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These OTC-traded companies are ready to disrupt the big-cap social media space

A flurry of social media scandals left some users looking for alternative ways to share. Two companies fill the need.
These OTC-traded companies are ready to disrupt the big-cap social media space
OTC-traded companies may be able to take advantage of weak spots in the social media space

Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) have long dominated social media, amassing millions of users who visit the sites and mobile apps daily. But a series of recent missteps have given new players an incredible opportunity to break into this seemingly airtight space.

Take the highly publicized Cambridge Analytica scandal, which left many Facebook users feeling as though the social network put advertising revenue above data security.

Or Snapchat’s (NYSE:SNAP) redesign late last year that mixed more ads into user feeds as a way to further monetize the service, in the process knocking posts out of chronological order. The redesign was so disliked that 1.2 million people signed a Change.org petition to bring back the original layout, forcing management to roll back the changes.

But it left users feeling that their needs were not of paramount importance compared to ad revenue.

Then Twitter, which has struggled mightily with profitability despite its ubiquitous presence in everyday life, revealed that it had inadvertently compromised the passwords of millions of users.

These platforms -- trusted by millions to showcase their free self-expression -- were now being seen by many as profiteers mining or mishandling sensitive personal information that was freely shared.

This shift in perception has bred distrust and left users looking for alternatives, creating an opening for disrupters. The smaller cap arena is home to several promising companies in this space.

While investors continue to analyze and predict what the future holds for the big-cap names, smaller cap companies have channeled the entrepreneurial spirit to create non-traditional platforms that challenge the status quo.

The smaller cap space can be difficult to navigate, but here are two OTC-traded companies that are poised to break out and achieve more visible success.

Getting Vocal

One player looking to shift the focus back to content creators is Jerrick Media Holdings Inc (OTCQB:JMDA), creator of Vocal, a long-form social publishing platform designed to meet the needs of various types of content creators.

Launched in 2016, Vocal prioritizes the relationship between the platform and the content creators.

WATCH: Jerrick Media Holdings CEO says content is king, distribution is key

"Our product is focused on the creator and the creative process.  We help creators monetize their content,we  don't look at them as our product, we look at them as our partners," CEO Jeremy Frommer told Proactive Investors in an interview.

Creating Vocal as a proprietary platform and web application was essential to its growth, according to its founder. While users can post content on an off-the-shelf website, the format can be limiting. Many websites are utilitarian in nature, but a robust platform is more agile allowing for the ability to grow and scale.

"We realized early on that the only way to build a highly scalable digital media business was to solve problems we identified for both content creators and brands,” said Frommer.

Upon surveying the space, the company saw how critical it was to invest in a proprietary platform if it wanted to attract both creators and brands.

The long-form publishing site is free to join for users over the age of 13 with a valid email address or social media account.

Unlike other social media platforms where internet trolls run wild, content submitted to Vocal goes through a moderation process before being published. Creators submit a draft that is reviewed within 24 hours before it is potentially posted on one of Vocal’s growing network of communities. If a post isn’t approved, users will receive an email explaining the changes required before publishing.

READ: Jerrick Media Holdings’s fiscal year report forecasts monthly visitors to nearly triple by 2019

Frommer divides the digital space into two categories: content creators and content consumers.

“If you can figure out how to connect them, and  how to deliver each of them exactly what they need, we can help them solve for two fundamental problems: how to get their voice heard in the digital space and how to make money doing it,” said Frommer.

Vocal creators have access to an internal dashboard that shows the total number of views and how much money the content has generated. The algorithm focuses on reader engagement, measuring how many readers engage with the story rather than just clicking on it.

The New Jersey-based company recently received a US$1.2m in private placement and has plans to uplist the stock to Nasdaq from the OTC in mid-2019. There are currently nearly  300,000 creators on the site. This number is expected to triple over the next 12 months

Changing how data is collected

Three-fourths of Facebook users visit Facebook every day, according to a social media usage study conducted by the Pew Research Center. That level of high-frequency usage gives advertisers a ton of data to work with -- but not necessarily the tools to comb through all of it or to make the ads relevant to users.

Accelerize Inc (OTCQB:ACLZ) is a marketing tech company looking to change the way data is collected in the first place, making the ad experience more relevant to users. The company’s platform is called CAKE, a software as a service product (SaaS) that collects and analyzes customer data for advertisers.

“Digital marketers are dealing with overwhelming amounts of data and they need tools that can help them transform this data into decision-supporting insights, fast,” said COO Santi Pierini in a recent press release.

Based in Newport Beach, California, the company allows advertisers to optimize their return on digital marketing investments. Several big-name companies already utilize the service, including Thomson Reuters, Lyft, Barclays and Legalzoom.

Using a proprietary cloud-based system, Accelerize provides the advertisers with end-to-end customer data across multiple channels, including search and mobile, and allows them to analyze the effectiveness of digital ads. Accelerize’s software gives a sense of a predictable revenue stream based on setup fees, monthly service fees and per-transaction fees.

A socially driven future

Big-cap platforms like Facebook and Twitter are mainstays in modern America life that continue to grow. Seven out of 10 American adults use a social media platform, according to the Pew Research Center, and the number has increased steadily since the Center’s studies began in 2005.

Although the social media giants grow larger by the day, they’re not immune to blind spots. No longer dorm-room startups with close ties to the communities they serve, the platforms can misread the room and fail to meet the needs of its users.

When the big-name platforms drop the ball, these OTC-traded companies in the smaller cap space will be there to pick it up and run.

--Updated and revised for content and clarity--

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