Tremor & Amobee
Portfolio ende of May '22
$EPSIL $YSN $EVO $MDGIF $KSPI $AMZN $GRN.WA $META $LEAT $GOOG $IDT $TRMR $APPS $VOW.OL $BKNG $ST5 $KAMBI $PAS.WA $MYNA $U $TCEHY $INPST $NVDA $BABA $SE $ADBE $MNST $SPOT
$ETH $BTC $LTC $YGG $ENJIN $DOT $ADA $BCH $IOTA
$BCH (not bought, found it in an old wallet LOL)
$TRMR Q1 results
▫️Contribution ex-TAC +13%
▫️adj. EBITDA +22%
▫️adj. EBITDA-Margin of 42% on rev. & 47% on contribution ex-TAC
*Contr. ex-TAC of $75-80m
*Adj. EBITDA of $40m
*Adj. EBITDA-Margin of ~50% on contr. ex-TAC
Portfolio end of February 202
$EPSIL $YSN $EVO $M8G $AMZN $ST5 $KSPI $GOOG $MBR $TRMR $LEAT $APPS $META $U $IDT $BKNG $MYNA $KAMBI $INPST $SPACE.AT $TCEHY $NVDA $SEYE $BABA $SE
$ETH $BTC $LTC $ENJIN $YGG $ADA $IOTA $DOT
Tremor International Q4 Results
$TRMR Q4 '21 results:
▫️Contr. ex-TAC +20%
▫️adj. EBITDA +38%
▫️adj. EBITDA-Margin of 53% on reported rev. & 61% on contr. ex-TAC
▫️CTV spend +47%, CTV contr. ex-TAC +32%
▫️CTV now accounts for 25% of total contr. ex-TAC
▫️Q1 guidance: Contr. ex-TAC of 73m & adj. EBITDA 33m￼
Portfolio end of January '21 (descending order)
Portfolio End of November '21
$YSN.DE $EPSIL.AT $EVO $KSPI $META $AMZN $ST5.DE $U $ENTER $GOOG $INPST $M8G $MYNA $NUMND $APM.DE $TRMR $KAMBI $BKNG $LVC $NTNX $SEYE $MBR $TCEHY $NVDA $BABA $SE
Sold: $GRVY $BICO $NGMS $FAA
$ETH $BTC $LTC $YGG $ENJIN $ADA $IOTA $DOT
+ wikifolio (ISIN: DE000LS9L8H9)
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Love the $ETH exposure. Need to research YSN and EPSI. I'll be interested to see if regulation impacts META or AMZN at all this coming year.
Advertising... From Micro to Large Cap!
You guy’s know I love Ad Tech. And you guy’s know I like the occasional speculative investment. So this week I wanted to run down a few of my Micro-Caps, but ended up writing about all my Ad Tech positions. These are all either in the port, were in the port, or on the watchlist to add to the port.
Micro’s are not for the faint of heart. Details are scarce, information is slow to get out, and volatility is high. So remember to size your positions according to your risk tolerance.
And if you’re still trying to figure out the difference between a SSP/DSP, never fear, remember to check out “The World of Ad Tech” to get the full breakdown on the industry.
Without further delay, let’s dive in. 👇
Moovly Media ($MVVYF)
Market Cap: $19M
Share Price: $0.12
Earnings: ‘21 projection of $1.55M, up about 10% YoY; operating expense $4.4M, up about 50% YoY
What they do: Moovly provides cloud-based creative tools for users to create compelling marketing, communication, and training videos & presentations. Clients include over 300 of the Fortune 500, along with many other small businesses, freelancers, and Ivy league universities. They also recently announced they were launching podcasts as well!
My interest: I started this position a little early and have averaged down a couple of times. I’m impressed by their website & social media compared to many peers. Positive news and partnerships continue to be announced on almost a weekly basis. They have had a couple of quarters with Revenue above operating expenses, but they need to show consistent signs of becoming profitable (or at least breaking even). I love the company, if they can increase revenue and cut costs, I believe this name can have a nice run. Would likely start trimming shares over $0.50.
Current Position: 50,000 shares @ .20 basis; Approx. 0.5% position
ZOOMD Technologies ($ZMDTF, $ZOMD)
Market Cap: $31M
Share Price: $0.33
Earnings: 2Q2021 Rev $11.1M +97% YoY and a record for the company. Record adjusted EBITDA of $1.3M. Maintaining +30%-40% full year rev growth. $2M cash on hand and $0 debt.
What they do: ZOOMD offers a site search engine to publishers and a mobile app user acquisition platform to advertisers. In January 2021, they launched a self service SaaS platform to save it’s customers time, resources, and money in the ad buying and optimization process.
My interest: I bought my full position over 2 days in Jan ‘21. This is a moon or bust position for me that I have no plans to average up on. Would consider trimming around $1 depending on market conditions at the time.
Current Position: 20,000 shares @ .23 basis; Approx. 0.6% position
Market Cap: $49M
Share Price: $3.50
Earnings: 2Q2021 Rev $500k, 440% YoY increase for the same period. Quarterly loss of (0.12) per share, YoY increase of 71% from a loss of (0.42) for the same period. Cash balance of $30.5M.
What they do: Kubient operates “Audience Cloud”, a flexible open marketplace for advertisers & publishers. Their Ad Fraud software “KAI” has been reported to have significant success with a pipeline of interested customers. Rollouts to new customers has been slow, and primarily delayed by the inability to hire enough qualified personnel.
My interest: I’ve been in & out of this company a few times, but I’m planning to stay as long as they continue to get a positive response to KAI. It’s a definite market need, and early success could compound quickly. They are also a potential buy-out target. Currently trading near 1.5x cash on hand, I’m willing to give them a little time to increase hiring and decrease roll out time to new customers.
Current Position: 2,000 shares @ $4.82 basis; Approx. 0.6% position
AcuityAds ($ATY, formally $ACUIF)
Market Cap: $456M
Share Price: $7.50
Earnings: 2Q2021 Revenue $30.3M (+55%) & $5.4M (+154%) in adjusted EBITDA. Positive net income of $3.4M and $93.4M cash on hand.
What they do: Acuity is disrupting the traditional Ad Tech model with their platform Illumin. Illumin offers planning, buying, & omnichannel intelligence in a single platform. It is a radically easier and more effective interface for placing online ads. Advertisers can map their own journey without an agency. This could open up a huge market for small mom & pop companies to utilize digital advertising on a limited budget. You can check out a short thread I wrote on Acuity back in April ‘21 HERE!
My interest: This is all about the story. They are trying to bring the little guy to programmatic advertising through their software Illumin. As long as that story stays intact, I will remain an investor. I had a position at $6, and doubled it when they dipped from $26 to $12. No plans to add or trim.
Current Position: 2,000 shares @ $8.00 basis; Approx. 1.5% position
Market Cap: $1.3B (implied valuation)
Share Price: $10.00 (SPAC)
Earnings: ‘21 Revenue $68.8M +21% YoY; Gross Profit $56.1M +81% margin; Adjusted EBITDA $2.6M
What they do: Innovid is a independent ad delivery and measurement platform for connected TV. Uniquely from their competitors, they consider themselves an infrastructure software platform that works with (not against) DSP, SSP, Publisher, etc. You can read more on this CommonStock Memo HERE!
My interest: SPACs have been out of favor, and there is no telling how the market will react when they de-SPAC (planned for 4th Q 2021). I started a position in June, that I sold at the beginning of September to free up some trading capital (it hasn’t moved in months). I plan to restart the position by the end of the month.
C**urrent Position are you** you: Plan to buy a starter position (1000 shares) by the end of September. Will likely add on any de-SPAC weakness.
Market Cap: $1.44B
Share Price: $28.00
Earnings: FY21 Expected Rev $207M, EBITDA $68M, Margin 33%. $122M Cash, no debt.
What they do: PubMatic is an SSP, providing publisher inventory to agencies and advertisers.
My interest: The Ad Tech space is young with a ton of innovation and growing TAM. I think PubMatic is slightly undervalued compared to it’s peers, which provides an additional investment opportunity in the space. This position is more of a highbred Swing for me, meaning I may sell on a stock rebound, but open to holding if it looks like they start gaining market share relative to other holdings.
Current Position: 750 shares @ $30 basis; Approx. 2% position
Market Cap: $1.5B
Share Price: $19.00
Earnings: FY21 Expected Rev $303M, EBITDA $117M, Margin 38%
What they do: Tremor plays both sides of the SSP/DSP game.
My interest: History suggests that companies who focus on one side or the other have more success, but earnings and valuations are getting interesting compared to their peers. It’s on the short list to add to the portfolio.
Current Position: None currently, but have a starter limit order in at $18.00/share
Market Cap: $3.88B
Share Price: $29.00
Earnings: FY21 Expected Rev $416M, EBITDA $131M, Margin 31%
What they do: Magnite is the world’s largest independent sell-side advertising platform. They continue to make strategic acquisitions, such as SpotX, to further their industry dominance, specifically to better serve the fast-growing CTV market.
My interest: My 2nd Ad Tech purchase ever. After buying the largest DSP ($TTD) in June 2020, I found the largest SSP player (Magnite) in August, and averaged up in September. They continue to lead the space with their focus on on where advertising is going (CTV). I’m a little price anchored with this position, so have been adding some option plays on these dips below $30. No plan to trim or sell. You can find my write-up from June HERE.
Current Position: 1500 shares @ $6.77 basis; Approx. 5% position
Digital Turbine ($APPS)
Market Cap: $6B
Share Price: $63.00
Earnings: 1Q2021 Rev $212M vs $190M estimate; guidance for 2Q2021 Rev $300M-$306M vs $291M Est.
What they do: Digital Turbine works in the Ad Tech space, but in a very unique manner. Through their software platform Ignite, they help advertisers, mobile operators, and original equipment manufacturers (OEMs) all at the same time. Pre-installed on over 700 million Android devices, Ignite is used to pre-load & load mobile applications among other verticals (very rudimentary summary). IQ (aka: @investmentquotes) has an excellent deep dive on $APPS… HERE!
My interest: It took me a while to understand what these guy’s actually did, and I still think they are misunderstood by the market. They are the ONLY player in their space. Maybe not the exact comparison, but I think of them like the Apple App Store for Android.
Current Position: 300 shares @ $64.57 basis; Approx. 2% position
The Trade Desk ($TTD)
Market Cap: $35B
Share Price: $73.00
Earnings: 2Q2021 Rev doubled to $280M from $139.4M a year ago. 3Q guidance was raised to $282M from $275M consensus estimates.
What they do: The largest DSP on the market, they service ad agencies & advertisers. A reminder, you can check out “The World of Ad Tech” Newsletter for details on how all the players interact with each other.
My interest: My first exposure to Ad Tech was seeing $TTD mentioned all over FinTwit. After taking a small position in June of 2020, I finally averaged up on the May ‘21 dip. They are the biggest player in the space, and winners continue to win. No plan’s to trim or sell.
Current Position: 350 shares @ $45.13 basis; Approx. 2.5% position
I discovered the whole world of Ad Tech thanks to my fellow FinTwitters. It is my 2nd largest investment sector behind E-commerce, representing 18% of the portfolio.
I was lucky to discover the sector as it was coming out of the Covid lows, and although it’s had some downward pressure on it the last few months, we are still in the early stages of opportunity.
I’ve listed the pure plays here, but there are many more companies in the industry. I also own $ROKU $FB $EGLX $AAPL $AMZN and more… that all have a piece of the advertising space.
I hope this weeks Memo introduces you to a few names you may not know. Remember to do your own due diligence, and size your positions according to your risk appetite.
You can check out the full Newsletter here: Stock Squawk Newsletter!
What are your favorites?
The World of Ad Tech
Those who follow me know I love Ad Tech! ❤
The ads you see on your screen take quite the circuitous route to get there, so let’s break it down.
A publisher provides the capability and inventory that allows advertisers to run ads on their site (CTV, Mobile, Website, App, etc.). Publishers earn money by displaying ads.
Popular FinTwit Publishers:
- ROKU ($ROKU): Hardware & Software streaming platform with content from multiple providers including AppleTV, Peacock, The CW, CBS, NBC, PBS Kids, etc.
- Curiosity Stream ($CURI): Streaming platform focused on docu-series.
- Twitter ($TWTR): Social media platform
- Pinterest ($PINS): Visual discovery platform
- FuboTV ($FUBO): Sports streaming platform
- Enthusiast Gaming ($EGLX): Video game & E-Sports publisher (large Gen Z audience)
- Google ($GOOG/$GOOGL) & Facebook ($FB): Commonly referred to as “walled gardens”, because they manage all their ad inventory internally with their own services.
Supply "Sell" Side Platforms (SSP)
An SSP is a advertising technology (AdTech) platform used to coordinate and manage the supply and distribution of ad inventories. SSPs help digital media owners and publishers sell digital ads in automated auctions.
They enable publishers to optimize yield by simultaneously connecting their inventory to multiple ad exchanges and DSPs.
- Magnite ($MGNI): Formally The Rubicon Project, recently acquired SpotX; forming the worlds largest independent sell-side Ad platform.
- PubMatic ($PUBM): Empowers independent app developers and publishers to control and maximize their digital advertising businesses. It enables advertisers to drive ROI by reaching and engaging their target audiences in brand-safe, premium environments across ad formats and devices.
- Tremor ($TRMR/$TTTPF): formerly Taptica, an Israel based company engaged in digital ad solutions which leverage video, native, and display technology to reach users. They focus on video ads and brand stories.
An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, through real-time auctions; most often used to sell display, video, and mobile ad inventory.
Some large exchanges include Amazon Publisher, PopAds, AppNexus, AOL’s Marketplace, Microsoft Ad Exchange, and dozens more…
Demand Side Platforms (DSP)
A DSP is a 3rd party software that is used by advertisers to buy mobile, search, and video ads from a marketplace on which publishers list advertising inventory. A DSP allows for the management of advertising across many real-time bidding networks, as opposed to just one, like Google Ads (commonly referred to as a “walled garden”).
Of note: traditionally DSPs predominantly work with ad agencies, although some companies are changing that approach.
- The Trade Desk ($TTD): Largest independent DSP providing Ad pricing “Supply” to advertisers.
- AcuityAds ($ACUIF): DSP platform “Illumin” focused on self-service ability of the advertisers, potentially cutting out the ad agencies & their 30%-50% cut of ad fee’s. Additionally, the platform will give small local business’s the opportunity to efficiently and affordably advertise in their area (something not available to them currently).
- Digital Turbine ($APPS): DSP platform adopted by many mobile operators & OEMs primarily focused on App downloads (pre-loads) for their clients.
An advertising agency is a professional service firm hired to conceive, produce, and manage advertising for their clients.
They plan, design, place, and supervise the advertisements and advertising campaigns of advertisers for optimal ROI.
Some of the largest ad agencies include WPP Group in London, Omnicom Group in New York, Publicis Groupe in Paris, Interpublic Group in New York, and Dentsu in Tokyo.
If you have a service, event, or product; you need to get the word out to potential customers.
What’s important to an advertiser?
- Target audience: An advertiser wants to make sure the intended audience is seeing their ads.
- Branding: It’s important for companies to ensure they maintain brand image. You wouldn’t want a Tito’s ad popping up on an article about drunk driving 😬.
- Conversion: Ultimately, an advertiser wants to convert their ads into sales.
There are as many advertisers as their are companies; a few popular with FinTwit from different industries:
- Apple ($AAPL)
- Amazon ($AMZN)
- Peloton ($PTON)
- HomeDepot ($HD)
- Walmart ($WMT)
- Square ($SQ)
- Etc. Etc. Etc…
Programmatic advertising is the process of buying and selling ads with software, and publishing those ads contextually based on complex algorithms. Most online advertising now is done programmatically through real-time bidding.
Real-time bidding advertising takes place (wait for it…) in real-time. You specify who you want to reach with your ads and how much you’re willing to spend, then a bidding war takes place between you and all the other advertisers trying to reach the same audience.
The whole process takes just 50 milliseconds! 😲
The New Reality
- Cookies are going away.
- Advertising is moving more and more dollars to CTV.
- Companies are working on ways to seamlessly insert advertising into our viewer experience without looking like they’re advertising to us.
- AI is allowing for more of the work to be done automatically, which is lowering the barrier for entry (Companies won’t need $50k-00k advertising budgets just to get started).
All the companies I mentioned (and many more) are working to solve these problems. The goal for investors is to find the companies who will do it faster and better than the rest.
I believe Ad Tech will outperform the broader market as the economy continues to open up. And I will continue to look for companies within the sector I believe can out perform.
I hope this gives you a better understanding of the industry as a whole, and I look forward to expanding on some of these individual companies in the future.
P.S. There should really be a good Ad Tech ETF out there! If you are starting one, give me a shout! 😊
You can see prior newsletters, and sign-up for future issues below. 👇
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Thanks for this clean and great explanation of the world of ad tech.
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