Los Angeles-based digital advertising company engage:BDR (ASX: EN1) commences trading on the Australian Securities Exchange today.
engage:BDR is run by co-founder Ted Dhanik, who served as Head of Strategic Marketing at Myspace from its inception in the early 2000s until 2008.
At its peak in 2006, Myspace was the world’s most visited website, overtaking Google Search and capturing almost 5% of all US web traffic.
Dhanik is joined on the Board of engage:BDR by Tom Anderson who was the person that automatically became everyone’s first friend on Myspace. Anderson founded Myspace and it is estimated that his profile pic (you know the one), is one of the most seen images of all-time, even eclipsing the Mona Lisa.
“The concept for engage:BDR first came to me in 2008 when Myspace was having trouble monetising its ad inventory,” Dhanik told Small Caps. “I saw that as a huge opportunity and started helping publishers monetise their inventory more effectively.”
Dhanik teamed up with other leading executives in the digital media space and launched engage:BDR in 2009.
engage:BDR’s core business is its proprietary technology that manages internet video and display advertising for advertisers, advertising agencies and the website which display those advertisements.
Although the buying and selling of ads was originally performed by salespeople, engage:BDR has transitioned to “programmatic advertising”, which automates the process of online advertising inventory.
“Eliminating the need for salespeople reduced our cost of sales by 51% in the 2016 financial year,” Dhanik says. “Our programmatic platform utilises sophisticated technology to make the process faster, more cost efficiently and highly scalable. We’re now doing 30-40 billion dynamic ad auctions a day.”
Since inception, engage:BDR has grown substantially, achieving revenue of AUD$1.3 million in 2009 and AUD$20.5 million in 2016 representing a compound annual growth rate of 48%.
engage:BDR has long-standing relationships with major clients such as McDonalds, Hyundai, Best Buy and American Apparel and has been ranked as high as first in comScore’s US Display Ad ratings and ninth in US Video Ad Panel ratings.
“We’re in a market that’s already huge and growing rapidly,” says Dhanik. “The global digital ad market was worth around $230 billion this year and is expected to hit $330 billion in 2020.”
Myspace was also credited with introducing the world to the concept of “tastemakers” – people with significant social reach who we now call “digital influencers.”
engage:BDR has recognised the opportunity presented by the digital influencer market and recently launched IconicReach, the world’s first self-serve Instagram marketing platform.
“We see massive potential in the digital influencers industry which is really still in its infancy,” says Dhanik. “We are automating and streamlining something that has been traditionally run off marketers’ spreadsheets. We are making the process of brands connecting with influencers as smooth and frictionless as possible.”
The influencer industry is now worth over USD$1 billion and in 2016, $570 million was spent on influencers marketing on Instagram alone according to eMarketer.
engage:BDR listed following a heavily oversubscribed offer which raised the maximum of AUD$10 million. The company has a market capitalisation of $50 million based on the AUD$0.20 share price.
“Listing on the ASX gives us the opportunity to aggressively pursue our global growth strategy,” says Dhanik. “We are already in advanced talks for acquisitions in Australia, Asia and the US and we will also use the proceeds of the IPO to further develop our technology and businesses.”