Directi Business Case Study Presentation '09 Team Gryffindor - ISB Hyderabad


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Directi Business Case Study Presentation '09 Team Gryffindor - ISB Hyderabad

  1. 1. 1<br />Case Study: DirectI Blogging Service<br />By Gryffindors<br />Anirudh Kumar<br />Parag Dhanuka<br />Prayag Panchwadkar<br />
  2. 2. Agenda<br />Context: Industry Analysis<br /><ul><li>SWOT
  3. 3. Competitor Analysis</li></ul>Increasing adoption and awareness of blogging in India<br /><ul><li>Segmented Targeting
  4. 4. Securing “Marquee Bloggers”
  5. 5. New Design Feature Promotion</li></ul>Plan for marketing and business development<br /><ul><li>Promotions
  6. 6. Additional Product Features
  7. 7. Business Development</li></ul>Monetization strategies<br /><ul><li>Ad Revenue
  8. 8. Affiliate Marketing
  9. 9. Free-mium Model
  10. 10. Widgets Marketplace</li></ul>2<br />
  11. 11. SWOT Analysis<br />3<br />
  12. 12. Competitor Analysis<br />4<br />
  13. 13. Network effects<br />5<br />
  14. 14. Agenda<br />Context: Industry Analysis<br /><ul><li>SWOT
  15. 15. Competitor Analysis</li></ul>Increasing adoption and awareness of blogging in India<br /><ul><li>Segmented Targeting
  16. 16. Securing “Marquee Bloggers”
  17. 17. Promotion through Distinct Product Attributes</li></ul>Plan for marketing and business development<br /><ul><li>Promotions
  18. 18. Additional Product Features
  19. 19. Business Development</li></ul>Monetization strategies<br /><ul><li>Ad Revenue
  20. 20. Affiliate Marketing
  21. 21. Free-mium Model
  22. 22. Widgets Marketplace</li></ul>6<br />
  23. 23. The &quot;Community Effect” can drive blogging in India<br />The Social Networking Phenomenon<br /><ul><li> A runaway success in India
  24. 24. No. of users on Orkut & Facebook has grown to more than 16 million.</li></ul>Community <br />Feeling<br />Online Gaming Success<br /><ul><li> Great Success of in mobilizing their network
  25. 25. Participation rates exceeded expectations</li></ul>Education Forums<br /><ul><li> saw unparalleled success
  26. 26. Many new education portals / services launched . Ex. </li></ul>In India, one needs to tap into the “community effect” to make any online venture a success.<br />All of the above examples have become successful by generating positive network effects.<br />Source: JuxtConsult; I-Cube 2008; Team Analysis<br />7<br />
  27. 27. Leveraging the Community Effect – Building Relationships with large offline / online networks<br />Objectives<br /><ul><li>Make blogging popular in India among different user groups, which need to be selected strategically
  28. 28. Achieve the “community effect” among an initial set of bloggers in each user group, which will encourage others with similar interests to blog
  29. 29. Help generate credible and quality content that will attract more readers and more potential bloggers</li></ul>Suggested Plan of Action<br /><ul><li>Leverage the user baseof existing “successful” offline / online communities or networks to encourage blogging
  30. 30. Target communities whose users would ideally take to blogging, such as people trying to lose weight / keep fit, etc.
  31. 31. Attract people to write quality content, by promoting product design features that enable online community building</li></ul>8<br />
  32. 32. Relationships with large networks - Examples<br />Target User <br />Group <br />Potential<br />Possible <br />Themes<br />Possible <br />Tie-up<br />VLCC <br /><ul><li> Only 15% of Indian bloggers are women
  33. 33. A win-win situation for both the company (branding – VLCC groups) as well as for Directi (VLCC User blogs will attract more potential bloggers and build the community)</li></ul>Losing Weight /<br /> Keeping Fit<br />Raising Children <br />/ Motherhood<br />Cooking / Recipes <br />Women<br /><ul><li>MBA coaching institutes with large number of users can be used to reach out to people preparing for the CAT / GMAT. Popularity of forums such as Pagalguy shows that there is a lot of potential for new bloggers from this area
  34. 34. If buy-in can be obtained from a few large school chains, a large number of students can be incentivized to blog, which will further incentivize other schools’ children to create blogger communities</li></ul>School / College <br />Blogging<br />Entrance <br />Examinations <br />Schools / <br />Colleges<br />MBA Coaching Institutes<br />Students / Education<br />Source: JuxtConsult 2008; Team Analysis<br />9<br />
  35. 35. Relationships with large networks - Examples<br />Target User <br />Group <br />Possible <br />Themes<br />Possible <br />Tie-up<br />Potential<br /><ul><li> Indian online travel market is estimated to be worth over USD$2 billion for 2007-08 and is growing rapidly
  36. 36. Firms such as SOTC can give users “blogging coupons” to get started on Directi blogs
  37. 37. Huge potential to rope in potential bloggers and large number of readers </li></ul>Traveling <br />Experiences<br />SOTC Tours <br />Travelers<br /><ul><li>A large proportion of this base of users would be very ready to blog given their reading habits</li></ul>Crosswords Bookstores<br /> Literature Enthusiasts / <br />Avid Readers <br />Book Reviews<br /><ul><li>Great potential to secure users from this untapped source of potential bloggers who would want to share their spiritual thoughts / journey
  38. 38. Great Cross Branding Opportunity for Art of Living</li></ul>Health / <br />Spirituality Enthusiasts<br />Art of Living<br />Spiritual Ideas <br />/ Practices<br />Source:; Web Sources; Team Analysis<br />10<br />
  39. 39. Leveraging the Community Effect - Securing “Marquee Bloggers”<br />11<br />
  40. 40. Securing “Marquee Bloggers” – Examples <br />Securing “Marquee Users” along with helping create suggested sub-communities of bloggers should make sure that we leverage the “Community Effect” opportunity with great success<br />12<br />
  41. 41. Promotable Product Attribute 1 : Accessibility<br />13<br />
  42. 42. Promotable Product Attribute 2: Localization <br />14<br />
  43. 43. Promotable Product Attribute 3:Social Network<br />15<br />
  44. 44. Promotable Product Attribute 4: Avenues of Monetization<br />16<br />
  45. 45. Promotable Product Attribute 5: Power features<br />17<br />
  46. 46. Directi Marketplace – A model for Open Innovation<br />Corporate Marketplace<br /><ul><li> Firms transact with developers to get product / company specific themes / widgets made
  47. 47. Sponsored and sponsor free themes and widgets offered free to bloggers</li></ul>Application Developers <br />Brands / <br />Companies<br />Sponsored & <br />Sponsor Free <br />Themes and Widgets <br />User Marketplace<br /><ul><li> Users transact with developers to get their blogs (premium or free) designed as per their choice
  48. 48. Directi gets a share of the transaction amount</li></ul>Bloggers<br />The Directi marketplace has two parts – (1) The User Marketplace: A transaction platform for bloggers and developers where bloggers can ask for specific blog designs or blog setup help, and (2) The Corporate Marketplace, where firms employ developers to develop sponsored themes and widgets offered free to bloggers<br />Source: Team Analysis<br />
  49. 49. Promotable Product Attribute 6: More than just a blog<br />19<br />
  50. 50. Agenda<br />Context: Industry Analysis<br /><ul><li>SWOT
  51. 51. Competitor Analysis</li></ul>Increasing adoption and awareness of blogging in India<br /><ul><li>Segmented Targeting
  52. 52. Securing “Marquee Bloggers”
  53. 53. New Design Feature Promotion</li></ul>Plan for marketing and business development<br /><ul><li>Promotions
  54. 54. Additional Product Features
  55. 55. Business Development</li></ul>Monetization strategies<br /><ul><li>Ad Revenue
  56. 56. Affiliate Marketing
  57. 57. Free-mium Model
  58. 58. Widgets Marketplace</li></ul>20<br />
  59. 59. Promotions (Viral Marketing)<br />21<br />
  60. 60. 22<br />Business Development through Affiliations<br />
  61. 61. Promotions (Advertisements)<br />23<br />
  62. 62. Revenues from Ads<br />Based on the above calculations any acquisition cost below $6.61 is justified. Hence we should promote our brand with display, SEM and radio advertisement being the priority order<br />24<br />
  63. 63. Agenda<br />Context: Industry Analysis<br /><ul><li>SWOT
  64. 64. Competitor Analysis</li></ul>Increasing adoption and awareness of blogging in India<br /><ul><li>Segmented Targeting
  65. 65. Securing “Marquee Bloggers”
  66. 66. New Design Feature Promotion</li></ul>Plan for marketing and business development<br /><ul><li>Promotions
  67. 67. Additional Product Features
  68. 68. Business Development</li></ul>Monetization strategies<br /><ul><li>Ad Revenue
  69. 69. Affiliate Marketing
  70. 70. Free-mium Model
  71. 71. Widgets Marketplace</li></ul>25<br />
  72. 72. How will Directi Earn revenues ?<br />26<br />
  73. 73. Monetization (Advertisement)<br />
  74. 74. Monetization (Freemium Model)<br />Based on the above numbers 1000 additional active bloggers should bring us an extra $416 / Year<br />28<br />
  75. 75. Internal Affiliate System (IAS)– A way to generate quality content and increase blogger base<br />Tying up with <br />companies<br />Getting Bloggers <br />on Board <br />Bloggers promote <br />participants<br />Bloggers get <br />Paid per click <br /><ul><li>Bloggers need to sign up with the affiliate system to start promoting the companies and earn money
  76. 76. There is an incentive to generate better written content as more money can be made than with Skenzo or Adsense
  77. 77. Bloggers get paid a higher percentage per click than with traditional Adsense ads
  78. 78. Bloggers blog about a particular product / service
  79. 79. They leverage their readership to get more user clicks
  80. 80. Directi ties up with various companies & creates a network of affiliates who want to advertise more effectively
  81. 81. This system allows better ROI on the advertisers’ money</li></ul>The Internal Affiliate System (IAS) can be an extremely useful model for Directi as not only does it generate revenue (commissions from advertisers), it also ensures that good content and hence more readership is generated for the platform<br />29<br />
  82. 82. Optimistic Estimates with a simple freemium model and an integration with AdSense result in an NPV Of $46.35M<br />$ Million<br />NPV = $46.35 Mn<br />CAGR<br />74.80%<br />CAGR<br />120.40%<br />
  83. 83. Pessimistic Estimates with basic monetization platform suggest an NPV of $3.99M - Project seems viable even in worst case scenario<br />$ Million<br />NPV = $3.99 Mn<br />CAGR<br />49.60%<br />CAGR<br />104.60%<br />
  84. 84. Conclusion<br />There exist significant gaps in the feature sets needed for Indian bloggers & what exist in today&apos;s platforms which can be plugged with a targeted feature set.<br />Community effects need to be leveraged in order to achieve substantial network effects & propagate the acceptance & spread of blogging in India.<br />Financial projections suggest that using the monetization tools elaborated, Directi should expect to derive significant value from this project.<br />32<br />
  85. 85. Thank You<br />33<br />