not win over Tony Abbott’s representatives.
What are your revenue projections for 2011/12?
We’re focused on tapping into the 10-20% marketing contingency budget that most organisations put aside for marketing opportunities as they arise.
We have some general cashflow modelling of expenses and break-even points, but the true test of the business model will be in the months after we go live with the second stage launch.
What are your points of difference?
We offer the only available platform for media owners to sell their advertising space in a pre-defined introductory package to a database of new advertisers, with a focus on traditional media options.
We offer the ability to limit deals sold to one per-person or company, ensuring the deals are used only for evaluation purposes and do not devalue the media owners’ services in any way.
For advertisers, we offer a unique opportunity to trial the effectiveness of new advertising media at a significantly reduced financial cost.
If they find the deal they purchase is effective for them, the chances of them dealing with the media owner again in future are very high.
What has been your greatest challenge and how did you overcome it?
The deal-a-day market has definitely revolutionised the way consumers purchase products and services. What we’ve found is that a lot of deals on products or services are repeated frequently.
Consumers are very savvy and will generally hold off a purchase if they think it is going to be available significantly cheaper at some point in the near future.
This can have the obvious effect of devaluing the product or service in the market, and is a big risk to product or service providers.
The professionals we deal with on a day-to-day basis are well aware of this, and understandably express the same concerns for their own offerings.
Overcoming this stigma around the generic deal-a-day model, and helping media owners to understand that this risk does not apply with an AdviDeal, has been our biggest challenge.
In overcoming this, we recognised we needed to redraft a lot of our marketing material to address these concerns in the first instance. Otherwise, media owners would dismiss the concept without understanding what we offer.
We now go out of our way to clarify that AdviDeals is an introductory platform, enabling advertisers to sample the media owners’ offering only to the extent the media owners allow.
This can mean limiting an advertiser to one deal only – enough to allow the trial of the medium to assess effectiveness for their business, and even not allowing repeat purchases in future should the deal be made available again.
What’s the biggest risk you face?
For us, the biggest risk is not becoming the “established platform”.
We are focused on being number one in this category, which will help protect us from new entrants, enable us to implement our loyalty programs while introducing other stepped-developments for the business.
We aim to achieve this by having the best deals, the best online service, the biggest database and the strongest brand.
Is there anything you would have done differently?
In everything that you do, there is always room for improvement but overall our team is happy with where we are at.