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Apr 15, 2015 3:00 EST

Gruvi: a platform to provide entertainment brands with a powerful set of tools for their marketing campaigns, without the need for hiring experts, developers and designers

iCrowdNewswire - Apr 15, 2015

Gruvi

Gruvi

Gruvi has designed a platform to provide entertainment brands with a powerful set of tools for their marketing campaigns, without the need for hiring experts, developers and designers. The company to date has worked with studios such as HBO, Warner Brothers, Disney and Universal.

The Idea

Gruvi – Cleverly reach your audiences

Gruvi has designed a platform to provide entertainment brands with a powerful set of tools for their marketing campaigns, without the need for hiring experts, developers and designers. These integrated tools simplify the customer journey making it easy for audiences to connect with their next film, show, concert, event, or game purchase through social media.

Gruvi’s marketing platform strives to provide the customisation & simplicity of WordPress with the reach and power of Twitter and Facebook to cleverly connect with your audiences on social media.

Here’s a short demo video of how the platform works and what it creates.​

A. What are the problems that Gruvi solves?

From our experience, marketers working in film, TV and other entertainment mediums know how difficult it is to reach audiences online and persuade them to watch their content. Despite budgets growing year on year and digital marketing offering exciting opportunities, we believe current ROI regularly falls short of expectations. Why? We believe most digital marketing still follows outdated practices that were originally devised for the world of print and television marketing.

In our experience brands rarely take advantage of the agility, personalisation and speed with which digital campaigns can be created and optimised. After working on 200+ film campaigns, including major Hollywood studios, we built our platform to manage the creation, publishing and tracking of digital marketing campaigns, and to solve the following 4 key problems:

1. The process of managing, deploying and executing digital campaigns is complex and expensive.

From our own personal experience, creative costs, back-and-forth communication between brands and agencies, and the outsourced publishing of digital campaigns can be a time-consuming and costly affair. We believe it doesn’t need to be; technologies are moving forward and brands are still catching up.

2. Setting up and coordinating digital advertising campaigns is fraught with complexities.

The average media plan takes 40 steps to complete with multiple points of contact and the move towards cross-channel campaigns involving web, mobile and social should only adds to the layers of communication and potential confusion. We feel this results in lost opportunities and a lack of clarity on the campaign’s return on investment.

3. Audience attention is fragmenting across devices and platforms.

We believe traditional mass-marketing tools are losing their potency with the industry facing the challenge of a wider array of technologies and websites where users can interact. This makes the process of broadcasting advertising messages to potential audiences complicated and expensive. For example, in the age group 15-25; 96% are using social media networks, 78% trust peer recommendations but only 14% trust advertisements (Eric Qualman). To succeed, we understand marketers need to meet the consumer where they are and on the consumers’ terms, facilitate the conversation, stimulate the buzz and influence the influencers to build word of mouth about their content.

4. Competing for attention is dynamic and challenging.

There is bewildering wealth of new TV shows, Films, Documentaries, Mini Series, etc being marketed at any one time so marketeers have to be careful how they pick their audiences, as well as be prepared to switch targeting and creative on the fly as the campaign unfolds.

B. How is Gruvi different?

Gruvi is novel- To the best of our knowledge, there is no dedicated technology solution for creating and publishing the digital campaigns of entertainment content on social media platforms, across web and mobile. From our experience marketers and their agencies have to use a patchwork of different technologies and manual processes, and stitch them together, which adds complexity and ingrains inefficiency.Gruvi is designed to meets all the needs of an entertainment marketer in a single platform.

Gruvi strives to be simple and effective – We believe WordPress is successful because it lets users create websites and publish them online quickly & easily from one simple-to-use platform. Gruvi aims to do the same for digital marketing. Marketers can quickly create a campaign and publish it directly to relevant social media (or anywhere on the web), make changes to that campaign on the fly and track the results in real time. Designed to have no coding, simple creative requirements and powerful functionalities (including game creation toolsets for promotions and ticketing for driving sales) that should empower brands and their agencies to discover the real ROI on their campaigns.

Create apps where the users are interacting – From our experience audiences are fragmenting to new social media or platforms that are relevant for their specific interests, groups of friends or acquaintances. Our solution is designed to allow marketers to meet these needs and create interactive advertising experiences that work in these new environments.

Create rich interactive experiences that go deep into the user experience – Engaging users deeply within their digital and social experiences is a proven strategy; combining good creative with contextual advertising converts users 42% better than traditional advertising methods. Gruvi is designed to allow marketers to create context-aware advertising experiences that move audiences through from watching the promotional content to engaging with or buying the product.

We’re striving to solve a global problem – We believe brands and agencies all over the world struggle to rapidly create cost effective campaigns with regionally relevant creative (artwork, video, etc) and content. The Gruvi platform has been specifically designed to cope with global campaigns, including simple features for cloning campaigns and swapping out creative & messaging for particular markets.

C. What have we achieved to date?

We’re an established business with revenue: Over the last four years we have worked on 200+ movie campaigns. We have signed master-service agreements with Warner, Sony and Disney as well as worked with 15+ local studios and companies across Europe and the US.

We’ve built and launched a commercially successful beta of our platform: Gruvi switched from an agency and services approach to launching our platform to focus on being a technology vendor. We are 12 months into the development of this product and have monthly recurring licence fees with the likes of Disney and Cinemaxx.

We are certified by some of the biggest digital advertising brands: We’ve recently completed a lengthy due diligence and we are now certified Rich Media provider with Google (inc. Youtube), Massmotion Media and Mediamind.

We’ve successfully launched into new product verticals: As of September 2014, we’ve expanded into exhibition and launched with CinemaxX, we are planning the roll out of this product in Q2 using the Baden Baden film event as the launch platform. As of February 2015 we are launching a test of our service with HBO in the Scandinavian territories and have an additional trial planned with BSkyB in Q2 2015.

Case Studies

Here are some case studies that show how we believe Gruvi performs compared to present industry practices:

1. A comparison of Gruvi’s Facebook Newsfeed app and traditional banners ads: the Newsfeed app is 33x more effective. (Source)

2. Real CPA: How Gruvi’s apps reduced the cost of getting people to see a movie to just £1.39. (Source)

3. How the ability to make quick adjustments to marketing campaigns can deliver great results. (Source)

4. Registering users: We worked on a trial with BskyB and for £850GBP – 12,000 people opened the competition widget we created, 5600 took the quiz, 2600 filled out the form to register for the promotion.

D. How does Gruvi Work?

Imagine you’re a marketer at a brand and you have a piece of entertainment content you need to advertise online. You can contact your agency and begin this convoluted process, which is unlikely to provide you with a clear indication that your money is being well spent!

Or, you can login to Gruvi and create a digital campaign in a very short space of time: (Click here to watch a short demo video of this)

  1. Select from a range of crisp, flexible and well-designed templates.

  2. Upload your creative – images, video etc.

  3. Adjust styling through a point-and-click, WYSIWYG interface.

  4. Select and customise the point-of-sale/engagement:

    1. Geo-localised ticketing and showtimes (in-built)

    2. Promotions and competitions

  5. Click to publish to all relevant social media, mobile and web.

  6. Target and promote to users where they are actively engaging in conversations about your brand’s content – on Facebook’s Newsfeed, Twitter or in the future within Gruvi’s own network of blogs and websites, etc.

  7. Monitor and track the success of your campaign in real-time, making immediate adjustments to optimise performance.

E. The need for funding

There is a better way to market content and events; a simpler, more elegant process that yields much better results without the frustration and stress of today’s outdated practices. The future of advertising will provide users with rich interactive experiences on web and social platforms that allow them to easily share their experiences. These new forms of advertising will be deployed programmatically from a creative and placement perspective to yield better results for less cost. We believe Gruvi’s platform is already a long way towards achieving this, we need your support in order to get their before the competition does. Never has the saying the right message, to the right user at the right time been so close in online advertising! In order to achieve this product vision Gruvi is seeking £120,000 in seed funding to:

  • Expand/improve our product offering in three key areas:

    • Content Management – Improve UX/UI, develop features specific to the verticals we will business develop into.

    • Social Media Marketing – Expand beyond Facebook to cover all major social networks and build the ‘Community Builder’. Begin to explore expansion of our platform into the Chinese social networks, RenRen and Sina Weibo.

    • Marketing Automation – Allow easy deployment and management of advertising to exchanges (Twitter, Facebook and the Google Display Network). Begin process of creating a new network specialising in native ads using Gruvi’s technology.

  • Business development of client relationships across regions, either directly or through reseller agreements, including:

    • Expanding our subscription model e.g. approach smaller agencies and businesses and offer access to the same marketing power as the major film studios.

    • Begin investigation into finding suitable resellers and partners for expansion into China.

    • Move into new entertainment verticals, including games, concerts and other major ticketed events.

  • Develop marketing and PR around our Gruvi and our technology and attend international events such as Baden Baden (major film and cinema trade show in Germany, etc).

The Market

A. Key Trends

Trend 1 – Sector budgets are massive and growing: The Global Media Industry is poised to spend up to US$1.9 Trillion by 2017 on advertising. By 2018, internet advertising will over take the budgets for TV. The media/entertainment sector occupies 21% of the overall UK marketing advertising spend. Using social media to market entertainment content is a fast growing and dynamic industry. Advertising spend on Facebook is set to rise to $14.2 Billion p.a. by 2015, with spending on advertising in Social Networks in Europe estimated to reach $2.58 Billion in 2014.

Trend 2 – New markets are emerging: Huge growth potential in China and in the Chinese entertainment content market. Brands are looking at China as new market to enter, and we believe the same is also true of Russia and the rest of the Far East. New market should represent new opportunities for global entertainment brands, and for technology solutions with the resources to scale up to meet the demands of these new markets.

Trend 3 – The market is ripe for disruption: This growing market is in a state of flux, with traditional agencies struggling to find their position in the value chain as a result of numerous threats to their business model as well as brands becoming increasingly frustrated with the high costs, and lack of transparency and control. We believe this sets the market up for huge levels of disruption over the coming years.

Trend 4 – The rise of Programmatic advertising: The bulk of advertising budgets will be spent automatically, with computers deciding when, where and for how much advertising space is bought across the web. Programmatic buying accounted for 53% of ad spend in 2013 and will grow to 83% of all U.S. digital display ad spending by 2017 (Magna Global).

Trend 5 – Changes in advertising technology: The growth of new internet technologies is ushering in a variety of new ad-formats including native advertising, which is set to grow to an estimated market value of US$2.85 billion by 2014. We believe advertisers are increasingly drawn to native ad units because they provide richer engagement and improved ROI. Studies have outlined the importance of impactful creative for a successful advertising campaign; messaging, formats and aesthetics, account for more than half of the total sales impact, with less than 50% due to media variables such as targeting, weight, etc.

We’re seeking to raise funds on Crowdcube to capitalise on these key trends and the growth in digital budgets. We will further develop the Gruvi platform to allow entertainment brands to globally:

  1. Build cutting-edge, rich interactive native advertising campaigns for all relevant marketing platforms and social media

  2. Publish these campaigns directly to websites, social media and advertising exchanges, and to do it programmatically.

  3. Expand and follow the major entertainment brands into emerging markets.

With continued focus on speed, cost reduction and campaign performance/improvements.

B. Tackling The Market

Gruvi is focussed towards the entertainment vertical of the growing global media industry: film, TV, games, concerts and events. The sheer size of the market means capturing only a small segment of the overall marketing spend should yield huge revenues. Focussing on film, we feel its easy to see how we can meet our end of Year 1 revenue target of £10,000/month per directly managed territory. Over the past four years, Gruvi has worked with several major US film studios, and our relationships and track record with these brands makes us confident of securing a major contract. A studio would likely make up the bulk of our revenue target through the subscription fee and the Community Builder product. If the same studio drives ad-spend through the platform we could capture a substantial part of their digital spend:

  • In 2007, average marketing spend for a film was US$36 Million – we estimate this figure is now closer to US$50 million (or roughly £33 million) given the figure was just US$31 million in 2001.

  • Of the US$50 million, up to 20% is spent on digital

  • If a studio releases 16 films/year, that equates to US$160,000,000

  • If we capture 4% of this spend, that’s US$6,400,000 million passing through Gruvi’s platform

  • For a usage fee of 2%, revenue = US$128,000 or £84,000/year.

C. What makes Gruvi stand out in the market?

Novelty – To the best of our knowledge Gruvi is the only global and scalable solution that combines interactive social advertising with automated and targeted placement on mobile experiences and social media.

Global Focus – We aim to standardise a market practice that moves the industry away from bespoke, laborious and expensive campaigns.

Speed and Elegance – Gruvi aims to exploit the difference between the brands and their agencies for social, offering a technology solution that can meet the changing demands of the evolving digital marketing environment and will look to develop these for the emerging and developing markets that are experiencing high rates of growth currently.

The People

  1. Ben Johnson – CEO/Founder, has spent the last 8 years supplying digital marketing solutions to international film studios such as Sony Pictures, Warner Bros and Disney. In 2010 he obtained an MBA in Technology Management. He regularly speaks at events to do with marketing and promoting films and entertainment content online and collaborates as a resident expert in several film studies including the 2013 study commissioned by the EAC “A PROFILE OF CURRENT AND FUTURE AUDIOVISUAL CONSUMERS”.

  2. Julio Santos – CTO. Júlio is a software engineer living in Dublin. He holds a Masters in Informatics and Computing Engineering. His primary expertise is full-stack development and deployment with Ruby on Rails and JavaScript. He has programmed professionally for more than 7 years, and has 4 years of professional experience with Ruby on Rails. At Gruvi, he has developed, and managed the development, of several small- and large-scale web/mobile applications which last year alone handled millions of visitors globally. He is also a great cook.

  3. Matthew Kidd – COO. Matt has worked his way up from intern and now has 2 years of business development and analytics under his belt. At Gruvi, he has managed the roll out of over 100 campaigns and the development of a showtimes/data solution and a feature-set for cinematic/theatrical clients. He is also heavily involved in client support. Matt holds a Masters in Economics and Politics.

  4. Joao Lago – João started his career developing interactive touch screen applications expos & conferences and has 3 years experience developing interactive Flash applications on the Facebook timeline. At Gruvi he has developed the timeline, fan page and mobile pages for dozens of campaigns over the last 3 years, mostly dedicated to the movie industry. He’s an inveterate movie watcher and an amateur movie editor.

Advisory board

  1. Jeff Ulin – legal and business affairs

  2. George Tennet – planning and scaling sales operations

  3. Alex Farcet – networking to investors

  4. Joshua Mortensen – advertising and adtech specialist

The Financials

These notes should be read alongside the Financial Snapshot

SALES: Key sales drivers

  • New product lines, and improved existing product offering, will open up new revenue streams that we cannot exploit without funding. Key sales/revenue streams are:
  • 1. Subscription fee for the Gruvi platform
  • 2. Portion of ad-spend revenue driven through the platform by clients. Clients will use our platform to create and deploy their ads as: (1) It’s easy to use and creates a simple workflow; (2) They can take advantage of Community Builder to reconnect with audiences from previous campaigns; and (3) to deploy ads via Gruvi’s Native Paid Exchange Network
  • 3. Community Builder fan usage fees, dependent on the number of users the client has access to
  • The reseller programme will allow us to operate via proxies in multiple markets worldwide more cost effectively. Moreover, the reseller agreements will result in the sales of our products being conducted by professionals with local knowledge of market structures, demands and possibilities – potentially allowing more revenue to be derived from certain markets than Gruvi would be able to secure alone without the cost base of local sales teams.

USE OF FUNDS: Outline how you plan to use the funds you raise on Crowdcube?

  • Expand and improve our product offering in three key areas (as identified in ExactTarget’s 2014 report):
  • Content Management – Improve ease of use and UI, develop features specific to the verticals business develop into.
  • Social Media Marketing – Expand beyond Facebook to cover all major social networks and collect user data for remarketing using Community Builder product. Begin to explore expansion into China, and the Chinese social networks RenRen and Sina Weibo
  • Marketing Automation – Allow easy deployment and management of advertising to exchanges and social network. Begin process of creating a new network specialising in native ads using Gruvi’s technology.
  • Business development of client relationships across regions, either directly or through reseller agreements, including:
  • Expanding our subscription model e.g. approach smaller agencies and businesses and offer access to the same marketing power as the major film studios
  • Explore expansion possibilities and partners into China
  • Move into new entertainment verticals, including games, concerts and other major ticketed events.
  • Develop marketing and PR around Gruvi’s platform.

EXPENSES AND PROFITABILITY: Please comment on your expense levels, gross and EBITDA margins

  • Staff increases are modest as a large portion of our business plan involves reseller agreements when expanding into new markets globally. We do however increase staff by 300% over the three year period to cope with larger client workloads, development schedules and future demands from expanded operations
  • Marketing costs scale with increasing revenue
  • Currently, staff operate remotely. As the company and sales expand we will move to a formal, centralised location, thus incurring the need for rent to be included in our overheads from July 2016

EXISTING DEBT OR EQUITY INVESTMENTS: Please outline the background to any existing debt or equity finance on the company balance sheet

  • Directors loan: £14,000
  • Debt: £12,200 (To Nina Jansen – 120,000DKK)

CASH: Cash burn rate, Operational cashflow, when will you need to raise the next round?

  • Current operational cashflow is around £6,500/month.
  • Cash burn rate for the 8 months following receipt of Crowdcube funds will be roughly £11,700/month. Unlikely to be a second raise until end of Year 2, or in Year 3.

The Exit Strategy

Trade Sale

Social Enterprise solutions have been snapped up by 3 Major market players – Salesforce, Oracle and Adobe. Also talent agencies in LA are working on acquisitions of technology companies that can help media brands with their marketing. This investment from new and entertainment focused VCS is part of new trend that is particularly interesting.

By 2017 we expect to reach monthly revenue of over £270,000 with an aim to reaching £3,200,000. As we are a niche player in the Enterprise Space based on Revenue we expect a 2.8 multiplier to apply. Using these figures we expect our valuation to be around £9,000,000 at exit.

Share Types

This company is offering both A and B shares. If you invest £1,500 or more you will receive A-shares which have full voting rights. If you invest less than £1,500 you will receive B-shares which have no voting rights or pre-emption.

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