Advertising company engage:BDR (ASX: EN1) has published an business update as it pursues its expansive programmatic integration strategy.
The ad company reported that since the start of 2018 it has more than doubled the number of digital integrations on its programmatic ad platform thereby taking the total to over 175.
The strong run over the past year means the engage:BDR is on course to return to profitability as it forecast at the start of this year.
The ASX-listed company said that integrations significantly impact its revenue-earning potential and serve as a valuable key performance indicator for how much revenue it will end up generating.
In other words, more integrations directly affect the company’s ability to generate revenue for every ad opportunity that a publisher produces.
Despite the “extreme difficulty” in obtaining quality integrations, engage:BDR says that it has continued to execute its market strategy with its management “pleased” at the company’s rate of progress in the past year.
One of the major milestones reached by the ad company has been to shorten integration time from around four-to-12 weeks down to three-to-five weeks.
Quality over quantity
One of the major obstacles to growing its portfolio of partners is that viable programmatic players seek to only integrate with top-tier, highly-credible companies that provide significant value within the programmatic ecosystem.
Integrating rogue partners has cost many programmatic ad companies their businesses as buyers ceased partnerships due to invalid and fraudulent traffic and suppliers moved to protect their app and web users from malware and poor-quality ads, the company said.
As a result, companies tend to carry out definitive due diligence and extensive market research before committing their capital to a deal. Such companies look to share their traffic, buyers, and demand only with strong partners that have provable market traction.
One recent impact upon the programmatic industry as a whole has been the bugbear of fraudulent ads. The AdTech ecosystem has been challenged with inventory source quality, specifically related to ad fraud, as well as, demand quality primarily due to malware.
According to engage:BDR, as a result of such industry-wide challenges, most companies have reduced the number of existing partnerships and significantly limited new relationships.
To avoid the pitfalls being created by dishonest market participants, engage:BDR acquired AdCel and integrated over 40 incremental demand partners onto its platform earlier this month.
AdCel’s technological advantages such as malware scanning has enabled engage:BDR to accommodate the high demand for its unique filtered inventory and premium advertisers that are expected to raise the commercial return from programmatic ads.
The nitty-gritty of integrating new partners uses a specification engage:BDR calls “openRTB” – an improvement on an outdated method of using API, still used by some mobile-only ad companies.
Integrations require both partners to dedicate engineering resources to complete the integration process in parallel on the openRTB spec. This typically involves a dedicated engineer who is usually working on three-to-four integrations concurrently.
The actual process involves using a series of tests for latency, targeting, transacting and discrepancy. Once the testing has been completed, the integration is released from the validation stage and is set live on the production platform at various scales, until eventually at full-scale, or 100% of the volumes available.
This morning’s market update helped boost engage:BDR shares by almost 13% up to $0.035 per share.