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Mirriad Advertising: Programmatic the key to scale and growth

Mirriad, the leading in-content advertising company is listed on the London Stock Exchange and has a market capitalisation of £7 million.


Half year results to 30 June 2023 were released on 22 August and we were delighted to welcome Stephan Beringer, CEO, David Dorans, CFO, Mark Melvin, GM North America and Philip Mattimoe, CTO to present at the latest Yellowstone Advisory webinar for private investors.


Mirriad technology enables products and innovative signage to be dynamically inserted into video content after the content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions. A visit to their website provides a good example of this platform and technology.



The scale of the opportunity for Mirriad is huge: The US advertising spend on TV and Video is approximately $106bn annually according to Zenith. The majority is spent on traditional Linear and cable TV but their reach is falling and fell below 50% for the first time in July this year. This negatively impacts the availability of advertising inventory and in-content product and advertising placement is uniquely placed to fill this gap. Indeed, a couple of the large tier 1 content suppliers have said that in-content product placement is one of the solutions they are looking at to declining traditional TV advertising revenue. Mirriad is the most adopted in-content ad platform in the US and EMEA and so is ideally placed to be the global leader in this market. They are already working, negotiating or testing with 9 out of the top 10 US entertainment giants. On the demand side, 15 out of the top 20 advertisers are either working with Mirriad or considering running campaigns in the second half of 2023.


Programmatic trading of in-content product placement is the key to unlocking and capitalising on the growth of this new format and management believe the company is on point of launching this. If only 2.4% of the current TV advertising spend moves to in-content and Mirriad is able to capture as market leader a 20% share this would provide a $125m revenue opportunity for the company (assuming Mirriad take 25% revenue share which they are currently achieving).


Earlier this year the company raised £5.7m of net new funds and ended the half year with a cash balance of £9.8m. First half sales were £592k, which were generated still using the current version of Mirriad’s technology in the pre-programmatic phase, a small increase on the previous year. Good progress was made in EMEA but the US market was slightly weaker than expected, which can be attributed to the softness of the advertising market since Q4 2022. That said the company ended the period with a sales pipeline which was stronger than ever before and expect to introduce programmatic sales in 2024. The H1 operating loss was £7.5m, lower than last due to the cost savings implemented.


Following the fund raise the company undertook restructuring to reduce the monthly net cash burn to an anticipated £700k from July 2023 to June 2024. All operations in China have been closed, the commercial operations in EMEA steamlined and some re-organisation undertaken in the technology team, this programme resulting in an annualised saving of £2.5m was previously announced, and there was a second restructuring announced in June. In the second wave of savings the tech team was further refined and there was a material cost reduction in US headcount. Both these restructurings were completed by the end of the first half at a cost of £550k in 2022 and £186k in the first half of 2023. From a total headcount of 142 at the end of H1 2022 the company ended 2022 with 115 staff and ended H1 2023 with a headcount of 91. The company is now putting all of its efforts into launching its programmatic solution to the market before the end of 2023.


The first half of 2023 showed good progress on many supply side and demand side KPI’s. On the supply side, the number of partners represented increased to 68, an increase of 13% and there was a 22% increase in the seconds of available content. On the demand side the number of active agency relationships doubled to 18 and there was a 72% increase in the number of advertisers who have run campaigns. Not only have 31 advertisers run campaigns but there was also a 300% increase in advertisers running a repeat campaign. These advertisers are experiencing the success of in-content product placement and want to buy more of it. Importantly they are also indicating they want to buy it programmatically. The second half of the year will see better sales due to improvements in the underlying markets, seasonality of a stronger second half and new partner spending. Whilst this is all encouraging management recognise that to really scale and grow to its potential a programmatic solution is key.


Demand and interest in programmatic have never been higher from the supply side too and Mirriad is focussed on the largest players. Major programmatic integrations are in progress and negotiations with a number of partners are progressing. Direct competitors are not, to their knowledge, doing anything comparable which places Mirriad in a very strong position. The company is expecting to run a number of campaigns in Q4 and management and shareholders alike await the first major supplier to sign up to their programmatic solution. This is potentially a turning point for the business.


Mirriad has relationships with major advertisers and their agencies and they’re working with nine of the top 20 US advertising spenders and have six more in discussion. In terms on content supply, they are working with 5 of the top 10 players and are in dialogue with 4 more. Finally on the technology ecosystem front, Mirriad is working with 9 of the top 15 players. Deeper engagement is being seen across the board and this is a step change in engagement over a relatively short space of time.


The rationale for programmatic was illustrated with a comparison against linear TV. Whilst success in Linear could yield gross advertising revenues of $10m with 1 broadcast partner, revenues of 10x this figure could be achieved with success with one streaming partner. It’s the benefit of becoming a simple to order line item in the marketing budget. Mirriad generally takes a 25% share of gross advertising revenues generated by supply side partners.

The technology has evolved considerably over the years to get to this programmatic ready state. In the first iteration of Mirriad, between 2015 and 2018, the core video effects and computer vision capabilities were developed. In Mirriad 2.0, between 2019 and 2022, there was a significant increase in automation and self-service and a more mature workflow was developed, but crucially there was no dynamic insertion. In the current phase of development, Mirriad 3.0, the programmatic capability has been developed. It enables virtual product placement advertising to behave like any other advertising format. It’s built on a cloud based open architecture system and standards that integrate into the ecosystems used by the Tier 1 content suppliers. This technology is ready to be deployed now. Mirriad has already delivered proof of concept and successful commercial trials for clients. It is due for full commercial release by the end of the year. It has been very much designed with security and scale in mind and provides the foundation for a successful future for Mirriad.


In summary, Mirriad is on the cusp of making significant inroads into a huge addressable market in virtual product placement. It’s taken longer than many had hoped for but integrating a programmatic solution into an advertising market with established ways and players was never going to be easy. The important thing is that after a large amount of effort from many players, there is now a very clear path to scale with programmatic in 2024 and beyond. Advertising brands want this solution and once the first contract with an entertainment major is signed it will hopefully lead to a number taking advantage of this new advertising format to grow their own advertising revenues and generate significant revenues for Mirriad at the same time. This is something a confident management team and their shareholders will both be hoping for.

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