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Engage:BDR debuts on the ASX, clinches new contracts

Published 21-DEC-2017 11:34 A.M.


4 minute read

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Following its recent listing on the ASX, Los Angeles-based digital advertising and media technology company, Engage:BDR Limited (ASX:EN1), has updated the market revealing a number of new critical integration partnerships in its core programmatic advertising business.

EN1 was co-founded by former MySpace marketing and strategy head, Ted Dhanik, who is also its CEO. Dhanik brought in MySpace co-founder, Tom Anderson, cementing EN1’s strong roots and clout in the digital marketing and social media landscape.

The ad-tech company made its ASX debut on December 14 after closing its heavily oversubscribed IPO, raising the maximum amount of A$10 million.

On listing, EN1 had 249,999,993 shares and 30,000,000 tradeable options on issue, with a market capitalisation of A$50 million (at 20 cents per share).

A number of small cap institutions, professional investors, high net worth investors, and over 1000 retail investors have joined the company’s share register.

A business in digital engagement

EN1’s business centres around its proprietary technology, which purchases internet video and display advertising inventory from website publishers and then on-sells that technology to advertisers for display on digital devices including mobile, desktop and smart TVs. This automated process is called ‘programmatic advertising’.

EN1 has also recently launched a rapidly growing complementary business in the burgeoning digital influencer marketing space. Central to this business leg is IconicReach, one of the world’s first self-serve influencer marketing platforms for Instagram, which is rapidly growing.

IconicReach lets brands browse and discover influencers, create campaigns and reach customers through limited time advertisements posted by those influencers.

Driven by the ubiquity of social media and mobile engagement, influencer marketing is now one of the fastest growing advertising tools.

According to eMarketer, the revenue from influencer marketing on Instagram alone was estimated at over US$570 million in 2016 — a recent study by Media Kix indicated this could reach more than US$2 billion by 2019.

It should be noted, however, that EN1’s full market penetration is yet to be seen, so investors should seek professional financial advice for more information if considering this stock for their portfolio.

New platform integrations

Programmatic integrations are server-to-server connections used by buyers and sellers on EN1’s marketplace to perform advertising transactions. All platform integrations require a significant investment in time and engineering resources from both EN1 and its partners.

These integrations are for desktop, mobile, television, display, mobile display and mobile native advertising. Once completed, they provide additional revenue opportunities for EN1 at very low additional incremental cost — the company will therefore benefit from significant economies of scale.

EN1’s programmatic platform integrations enable the company to build long-term commercial partnerships. Once an integration goes live, EN1 and the partner in question exchange advertising inventory data, significantly increasing revenues and operating margins for both parties.

More revenue-generating integrations

In the second half of this year, EN1 completed 12 additional programmatic platform integrations, and commenced generating revenue from them — this is in addition to the 28 platform integrations that it had completed at the time of the IPO.

EN1 has now completed and launched 40 integrations in total. A further 30 new programmatic partner contracts have been signed this year, which will result in significantly expanded revenues to come.

The company is expecting to complete another 10 integrations in January—March next year, and also has more in its business development pipeline.

EN1 co-founder and executive chairman, Ted Dhanik said: “We’re very happy with the traction we have gained in the programmatic advertising market, and are excited to see the rate of growth increasing.

“Engage:BDR has grown substantially since 2009, with a compound annual growth rate (CAGR) of 48% over that time. These new partnerships will ensure that the growth continues as we head into 2018.”

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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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