Adveritas continues sales momentum as industry recognition rises

As industry recognitions grows for ad fraud mitigation software company Adveritas (ASX: AV1), its strong sales momentum continued during the September quarter – driven by a huge leap in subscribers and customers.

For the three months ending September, Adveritas achieved an 80% rise in subscribers for its TrafficGuard Freemium product, increasing from 580 in the June quarter to 1,050.

Also, during the same period, customer numbers climbed 25% resulting in Adveritas having more than 50 revenue generating clients by quarter’s end.

Adveritas attributed the higher customer numbers to a strong conversion rate of Freemium to fee paying Land and Expand customers.

Meanwhile, compared to the September 2019 quarter, Adveritas’ cash receipts soared 85% to $241,000, while costs were carved 19% to $1.9 million.

Adveritas’ fraud prevention products

Adveritas’ flagship and first SaaS creation was TrafficGuard.

Delivered through its subsidiary TrafficGuard, the SaaS solution detects, mitigates and reports ad fraud before it impacts digital advertising budgets.

It is offered to consumers via three pricing models: Freemium, Land and Expand, and Long-dated Contracts.

Among the initial adopters of TrafficGuard were multi-billion dollar businesses LATAM super-app Rappi and APAC super-app GO-JEK.

Adveritas’ other main offering is the pipeline is nxus, which is a proprietary ad mediation platform. It is effectively designed to identify profitable advertising channels.

Adveritas predicts the global display ad spending will reach US$236 billion by 2020, with ad fraud also on the rise. It is believed ad fraud drained around $42 billion from ad spend last year.

Contract wins and strategic partnerships

Underpinning Adveritas’ recent positive quarter were enterprise level contracts and new strategic partnerships with major global entities.

Adveritas inked a contract worth $100,000 with the Australian subsidiary of LSE listed GVC Holdings which has a market cap of about £6 billion.

“High profile contract wins in a particular industry sectors, such as GVC in the gaming sector, create multiple expansion opportunities,” Adveritas stated.

As such, discussions are underway regarding rolling-out Adveritas’ TrafficGuard product across the wider GVC group.

Additionally, several other large betting agencies are trialling TrafficGuard and Adveritas anticipates many of these will be converted to contracts.

On the partnership front, Adveritas is advancing a number of strategic ventures to drive sales.

Interpublic Group subsidiary MCN Media brands signed a 12-month contract for TrafficGuard.

Adveritas said the contract was already generating sales momentum through the onboarding of an initial tranche of clients while TrafficGuard sales staff works with MCN to onboard more customers.

A potential partnership with Google is in the pipeline, with Adveritas and Google looking at combined go-to-market strategy of TrafficGuard’s pay per click product.

It is anticipated customers will be able to consumer TrafficGuard’s solutions with “minimal effort” through the Google Cloud Marketplace.

“The partnership will enable TrafficGuard to quickly expand engagement and service to Google customers and will be announced when finalised,” Adveritas stated.

Industry recognition promotes TrafficGuard

Shoring up global knowledge of Adveritas’ TrafficGuard was an award for Best PPC Optimisation Platform at the MarTech Breakthrough Awards ceremony in September.

Other winners included Shopify, the Trade Desk and Adobe.

The following month, The Australian Financial Review placed TrafficGuard eighth on its Technology list of Australia’s Most Innovative Companies.

More than 600 companies had been nominated across Australia and New Zealand.

TrafficGuard has also been shortlisted for the 2020 Most Effective Anti-Fraud Solution accolade at the upcoming Effective Mobile Marketing Awards. It was also shortlisted for Best SaaS Platform and Best Technology in the 2020 International Performance Marketing Awards.

Strong balance sheet to pursue growth

By the end of the September 2020 quarter, Adveritas had $6.36 million cash at hand and no debt.

It received a further $2 million in October from non-executive director Mark McConnell and is anticipating $1 million in research and development grant funds early next year.

The healthy bank balance is despite COVID-19 challenges. Adveritas did note its revenue had been impacted with some customers suspending services. The company has also temporarily reduced licence fees to provide short-term relief to some customers.

However, Adveritas pointed out it had received about $353,000 in government funding in the form of pay-roll tax rebates, cash flow booster payments and JobKeeper.

To continue its growth trajectory, Adveritas’ strategy is to diversify revenues further – targeting a larger number of clients.

These will be facilitated via cross-selling and upselling of the TrafficGuard solutions.