Engage:BDR reaps early success from publisher contribution strategy

Advertising company engage:BDR’s (ASX: EN1) decision to deploy $1.1 million between early February to early March to activate dormant publishers is already paying off, with the company reporting significant incremental revenue contribution as a result of the strategy.

In a market announcement to shareholders, the company updated its activities following a January capital raising aimed at activating publishers to contribute to revenue for its programmatic advertising exchange.

At the end of January, the company successfully raised $700,00 in a placement to existing shareholders. Following this was a draw-down from its existing convertible notes facility of US$720,000.

According to the company, the most recently activated publishers have been partnered and integrated with engage:BDR since 2010, when it was one of the first in the global digital advertising industry to develop its own programmatic technologies.

While the new activation process with publishers took nearly three to four weeks, all publishers are now actively producing revenue.

“Management intends to continue to deploy capital to activate additional dormant and new publishers for the balance of the year,” it said.

Strong returns

Engage:BDR said it expected to be in full volume capacity with all publishers within the next 30-60 days.

In the interim, revenue contribution from these activations is currently about $28,000 per day, underpinning a 30-55% gross profit margin averaging 41%. At full capacity, revenue estimates would be around $42,000 per day.

Furthermore, management is looking to test its new artificial intelligence (AI) technology to reduce its margins and increase gross profits.

According to the company, its own AI technology enables it to be “differentiating and disruptive” in an extremely high growth industry which experiences high human capital costs.

In an investor presentation, the company said that media players remain vital for its success. For every $1 it allocates to publisher prepays, it can generate nearly $2 in revenue in return for access and transacting that ad space.

StartApp integration progressing

In other news, engage:BDR said its engineering team had been working diligently to complete the integration of StartApp.

While original API-based integration went live in the test phase in late December, the company said the pair had instead opted to build a true-programmatically integrated environment to accommodate scale.

“This development cycle has taken significantly longer than expected but is nearly complete and engage:BDR will be one of the first to integrate with this customer through a fully-programmatic integration,” the company said.

Engage:BDR, which recently extended the reach of its growing programmatic ad platform, has pocketed about $200 million in revenue since its inception in 2009.