engage:BDR Ltd (ASX:EN1) has outlined its strategic plan for 2020, which centres on continued revenue growth and profitability.
During 2020, the company intends to grow business in programmatic advertising and influencer marketing and is targeting the following milestones:
- Five new programmatic integrations signed per quarter,
- Five new CTV integrations signed starting quarter two,
- Two-four new IconicReach brands signed per quarter,
- One new pDOOH integration signed starting quarter three,
- Two new NetZero publishers signed per quarter,
- Develop and deploy several new technologies and revenue streams to enable significant reach of new customers, and
- Constant reduction in OpEx.
Programmatic exchange focus
The more programmatic partnerships the company has integrated, the higher the supply and demand sell-through.
The additional ad inventory and advertiser demand creates a network effect where demand on all inventory increases competition for each impression, bid-prices, sell-through and margins all increase; this will yield a direct impact on gross profit, net income and EBITDA.
Every two dollars in revenue is worth approximately one dollar in gross profit (54% margins in 2019), which impacts net profit tremendously.
EN1 intends to exceed 238 programmatic integrations by end of 2020.
Growing revenue streams
CTV (connected TV) apps on smart televisions and set-top boxes like Roku is growing quickly as an advertising stream, with the company expecting five new CTV integrations per quarter in 2020.
Another fast-growing area of digital media is pDOOH
EN1 expects one new pDOOH (programmatic digital out of home) integration per quarter, which includes billboards, TV screens, digital signs, taxi tops, bus stops, in-vehicle ads, WiFi hotspots, and kiosks.
EN1's stratgeic plan and milestones for first half 2020
Ad exchange initiatives
EN’s programmatic ad exchange reXer, will add native video advertising capabilities by quarter four which will enable a new revenue stream for EN1 as well.
The company also expects to reach 50% app ads.txt (where app publishers would list their authorised sellers within a file accessible by anyone at the time of bid) inventory quality coverage by the end of quarter one.
The company will also integrate sellers.json, which lists the value chain of the inventory, down to the publisher, and IdentityLink user tracking, which provides an anonymous identifier that pinpoints to a specific individual across multiple devices and channels, including offline.
NetZero is a post-paid publisher payments solution which significantly improves the cashflow of publishers by providing cost-free, immediate payment of invoices the day EN1 is invoiced.
The company plans to include two new, large publishers per quarter in 2020, totalling eight for the year.
IconicReach influencer marketplace
EN1’s reXer programmatic ad exchange will continue to integrate campaigns with the IconicReach influencer marketplace in 2020.
All new business for IconicReach is expected to include programmatic ad buys in addition to custom influencer content with the company targeting two-four new brands to be signed per quarter in 2020, for a total of 14.
As well as a new website for a simpler user interface, EN1’s will deploy performance attribution technology in quarter two, which would enable advertisers’ access to measure campaign performance and analytics across mobile apps.
EN1's milestones for the second half 2020
While AdCel DSP (demand-side platform) is enabled for display and video advertising on mobile and CTV apps only, the company expects to deploy native advertising support in quarter two.
EN1 is also targeting the deployment of AdCel’s time-based guaranteed attention product for advertisers which guarantees specific time metrics around the viewability of the ad to each user.
The company will also deploy chatbot ads and in quarter three intends to develop and deploy its CTV SDK (software development kit) to give advertisers the capability to cross-target users between channels and devices, and attribute and optimise performance for their ad buys.
In 2019, the company generated $1.15 million per person, and is targeting a significantly higher figure for 2020 with individual revenue targets and incentive plans for employees.
Going forwards the company aims to reduce infrastructure costs by around 10% in quarter two and is currently in dialog with all tech infrastructure providers (colocation, bandwidth, creative scanners, malware scanners, etc).
EN1 is looking to establish a strategic advisory board of key industry players and influencers in the areas of app publisher development, programmatic demand and inventory quality in quarter one and will hire an interim head of publisher development and a new yield manager by quarter two.