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SocialMedia.market Rating Review

Stable+

Investment Rating

Expiry date: Expired 16 Jun 2018

We assign the SocialMedia.Market project a “Stable+” rating.

Socialmedia.Market aims to occupy a niche for itself in the marketing influence sector, a very specific segment of the digital marketing market. This market is characterized by high growth rates in recent years, the key factor that could contribute to successful implementation of the project.

We believe that use of blockchain technology will enable the project to buy time and gain an advantage over competitors; its success will then depend on future management decisions. Strong competition among market participants is forcing both large and small players to introduce the latest technology and after a while, the advantages of blockchain will no longer seem so obvious. This applies first of all to large market participants with existing reputations; for small and medium participants consolidation in the future is also possible.

SocialMedia.Market is a platform based on blockchain technology for creating, analyzing and managing advertising campaigns on several social platforms. The project is designed to unite social media, bloggers and advertisers as well as solve the main problems in the marketing influence segment.

Socialmedia.market is creating opportunities for beginner bloggers to develop, as well as for start-ups; it is already working with small and medium-sized businesses internationally, and offers its users the following benefits:

  • Fast and secure transactions.

  • A decentralized dispute settlement system.

  • Authentication.

  • Reducing marketing costs.

  • A remuneration program for participants.

Smart contract platform: Blockchain Ethereum

Contract type: ERC20

Token: SMT

Soft cap: 1600 ETH (5,000,000 SMT)

Hard cap: 16,000 ETH (max 58,000,000 SMT)

Token Sale includes several phases:

1 phase:

Price: 1 ETH = 3000 SMTs (1 SMT = 0.00033 ETH)

Minimal purchase amount: 30SMT/0.01ETH

Max purchase amount: no limits

Accepted payment: ETH, BTC

  • Pre-Sale:

    • Start date: November 20, 12:00 GMT (1:00 pm CET)

    • End date: December 7, 2017 12:00 GMT (1:00 pm CET)

  • Token Sale:

    • Start date: December 7, 2017 12:00 GMT (1:00 pm CET)

    • End date: December 21, 2017 12:00 GMT (1:00 pm CET)

Bonus:

  • Pre-Sale: 25%

  • Token Sale: 10%.

As a result of phase one 1,755,335,845 SMT (1 286.86 ETH) was sold and the soft cap has been achieved. All unsold tokens were added to the 2nd phase.

 

2nd phase:

Price: 1 ETH = 2500 SMT (1 SMT = 0.0004)

Minimal purchase amount: 250 SMT/0.1ETH

Max purchase amount: 300 ETH

Accepted payment BTC, ETH, LTC, XRP, BCH, DASH, DOGE, ETC, NEO, XMR, ZEC.

  • Pre-Sale:

    • Start date: February 2, 2018 12:00 PM GMT (1:00 pm CET)

    • End date: February 9, 2018 12:00 PM GMT (1:00 pm CET)

  • Token Sale:

    • Start date: February 9, 2018 12:00 PM GMT (1:00 pm CET)

    • End date: March 16, 2018 12:00 PM GMT (1:00 pm CET)

Bonus:

  • Pre-Sale: 25% (Min contribution 25 ETH)

  • Public Sale: 10%.

    • Day 1-5 - 15%

    • Day 6-20 - 10%

    • Day 21-35 - 5%.

  • Referral program bonus: give 3%, get 5%

All unsold tokens will be burned after the second phase of the token sale.

The allocation of tokens is as follows:

There is no additional emission.

The funds raised during token sale are planned to be allocated as follows:

  • Research & Development - 37%

  • Marketing & Education Campaigns - 38%

  • Administrative & Operational - 12%

  • Influencers & Agencies Bonuses - 8%

  • Legal - 5%

The SocialMedia.Market platform offers the following features:

  • Brands and advertisers will be able to promote their products using an online audience of influencers.

  • Anyone can become an influencer regardless of experience and number of subscribers.

  • Payment in tokens is effected immediately after the fulfillment of the terms of the smart contract.

  • In the event of a disagreement between an advertiser and influencer regarding the quality of content created, disagreements can be resolved via smart contracts and expert vote.

  • Any token holder with more than 10,000 tokens in their account who has passed the training course, can become an expert in resolving disputes.

  • Experts will be rewarded with SMT Tokens for participation in dispute resolution. A token reserve for experts will be created using platform commissions, determined in the smart contract.

  • The platform commission depends on the type of contract and the complexity of the terms  agreed between parties but it cannot exceed 10% of the value of the contract.

  • Marketing agencies can gain additional earnings - any agent becoming a platform partner can receive SMT by providing additional services towards advertisers’ marketing campaigns or personal management services to influencers.

  • Tokenholders will have access to premium platform services such as:

    • Detailed analytical data.

    • Exclusive insights into the audience exposure of bloggers they wish to cooperate with.

    • Special advertising formats.

    • Content development tools for bloggers.

    • Channel audience growth strategies and campaigns.

    • Exclusive advertising contracts with well-known brands.

    • Marketing consultations.

  • Artificial intelligence and machine learning will enable evaluating and displaying different indicators for each influencer in real time:

    • Numbers of views, comments, likes, etc.

    • Audience coverage and involvement.

    • Indicators of Cost Per Engagement (CPE).

  • Use of artificial intelligence will facilitate studying and analyzing of the campaigns conducted, with the purpose of revealing the most valuable influencers from the advertiser’s point of view.

  • Use of most of the platform’s services both via browser and mobile applications (Android, iOS).

Terms for a transaction are recorded in the smart contract, and payment for content can take place only if all the terms of the smart contract are met.

The functionality of different types of account will differ - opportunities for influencers are centered on searches for advertising campaigns; for brands, it is the search for influencers that meets the necessary criteria.

The process for creating a campaign and a smart contract both for brands and advertisers is clearly illustrated below:

In our opinion the chosen technology is appropriate for the SocialMedia.Market project. A fully developed platform functionality, advanced technologies and smart contracts can help the project gain participants.

4.1 Market analysis

The advertising market is currently booming. In the past five years, the total volume of advertising contracts concluded in various sectors internationally has been steadily growing. Thus, according to forecasts by the GroupM advertising group, the volume of the global advertising budget will increase by 4.3%, to $557.9 bln, in 2018.

It is important to also note that global consumption of digital content is steadily growing and traditional media resources are gradually losing their audiences. Companies are actively increasing their budgets for digital marketing and $209 bln was spent on online advertising worldwide by the end of 2017, which significantly exceeded spend on traditional TV advertising, which amounted to $178 bln for the same period.

According to forecasts by IPG Mediabrands Magna, in 2018, this gap between digital and TV advertising spends will only increase; digital advertising by an average of 13% to $237 bln, while TV advertising expenditure will grow significantly slower - by 2.5%, amounting to $183 bln by the end of 2018. It is clear that with such a change in advertising trends it can be expected that online advertising expenditure will be about 50% of the total advertising market by 2020. This dynamic is reflected in the graph below:

It should be emphasized that the main contributors to the positive dynamics for online advertising were video, mobile and search advertising and performance tools.

The ZenithOptimedia agency estimates the mobile advertising share at just over 50% of all online advertising by the end of 2018, expecting the total volume to reach $114 bln. Video advertising will also become one of the most dynamically developing segments in 2018 (20%) in the opinion of this agency, along with search advertising (17%).

Influence marketing is the fastest growing online advertising segment, and will reach $5-10 bln by 2020 according to experts. However, despite this rapid growth, influence marketing has a number of significant risks related to the lack of transparency for pricing, intermediation and also fraud. Losses on fraud obviously reduce profit and increase marketing budgets.

As the aforementioned problems will remain present for the foreseeable future, this will favor the development of the project in the digital advertising market.

4.2 Competitor analysis

Currently, the undisputed leaders in digital advertising are the giants Google and Facebook, total income for whom exceeds $100 bln. Google's revenue from advertising was $72.7 bln for 2017; Facebook’s revenue was $3.7 bln.

There are more and more projects implementing blockchain technology in this market. The closest analogues for the project in the industry are AdEx, Clearcoin and AdChain, who also strive to make the field of digital marketing and advertising safer and more efficient. However, AdEx is aimed at the entertainment industry and streaming video services, and AdChain focuses mainly on the problem of falsification of traffic amounts and correct calculation of cost for displaying ads to users. The closest competitor is Clearcoin which is a decentralized platform for digital advertising, but not focusing exclusively on influence marketing. The Clearcoin token sale has collected $3.8 mln so far.

HOQU is another player using blockchain in the digital advertising industry. This project is focused on performance marketing.

A few words should also be said about the Sharpay project. This project offers multisharing of information, i.e. placing content on pages on several social media simultaneously for a fee. Currently the project is at pre-sale stage and we think that it will compete well with other marketing platforms.

Thus it is clear that a large number of players are striving to occupy niches in the highly competitive digital advertising sphere. They share common goals: fighting fraud, excluding intermediaries, introducing innovations and the integration of advertising systems. Large players in the market obviously already have their audience, brand and social rating, and their moving to blockchain is only a matter of time.

The key difference of SocialMedia.Market from its rivals is that the company is specifically aimed at the marketing influence segment. This is certainly one of the most dynamically growing advertising markets at the current time. According to experts' estimates, almost all the indicators of companies’ activities related to advertising through opinion leaders (primarily bloggers and journalists) are showing steady growth. In terms of ROI (Return on Investment), influence marketing has proven to be much more effective than online advertising and enables brands to have a stronger impact on customers.

The main task for SocialMedia.Market is the simplification of interaction between its participants and the creation of safe and transparent conditions in influence marketing. This should provide the opportunity for opinion leaders and brands worldwide to reach their chosen target audience.

In this context we think that SocialMedia.Market has the same chances for success as other start-ups.

A team of 36 people is working on the development and implementation of the SocialMedia.Market project, and there are 10 specialist advisors in addition.

Leaders in the team are as follows:

Dmitry Shyshov (LINKEDIN) – CEO and Founder

Involved in the project since 2017. Responsible for overall concept and development.

As a leader Dmitry ensures that the company maintains constant awareness of both the external and internal competitive landscape, opportunities for expansion, customers, markets, new industry developments and standards.

Education:

  • National University of Kyiv-Mohyla Academy, Faculty of Computer Science – 2006 - 2008, Master’s Degree

 

Aleksandra Morozova (LINKEDIN) – Co-founder, Chief Marketing Officer.

Involved project since 2017. Aleksandra provides creative solutions for business and products and has a people-oriented approach.

Education:

  • Moscow Academy for Humanities and Social Studies (former Moscow Humanitarian University), Master’s Degree in Marketing & Design – 2003 – 2010

 

Maksym Churkin (LINKEDIN) – Tech Lead

Involved the project since August 2017. Software architecture, core application services and team management are his main responsibilities.

Education:

  • International Science and Technology University, Master’s Degree in Control computer systems and technologies – 2000 - 2006

 

Viktor Perekhod (LINKEDIN) – Business Development Manager

Involved in the project since May 2017. Victor has more than eight years of experience in developing strategic marketing campaigns for new products and identifying new promising lines of business.

Education:

  • Kiev University of Trade and Economy, Master’s Degree in Accounting  – 2003 - 2008

 

Consultants have also been involved in the development, including the following:

Keith Teare (LINLKEDIN) - Accelerated Digital Ventures, Co-founder TechCrunch, Crypterium.

Andrew Playford (LINKEDIN) - Senior Vice President of Operations at Sonic Foundry, Inc.

Alex Yastremski (LINKEDIN) – Legal Counsel, San Francisco, California

Chafik Abdellaoui (LINKEDIN) – CEO and Founder of XEDYAS IT HYBRID SOLUTIONS

Slavik Nenaydokh (LINKEDIN) – Member of the Board at Centuria, San Francisco Bay Area

Peter Zhalov (LINKEDIN) – CEO at Livestream Ltd, for SocialMedia.Market Mr. Zhalov acts as a Marketing advisor at the first blockchain-based influencer marketing platform.

The team includes specialists predominantly in the fields of marketing, economics, law and information technology. We think that the team is quite capable of solving its objectives.

 

Project token:

SMT is an ERC20 Ethereum blockchain token with a utility function, confirmed by the results of an SEC Howey test.

A smart contract repository is available on Github.

Main functions for the token:

  • Payment for created content.

  • Ownership confers the right to become an expert in resolving disputes (assuming 10,000 SMT are available in the user’s account) and receive remuneration for same.

  • Payment for services for advertisers’ marketing campaigns or personal management services for influencers.

  • Access to premium platform services.

According to the white paper, there may be a later switch to another blockchain platform such as EOS, Tezos, Raiden, Waves or a blockchain protocol developed by the project themselves. In this case, SMT Tokens will be exchanged in a 1-to-1 ratio for tokens from the new platform.

We think that the proposed role of SMT Tokens in the SocialMedia.Market ecosystem is justified, since end users will benefit from transactions based on blockchain in view of their transparency, security and speed.

Since SMT is a utility token, its value will primarily be affected by the project’s popularity. The project concept is relevant as it solves problems for influence marketing, and the platform’s technical component is correctly described in the white paper. The project’s significance is confirmed by positive community feedback on social media, as well as the fact that the soft cap was reached at the pre-ICO stage.

Investors will be interested in SMT Tokens during the token sale due to the bonus program (more in the "Introduction" chapter), as well as the referral program, which offers a referral fee of 5% of all SMT tokens purchased by the referrals via the specific link. The referral member will also receive a bonus of 3% on tokens bought.

The project’s audience will increase as a result of its thoughtful marketing strategy; a significant budget will enable the founders to raise its profile in territories where the platform is intended to be implemented.

SMT tokens have a functional use within the platform; it cannot operate without the token; therefore increasing token demand directly affects the development of the project.

The project has a number of features that should attract users to the platform:

  • Integration into several social media simultaneously.

  • No restrictions on subscriber numbers for beginner bloggers.

  • Instant payments after execution of the smart contract via the integration of the token with payment systems (TenX).

  • An opportunity for agents to receive a portion of the commission for assisting in the selection of influencers and other services.

The value of SMT tokens will increase due to additional opportunities for token holders to earn from active participation in the decentralized dispute settlement system.

The project economy is well presented for ICO participants. The main cash flow will be directed to development and marketing. The initial two years (2018-2019) are not expected to be profitable for the project. Revenues will be generated by commission for transactions on the platform; they will not exceed 10%. A commission will be charged for bloggers. In our opinion, the exemption of advertisers from commissions is an excellent solution that will attract them to the platform. Promoting the platform in larger countries (USA, Russia and the United Kingdom) will enable the project to grow in profitability from 2020.

A beta version of the platform is already operating, and the launch of the finished product is planned for Q3 2018, according to the roadmap. Token demand will increase before launch of the working version of the platform, with a large-scale marketing strategy to attract users and increase awareness of the project.

SMT tokens will be available on crypto exchanges.

A number of risks should be noted:

  • Currently, the ICO market is overloaded with new offers and this could of course affect the results of the token sale.

  • Strong competition in marketing services and the speed of introduction of new technologies, including by established market participants, could also affect the project’s potential success.

We also note that there is a currency risk for this project. The value of the token is tied to cryptocurrencies and there is a general rate risk due to the high volatility of the crypto market.

The project plans to develop in different countries; therefore, we also highlight legal risks that Socialmedia.Market may face in different jurisdictions. The project team understands the seriousness of this issue and has strengthened its staff to reduce this risk, but it is still a significant one.

 

 

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.

We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.