“We want to work in all global markets where influencer marketing is needed.”
On February 9 the SocialMedia.Market project launched its ICO, which has the potential to immediately transform the field of influencer marketing. On the eve of the introduction of their new token, the founder and CEO of SocialMedia.Market, Dmitry Shyshov, spoke about the present and future of this fairly new and rapidly growing marketing phenomenon, about the relationship between advertisers and bloggers, and about the new marketplace rules to be ushered in by the blockchain.
Q: Tell me more about your project. What exactly is SocialMedia.Market?
A: It is a solution for anyone who is interested in influencer marketing and wants to work with it. Our goal is to simplify the relationship between advertisers and influencers all around the world, to make the native advertising market on the most popular social platforms accessible to everyone, and to reduce the entry threshold for market newcomers.
Q: What’s the matter with it? Do advertisers and bloggers have any trouble interacting currently?
A: Right now, if you want to place advertising on someone’s page on a social network, you will most likely be offered three solutions: to buy a database of influencers and then proceed on your own, use an automated advertising system with very limited functionality, or hire an agency manager who will then collect a database of influencers for you and allocate contracts among them without revealing to you their real value or letting you choose exactly how to promote your product. As you can see, none of these solutions are very convenient. And if you also happen to be a beginner, then there is the risk of your project simply getting lost in the shuffle, all while paying a great deal of money and not getting a return on your investment.
Q: What is the alternative that you offer?
A: We want to create a single platform for users with various levels of expertise, both in influence marketing and in blockchain technologies, where the rules of the game will be clear to everyone. This is an automated all-in-one solution that will focus on the search for, creation, implementation and analysis of influencer marketing for specific advertising campaigns.
Q: How will your client benefit from the creation of such a platform?
A: They will get access to popular bloggers on all major social networks, a convenient CRM-system that will reduce risks and save resources for the organization, performance and analysis of advertising campaigns, as well as the opportunity to make international payments using our tokens. The latter option is especially useful for partners working in different countries, where different payment systems are being used. In addition, the introduction of smart contracts and blockchain will make it possible to streamline partnerships, standardize work and ensure secure mutual settlements.
Q: Why have influencers become so sought-after in the advertising industry?
A: Because these people are trendsetters in the digital universe. They’re the ones who determine who will go and where, what they will play, wear, eat, and listen to in the near future. When a blogger has several hundred thousand or even millions of subscribers, and their audience idolizes her and is absolutely loyal to her opinion, this creates a superb opportunity for product promotion.
Q: How loyal is this audience?
A: According to our research, today about 70% of Internet users are willing to make a purchase based on the recommendation of a person they follow online. This is a very significant number.
Q: Do you already have a pool of influencers?
A: Yes, these are influencers in the gaming industry, with whom we work daily. We have several hundreds, and in some areas – more than a thousand.
Q: Are they willing to support the project?
A: Of course, for them, this is a great opportunity to focus on creating quality content without having to think about ways to monetize it. The latter is our job.
Q: Does your working with influencers in the gaming industry mean that you will continue to make this your area of focus?
A: The gaming industry was just our entry point into influencer marketing. We want to make it accessible for all medium-sized and niche businesses.
Q: The field of influencer marketing has been around for a while. Why did you decide to work specifically in this field?
A: To some extent, it happened spontaneously. Over the past four or five years, we have been promoting projects related to video games. When, in order to promote these projects, we began to communicate with influencers on YouTube, we saw that this type of advertising had enormous potential. That was how we came up with the concept of a service that would simplify the interaction between people within this market and that, ideally, would serve as a regulator of the interaction between advertisers and influencers. Initially, we were looking for such a solution on the market for ourselves, but not having found it, we decided to create one.
Q: What do you think the prospects are for influencer marketing? Where in this market do you see yourselves?
A: According to our estimates, by 2020 it will be about a 10-billion-dollar industry. We plan to first take our project to the markets in the US, UK, Canada and the CIS countries, then to introduce it to Europe and Latin America. By the end of 2019, we plan to be working globally in every sphere where influencer marketing is needed. Users of our platform will be able to interact with one another locally or create global advertising campaigns.
Q: What makes you so confident you will be able to achieve such rapid growth?
A: The fact that we are the first blockchain-based platform that will be working in the influencer marketing sphere, and the fact that the platform will become an open marketplace, offering services in analytics and measuring the effectiveness of advertising campaigns.
Q: What about the competition?
A: There are competitors, but they provide a limited set of services. There are agencies out there that also pay influencers using tokens, but they only specialize on Instagram, for example.
Q: What platforms do you work with?
A: We plan to work with influencers and bloggers on YouTube, Instagram, Facebook, Twitch, Twitter and other online platforms. Basically, we are focused on the entire online advertising market, marketing in the blogosphere, streaming services, and social networks.
Q: Why blockchain? Would it not have been simpler to offer your services on a turnkey basis and just charge people money?
A: Blockchain today is like the Internet in the late 90’s, when people suddenly had access to a single, global information space. Because all of our projects are aimed at the global market, this technology will help us streamline a great number of processes.
Q: Which ones?
A: First, as I have already mentioned, blockchain will resolve the issue of performing financial transactions between different countries. Second, it will create trust between the customer and the contractor at the stage when they have not yet worked together, and do not know what to expect from one another. This is one of the problems facing the market. Misunderstandings often arise between the customer and the contractor during the course of the work, the claims of one party result in the distrust of the other, and, as you can imagine, this isn’t great for business. For example, bloggers do not always understand how important certain keywords, labels or tags are to a customer. They either ignore them or place them too late when the main audience has already read the post or watched the video. The tools we offer make it possible to track the effectiveness of the advertising campaign.
Q: This is obvious to everyone who has ever dealt with SMM marketing, but can you tell me how blockchain technology is useful here?
A: Blockchain allows you to write the terms of the partnership agreement into the code, in the form of smart contracts, which then exist on blockchain and ensure that the conditions of the advertising campaign correspond to its cost. This is convenient for everyone: the customer can rest assured that his requests will be fulfilled on time, and the blogger can count on incentives. For example, if audience engagement with the project exceeds the declared KPI, then blockchain will allow additional bonuses to be provided to the influencer, encouraging him to do even better work. All of which makes the advertising campaign more effective.
Q: Tell us about your platform and its functionality.
A: With the help of the SocialMedia.Market platform, users will be able to plan and launch advertising campaigns, loyalty programs and referral programs to promote their product, as well as monitor their effectiveness and audience engagement. All processes after the launch will be automated, which will make the platform simple and convenient to use. For example, all information will be collected and analyzed using the Big Data and self-learning data analysis systems. In addition, we plan to implement neural network algorithms, which will allow us to determine the quality of content and eventually completely decentralize the relationship between advertisers and bloggers.
Q: Who are the people using your platform and purchasing your tokens? Can you already describe your client?
A: Of course. First, these are the influencers themselves, who, with the help of our platform, will strive to develop and monetize their web pages. Plus their subscribers, who will be able to use our tokens as voluntary donations, common in the blogosphere. Second, private entrepreneurs and representatives of small and medium-sized businesses or brands interested in promoting their product through influencers on social networks. Third, agencies and major brands, which are faced with the task of maximizing resources and managing advertising campaigns more effectively on social networks. Fourth, users who increase their assets through our Decentralized Dispute Resolution System.
Q: What exactly is this system, and what is its purpose?
A: As its name implies, this system was created to resolve disputes between customers and contractors. When a conflict arises, any of our clients will be able to take it to arbitration.
Q: And who will arbitrate between them?
A: Our token holders will be the judges. They will be able to familiarize themselves in advance with the details of the contract between the customer and the contractor and make a decision accordingly.
– Token holders?! That was unexpected…
– Actually, there is nothing odd about this at all. Ask yourself this question: who, other than we, has the most vested interest in the platform’s proper functioning and successful development?
Q: Whoever is interested in the company and its success?
A: Exactly. This is why token holders will make the most objective and impartial judges. This is also important for making our users feel involved in the project and that they are helping to develop SocialMedia.Market through their participation in the resolution of disputes.
Q: Interesting approach. By the way, what do the owners of your tokens get? What services will be available to them?
A: Our token is called Social Media Token (SMT). It gives full access to all the services, tools and capabilities of our platform. Agencies and large advertisers who buy discounted tokens during the ICO will get more favorable terms for the purchase of advertising campaigns and the platform’s services. Individuals will be able to count on remuneration for participating in the Decentralized Dispute Resolution System as arbitrators. In addition, tokens can be used to pay for additional analytical services, Big Data analytics or for obtaining useful information on interacting and working with influencers.
Q: How do you plan on protecting your users’ private data?
A: All users of our platform have to be verified using blockchain technology, and bloggers will need to confirm that the channel or page on the social network really belongs to them. In addition, all interaction between users will be based upon smart contracts, and payments will be made only using the platform’s tokens. This will bring the risk of fraud down to a minimum.
Q: When will your ICO take place, and how long will it last?
A: The ICO starts on February 9, 2018, and will run until March 16.
Q: How much money do you plan to collect? What will this money be used for?
A: About $20 million. We are going to spend it on platform development, marketing and training campaigns, administrative and operational expenses, bonuses to agents and influencers, and legal expenses.
Q: What are your plans for after the ICO?
A: First, we need to finish the development of the SocialMedia.Market platform and effectively integrate blockchain technology in it. We plan on doing this by end of the summer-early fall of this year. Other equally important tasks are to collect money to promote and advertise our platform and expand the team, adding qualified specialists in product development, blockchain programming, and marketing. In addition, we plan to launch training campaigns for bloggers and advertisers about working with our platform and with influencer marketing, and also to sign partnership agreements with advertising agencies and popular bloggers.
Q: What is the token price during the ICO? How will your platform generate profits after the launch?
A: 2500 SMT to one Ethereum (ETH). By the way, our tokens will be compliant with the ERC20 Token Standard. First, using the 10% service fee for executed contracts. The platform will also provide a number of more in-depth analytics and product promotion services. These too can be purchased for additional tokens.
Q: Has the volatility of the cryptocurrency market affected the economy of the project in any way?
A: Yes, and it was for the better. When we first announced the project, Ethereum was at about $270. Now it is at about $1000 per unit, so, in terms of money, our original hard cap has increased significantly. As a result, we have decided to limit it not by the number of tokens sold, but by the number of ETHs – namely 16,000. We have also increased the number of SMT tokens to be exchanged for Ethereum, so now people who take part in our project will receive more tokens than originally planned. In addition, we recalculated the contributions of those who supported our project during the token presale and credited them with additional tokens.
Q: Can you talk more about the team behind your project? How many people are on the team, and what is their experience in fintech and blockchain? Does the project have any advisors?
A: The team in our Kyiv office now consists of more than 30 people who, for more than a year now, have been actively using cryptocurrency and new blockchain-based solutions and services in their everyday work. And yes, we have four advisors working with us. We are also currently negotiating with several key experts in blockchain and marketing.
To summarize, I would like to ask: how do you envision the future of your project?
A: I hope it doesn’t sound like bravado, but by 2020 we plan to control 2-3% of the world’s influencer marketing industry.