After recently reporting its strongest first half since listing, Engage:BDR (ASX: EN1) revealed in an update today its programmatic integrations were “considerably” ahead of schedule, while its new advertising inventory quality initiatives are currently generating $5,000 in incremental daily revenue.
The company has developed proprietary artificial intelligence and machine learning technologies which automate and maximise the transaction of digital video, native and display advertising and influencer marketing.
This is used by advertisers, their agencies and the app publishers that display the adverts.
To put the company’s technology in context, it describes its primary business as a “stock exchange for digital ad space” – connecting thousands of publishers to buyers, with all transactions automated “almost exactly like online stock trading platforms”.
The company’s revenue is generated through its proprietary AI software, and its fully automated sales channels.
As well as this, Engage:BDR’s AdCel business fits with the programmatic ad exchange as an integrated supplier, while the IconicReach division aspires to be the Google AdWords for influencer marketing.
Engage:BDR’s strategic goal for 1H 2020 was to continue scaling revenue and profitability, with programmatic integrations the fundamental drivers of the company’s revenue.
“The more programmatic integrations the company has integrated, the higher the supply and demand sell-through,” Engage:BDR explained.
The company also has the advantage of a fixed cost structure, unlike many of its competitors, which have variable cost models.
As a result, gross monthly profit above $600,000 would result in a cash-basis profit to the company.
During 1H 2020, Engage:BDR onboarded 230 integrations. Additionally, in July, several further integrations were signed, with the company expecting to update shareholders on these shortly.
New 1H 2020 initiatives boost revenue
Meanwhile, the 1H 2020 heralded a new strategic advisory board for Engage:BDR.
The board is made up of key industry players, which Engage:BDR claims have “significant influence” across app publisher development, programmatic demand and inventory quality.
“Assembling this group has enabled countless new partnerships previously unattainable,” the company added.
The addition of an interim head of publisher development in the March quarter has facilitated access to new publishers and accelerated the NetZero program.
Engage:BDR claims this hire has also ramped revenue much quicker – “enabling 44% 1H revenue growth in 2020”.
To boost revenue further, Engage:BDR also issued individual revenue targets, tactical and incentive plans for all employees.
The company noted on average each person generated about $1.15 million in revenue in 2019 and this target is expected to be “considerably higher” for 2020.
2H 2020 targets
Looking ahead in 2H 2020, Engage:BDR claims the market can expect new integrations to enter the company’s platform each quarter, with resulting updates on how these impact revenue.
Engage:BDR’s programmatic integration target for the entire 2020 calendar year was to exceed 238 integrations, with this target almost achieved in the first half alone.
The company estimates the combined international and US programmatic advertising markets are currently worth about US$108 billion (A$154 billion), with the US contributing about US$70 billion (A$99.95 billion).
This global market is anticipated to grow to US$147 billion (A$210 billion) in 2021.