El Segundo, CA / ACCESSWIRE / Aug 25, 2014 / There is an emerging social networking site with a proven revenue model. Surprised? Most would be.
There is a doubt concerning revenue streams currently lingering in the world of social media.
For instance, Facebook is currently worth $160 billion and has 1.3 billion users; Twitter users generate 500 million tweets per day; and Pintrest was recently valuated at $3.8 billion and has over 70 million users. Despite billions of engaged users and high valuations, it is generally unclear from where these social media titans generate their revenue.
In a time of mammoth digital IPOs and plenty of speculation surrounding user-driven ad revenue, a new prize-focused start up tech company called Spriza (OTC-QB: SPRZ) has found the formula to generate revenues alongside network growth. And just like all good things, it’s no surprise the answer is simple: contests.
Known as a social network-based contest platform, California-based Spriza engages its users through brands by offering shared prizes and once-in-a-lifetime experiences for potential winners when they connect and share the contest with friends. Who better to share a piece of media than a friend or family members who is directly connected and shares like-minded interests. The more they share the greater the incentives, and if they win, their friends win with them as well: consuming the prize and winning experience together.
It is well known in marketing circles that contests are one of the most effective forms of advertising. However, brands and ad agencies consistently navigate regulatory and legal requirements when running contests since promoting their products using contests or prize-based scenarios is one of the most highly regulated and monitored forms of sweepstakes. The process it takes to run such campaigns and attempt to gain customer demographic information is obstacle-ridden, expensive and resource consuming. These activities include creative, production, distribution, management, fulfillment, post media activities, data analytics and reporting. This is where Spriza comes in.
Let’s say Spriza offers a contest with a major golf brand like Callaway Golf consisting of an Entry-Level Prize of $2500 Custom Clubs and merchandise, and a Grand Prize of a trip for four to see the US Open Golf Tournament. Through creating an account with Spriza, users will automatically have a chance to win the Entry Level Prize for the Callaway Golf contest. Once a submission for Entry Level Prize has been completed, users will be given the second option to enter the Grand Prize. To do this, a user must invite three friends through an existing social network or email who they would like to win the prize with – Spriza has labeled this process “incentivized sharing”. If declared the winner, the user and their three networked friends will attend the US Open together and enjoy the trip of a lifetime. Additionally, many brands add a bonus round that further incentivizes for likes, follows and downloads. This emotional connection to winning with friends and family is a focal point of Spriza’s own brand identity. The element of fun comes into play when individuals enter a contest together, developing a sense of community engagement that can often be lost in other social networking sites.
Users can enter as many contests as they like and are encouraged to enter with different friends depending on the interests of the group. For instance, the same user could also enter a contest to win an Apple computer and, in addition, be entered to win $1000 for themselves and 10 friends in their social media circle. It’s an example of exponential reach: once those networked friends enter with a separate group of connections it is easy to see how the target market can grow and be tapped into. Spriza is able to accrue a vast cache of user information and market desire and relay that knowledge to potential sponsors who want to know their advertising dollars will be utilized effectively. In turn, Spriza can tailor contests based on interest levels of target markets.
Invaluably, Spriza, through sign up has the ability to collect and use demographic information to connect like-minded users unlike ever before. Fact is, users will only enter contests they are interested in winning. This makes targeting and retaining customers easier once their desires and interests become known.
Simply put, Spriza makes it easy for companies to run contests and users to consume and share them. They have patents pending for the unique viral techniques and technologies they use to attract subscriber sign ups, secure email opt-in rights and select winners, proving they are bringing something new to the social network table. The Fortune 500 brands targeted by Spriza have marketing budgets in the billions but are overwhelmed when it comes to utilizing one of the most effective forms of advertising: the bridge that Spriza provides is an obvious solution.
Spriza Director Justin Sather explains, “We equate our techniques to putting nitrous in the tank. Everybody already knows contests are effective, Spriza provides brands the ability to spread their reach to customers quicker and further than ever before. The contest is the spark: Spriza is the inferno.”
The valuations of social networking sites like Facebook ($160B); Twitter ($23B); and LinkedIn ($26B) stems from their ability to attract and retain online users. Spriza believes that the success of their initial campaigns are just the tip of the iceberg when it comes to valuating their company.
As a comparative metric, between December 2012 and March 2013, Facebook had approximately 420,000 users join per day. In beta testing their new process, Spriza sent out 6 messages regarding one contest and in 24 hours had generated 150,000 new users. And that was only one contest. They plan on offering hundreds at once. Plus small businesses can generate and post their own contests, thus making Spriza a site to have user-generated content that can be effectively monetized.
“New social networking websites pop up all the time,” says CEO Rob Danard. “But many struggle with how they are going to make money. That’s where we differ.”
Rather than lead with a cool new idea and figure out the business end later, Spriza have kept their technical advancements running in tandem with strong business fundamentals; while learning from the immeasurable force of pre-existing social networks like Facebook and Twitter.
In the world of constantly changing technology there is a tendency to get swept up in the energy of new ideas and hope the business will be found in that swirl of excitement. Spriza has approached things differently — since when did having a business model become a novel concept.
Source: Market One Media