Game with machines: how StickerRide earns from advertising on vehicles

The founders were StickerRide Mikhail Marchenko and Gleb Timofeev (left)

Gasoline

The car owner Kirill Sukhanov from St. Petersburg adorned his Mazda vinography in the Japanese style. When Sukhanov bought a new Citroen, he began to choose the design for the machine and found that it can still make money. Sukhanov car plastered with advertising stickers of the Bank and began to earn about 3 thousand rubles. per month, “not Bad during the crisis to recapture at least part of the cost of gasoline.”

To earn advertising offers motorists services StickerRide. It was founded in 2012 by former managing partner of the investment Fund Prostor Capital Michail Marchenko, marketer Gleb Timofeev and former CEO of advertising Agency “Boulevard ring” Rasul Akhmedov. The idea was not original a few startups (“Advertisement auto”, “Reclamamos” and many others) have tried to create a community of motorists, and then carry out advertising campaigns, using their machines. But they all faced the problem of supervising drivers and estimate coverage of the campaign. The founders StickerRide decided to track movements using a mobile app and charge the advertisers pay for the actual mileage of the cars and drivers to pay money depending on the brand of car, areas and distances, which they are passing. “We no longer sell to the advertiser the black box,” says Marchenko.

In November 2013 Marchenko, Akhmedov and their minority partners Gleb Timofeev Egor Matveev registered Stikerrayd, OOO, and programmers owned by the Studio where “Hyperboloid” started to develop mobile applications. “Initial investments have kept half a million dollars”, said Marchenko.

App StickerRide partners launched in June 2014, along with the first advertising campaign of the movie “transformers”. The action was attended by only 50 cars. Now, according to the company, the app was downloaded about 40 thousand users, of which more than 30 thousand have registered their cars. Usually participants will learn about StickerRide on automotive websites and in social networks, says CEO Gleb Timofeev StickerRide.

Two years StickerRide spent more than 20 advertising campaigns, customers were MTS, P&G, Moscow credit Bank and others. This year StickerRide launched a campaign of Binbank in St. Petersburg, where he now goes about 120 cars with stickers, and brought the total number of cars with stickers on the streets of the two capitals to 500.

<p>the startup’s Founders StickerRide Mikhail Marchenko (left) and&nbsp;Gleb Timofeev</p>
Photo: Vladislav Shatilo/RBC

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The founders were StickerRide Mikhail Marchenko (left) and Gleb Timofeev

StickerRide in numbers

2312 vehicles participated in the campaigns StickerRide, nesdev 3 million km

750 cars participated in the largest advertising campaign StickerRide

$500 thousand the initial investment in the company

More than $3 million the total amount of attracted third-party investment

From RUB 1 million starts, the cost of an advertising campaign through StickerRide

From 3 thousand to 10 thousand roubles a month usually earns a motorist during an advertising campaign

32 billion rubles the volume of outdoor advertising market in Russia in 2015 (21% less than in 2014)

Source: company data, ACAR

The struggle for points

“We don’t want to make boring commercials just take a picture of the Billboard and stick on the side of the machine. We adapt the media so that it was bright and dynamic,” says Gleb Timofeev. Before the campaign, the advertiser stipulates StickerRide with the number of vehicles and the duration of the promotion. Then in the app announce the launch of a new campaign and start recording on pasting. Depending on the number of cars the company uses multiple car washes and pays for their services for example, the first “partnership” point StickerRide still working on the underground Parking near the Manege square. “The process of gluing takes about 30 minutes, before this free wash the car”, says RBC Muscovite Ilya Dubrovin, which is involved in the campaigns StickerRide more than a year.

All project participants divided into several categories depending on the class of vehicle: from premium, BMW X5 as such, according StickerRide, about 15-20%) to budget cars (most of them). To participate in the campaigns StickerRide are not allowed cars older than 2005 release and the domestic auto industry cheap cars are not in demand by advertisers. The earnings of a driver depends on mileage, day of week, time of day and region all monitors the application. “If you drive during rush hour inside the Garden ring in the Range Rover, you will have one billing, and if the Daewoo Matiz at night on the ring road, it is quite different. At the intersection of Third ring rates are much lower,” said Timofeev. If the car is worth not paying at all. The calculations are in points this is the main “currency” StickerRide. For 1 km you can earn 0,33,5 points, which are 3-10 RUB the more often a user participates in campaigns, the higher the exchange rate, according to which he can withdraw the money earned from the app to e-wallet (QIWI or Paypal). “On the one hand, it motivates people more with us to participate in different promotions, and on the other not immediately withdraw money, but to save and earn”, says Mikhail Marchenko.

According to Marchenko, on average user earns 3 thousand rubles. per month, but some can “impact” on 30 thousand rbl. According to Ilya Dubrovin, his salary is about 8 thousand rubles; driving during this time about 2.5 thousand km mainly outside the Third ring. “Impresses me the idea that if you use auto all spend money, you earn,” says Dubrovin.

It’s not just about money. The company actively uses elements of gamification: makes quests or hunting with a camera, in which people perform different tasks and earn additional points. For example, during an advertising campaign of the movie “transformers” group pasted stickers of cars went around the cinema “October” before the premiere. “The majority of our users are social networks, and we come up with them to such events that they branded the car photographed and posted to the network, it allows you to expand their reach through the Internet,” says Gleb Timofeev.

For the advertiser the cost of the campaign starts from 1 million rubles, or from 10 to 20 thousand rubles. per car per month, says Marchenko. In the beginning of the campaign, the advertiser pays a certain amount of points, which are credited to the account of the owners riding around the city with stickers. “Pay volume points it’s like a certain amount of banners to purchase. And then our cars start to roll out this volume, and advertiser may, through your personal Cabinet to see how it is spent, as allocated between each car, how many were passed in what area, at what time, etc.” says Gleb Timofeev.

According to Timofeeva, on average, one branded car has 20-25 thousand contacts with the audience on the day. Standard Billboard size 3×6 m, hanging in the center of the city, gathers around 60 thousand contacts, but it will cost the advertiser to 80-90 thousand rubles. per month, says the General Director of Agency “ESPAR-the Analyst” Andrey Berezkin. With this money you can paste stickers 6-7 cars StickerRide and the amount to 3.54 times more contacts, says marketing Director StickerRide Olga Batalina. “In addition, the Billboard will see the same people who every day go to work past it, and cars are constantly on the move, so you cover different areas and different people,” she says. When calculating the cost of display advertising is the use of technology StickerRide “in certain conditions performs better than standard “outdoor advertising”, says the marketing Manager of the Bank Michael Semikov.

The founders StickerRide did not disclose gross margins of your business, but, according to calculations by the RBC-based payments to drivers and the cost of campaigns for advertisers, it can be of the order of 50-60%. About 50% of this figure and evaluates competitor StickerRide, founder of the service AdvTruck (places advertising on trucks) Denis Winds.

A startup in a difficult market

According to AKAR, in 2015 the Russian market of outdoor advertising fell by 21% and amounted to 32 billion rubles In StickerRide aim for 2015 of $1 million in revenue, but only received about 30 million rubles But in 2016 StickerRide expected to grow by almost four times and hold approximately 1% of the 12 billion of the Moscow market of outdoor advertising, hopes Marchenko. “Our product is not just advertising, it is also a community of brand ambassadors for any company that wants to promote itself in the city,” he says. When a person gets ads on his own car, and he confirms that shares the values of the brand, says Marchenko. “For example, MTS in the last action for 200 cars promoted the slogan “I know I can”, and we proposed to the rear glass to make mirrors, in which participants were able to continue it. Someone wrote “I know that I can be clear hipster”, someone- “you Can sing in traffic”. This helped to greatly diversify the campaign” says Gleb Timofeev.

In may 2016 StickerRide attracted $3 million investment from venture Fund Winter Capital Advisors. As told RBC Executive Director of the Foundation Mikhail Tsiferov, money is needed to enter foreign markets, the priority is USA, because it is the biggest, and also the United Kingdom and continental Europe. “Russia’s business is already working the model is the payback, and we expect profits at the end of 2016,” said Cyferov. The Fund’s share in the company he does not name, but, according to Marchenko, the Winter Capital Advisors became the third largest shareholder StickerRide after him and Rasul Akhmedov. According to SPARK, from March Stikerrayd, OOO controls the British company “Stikerrayd limited. Spring StickerRide opened offices in the UK and USA, they are now recruiting a crew.

SIDE VIEW

Investors

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Michael Tsyferov, Executive Director of the company Winter Capital Advisors

“An interesting innovation that will be able to make his way in a Mature market”

“The idea of placing advertising on private cars seemed very interesting innovation that will be able to fight their way to the already existing Mature market. And another important thing me and all my colleagues who took the decision, I really liked the team managers of the business. Very focused and goal-oriented guys who understand what they want. The idea that they came up with is great, and its implementation is at a very high level. They have a good chance.”

“Scalable idea”

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Igor ryabenky managing partner of Altair.VC, business angel

“A normal idea. And scalable. Can’t answer that, would I invest in this project: I so solutions do not accept, at first look the command, then the parameters. The main risk here go to market, or a strategy to market it all depends on how the company will work with customers and build business processes”.

Competitors

“Drivers are often irresponsible”

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Stanislav Kaufman, the marketer, the Creator of the brand “Putinka”, the investor of the project “Advertising car” that existed in 2010-2013 and closed due to restrictions on alcohol advertising

“One of the key issues of this business mentality of our drivers, frequently they are advertising irresponsible: for example, the man changed his mind and took off advertising sticker, and notify the advertiser forgot. And Yes, the private car fleet is very heterogeneous, which also complicates the uniform standard advertising campaign.

Monitoring via GPS not a panacea. I once did advertising “gazelles”, which were to ply the city center. And here I go and see that our cars are at the intersection of the Garden ring and Yauza embankment. It turned out, the drivers have conspired, all of the sensors put in two cars, and the others were resting by the river, but the system showed that the car in the way.”

“The advertisers we see a weak interest”

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Denis Vetrov, founder of the service AdvTruck (advertising on trucks)

For the big players-buyers advertising geo-targeting is important: they want to purchase ads that will appear. Untargeted advertising on the cars uncontrollable, it is impossible to calculate the rates of coverage. So niche that felt StickerRide, quite interesting. However, the advertisers for example, we see a rather weak interest. The main reason people are strange. There are traditional billboards or public transport, what is the point even in private cars? Thus in terms of capacity to accommodate this market is endless. When it comes to us, the advertiser and asks us to run a campaign, we conduct the roll call of owners, the failure rate is only 10-15%. People have a positive attitude to stick advertising for money.

Customers

“We reduced the number of outdoor advertising in Moscow, replacing it StickerRide”

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Michael Semikov, Director of marketing Department of the Bank

“The company StickerRide invited us to cooperate in the spring of 2015. We made the first test project, and here for the second year the Bank holds a campaign with StickerRide. Important for us to pay for finding vehicles in a certain area, to attract customers around our offices. This technology allows to optimize costs in comparison with classical location in transport and to increase the coverage compared to stationary designs. A tracking system helps to adjust the route plan of campaign, and to increase the density of contact with the brand in the selected area. Of course, this is not the main channel, with its help, we add media-mix consisting of TV, Internet, outdoor advertising and radio. But we have reduced the number of outdoor advertising in Moscow, replacing it StickerRide. The influx of new customers indirectly speaks about the positive experience of using this channel.

“The story is rather niche, although interest in the project is”

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Michael Yeliseykin head of media planning, advertising and sponsorship of MTS

“StickerRide come to us in 2015. We at that time was in the active phase of the Wowmoscow project involving young active citizen in communication with the MTS brand. Format StickerRide, in our view, helped to solve the problem. The format, though small, but quite visible it is visible and walkable, and the man standing at the bus stop, and the driver, and just people in the yard where can be parked. We were a fairly small format, but it was important that he was a bright, potentially visible to millions of citizens. I must admit that the medium proved to be good according to our measurements we know that he was noticeable and the Muscovites drew attention to our presence on the cars StickerRide.

The potential for growth in StickerRide is what it is and the market interest in this kind of promotion. However, this story a niche that solves a specific task. Because from the point of view of the price of the contact carrier is not the cheapest, replacement or threat of “outdoor advertizing” he definitely will not, although your advertiser the format will be.