Digital marketing and eCommerce company Crowd Media (ASX: CM8) has reported a significant financial turnaround with the company expected to report positive underlying EBITDA for FY20 which represented a $2.7m turnaround for the microcap.
The turnaround from a $2.6m loss in underlying EBITDA in FY19 comes in line with the appointment of industry leader Steven Schapera to the board of Crowd Media in September 2019, following a major investment in the Company which has seen Crowd Media undergo a business transformation.
With a new focus to utilise their network of more than 1,000 social influencers, Crowd Media’s new direct-to-consumer business has delivered $350k, mostly in the past six months, by using their social commerce network to sell selective products direct to millennials.
Rather than manufacturing products themselves, Schapera has been instrumental in partnering with brands I am Kamu, London Labs, KINN Living, and the Vital Group to source existing products with limited market reach that deliver brand penetration, sales and most importantly – margins.
“All are currently being piloted; it is an iterative process as we test, tweak, and test again in order to home in on the “secret sauce” required to sell each category or product before we scale up sales and marketing initiatives,” said Crowd Media Chairman, Steven Schapera.
Under the new Crowd Media business model, the Company has been well positioned through COVID-19 where isolation lockdowns have led to a significant rise in online consumer purchases, especially within millennials who form the core of Crowd Media’s target market.
While Schapera is pleased to reach his Year-1 milestone of turning Crowd Media around to be operationally breakeven, the Company has a clear vision towards conversational social commerce which Schapera views as the next generation of influencer marketing, and one that Crowd Media is uniquely equipped to revolutionise within 3 years.
“Our vision stemmed from our belief that Influencer Marketing in the next few years will be experiential, more closely resembling Facetime with a famous person versus looking at a post on Instagram (which is how it is now).
“To create conversational commerce interaction between, say, a Formula 1 racing fan and an influencer like Lewis Hamilton is the billion-dollar breakthrough in influencer marketing.”
Over the next 12 months Crowd Media intends to increase the marketing initiatives of their Direct-to-Consumer business, continue sourcing exemplary products, and expand their social commerce offerings into services through partnerships with insuretech and fintech brands.
Schapera is best known as the founder of BECCA Cosmetics which he exited in 2016 through a sale to Estee Lauder for $300m, before identifying Crowd Media as the platform for his unique social commerce vision.
*Owners of this website are CM8 shareholders