Digital advertising has very much come of age over the past year as the coronavirus (COVID-19) has forced everyone to work online to help battle against the spread of the pandemic.
Digital advertising generated an estimated US$273.29 billion in media advertising spending in 2018 and is expected to grow to $393 billion in 2021.
Google, Facebook, Amazon, and other large internet companies have capitalized on the value of their highly-trafficked sites by selling space to advertise goods and services. They have also developed elaborate platforms and programs to sell this advertising space.
Companies moving into the digital advertising arena have seen exceptional growth, but they have also had to deal with new technologies and the impact of changes to privacy policies by some of these big players.
As a result, an AdTech market has emerged for software tools to help advertisers run online advertising campaigns on these sites, optimize advertising spending and improve the results of their campaigns.
One company that has tapped into the zeitgeist is Israel-based Adcore Inc. (TSX:ADCO) (FRA:ADQ), which provides search engine marketing software solutions and services via automation and machine learning technologies.
Using machine learning artificial intelligence (AI) technology, Adcore’s cloud-based suite of software-as-a-service (SaaS) products provides digital advertisers with smart algorithm powered automation tools, reporting, and analytics in order to help them improve online advertising effectiveness, maximize their return on advertising investment and scale-up their digital campaigns.
Adcore has targeted three key digital advertising market segments with its products and technologies: search engine marketing, social media marketing and shopping. Adcore’s customers include enterprise companies, and small and medium-sized businesses from Asia-Pacific, Europe, the Middle East and North America.
Proactive sat down with Adcore chief executive officer Omri Brill to learn more about the company.
Can you tell us something about what the company offers businesses?
Adcore offers a suite of apps built especially for eCommerce businesses, fitting any business size and marketing need. From a small merchant which has just opened its Shopify store to a large eCommerce enterprise business which operates in multiple geo-locations targeting multiple currencies. Adcore has become the market leader and the number one go-to destination for eCommerce marketing solutions.
Adcore is looking to become a billion-plus company by market cap. Can you outline your growth ambitions, both organically as well as through new ventures/business lines and M&A in conjunction with a potential capital raise?
The company has already proven that it can rapidly grow organically. We have expanded our geographical reach, by opening new offices across the globe, including yet another office in Shanghai during 2021. We already have the system in place to gain more market share in any geo-location. So, in terms of growth ambitions, we plan to continue doing what we’ve been doing organically but on an even larger scale.
Another growth path that the company is planning to take is M&A. The company believes now that there are plenty of opportunities post-COVID-19 with a lot of interesting targets. Moving forward, our growth will ideally be a balance between organic and strategic M&A.
Furthermore, Adcore needs to take new initiatives in order to expand the value of the company. It is not in our DNA to just continue doing what we're doing. We are going to scale this business dramatically, and organic growth, M&A and innovation will be part of the new formula.
So you have got a big focus on getting a stronger presence in the US, including a full OTCQX listing. Do you have a timescale for that move?
In our last conference call I told our shareholders that it is coming in the next 60 days or so, and that will still be my answer. I can say that we are making progress over there. And obviously, as with all these things, it takes time. But I would say the company is on track for getting this listing done and, hopefully, it should happen within the second quarter.
We have got the new take on privacy policies from Google and Apple's newest iOS update on privacy data collection. How's that impacting digital advertising?
It is obviously having some impact, more on Facebook and on iOS in the US market. So, if you rely heavily on Facebook and the penetration of the US market with iOS, then you're going to feel more of an impact. If you're less reliant on the US as a main market, and less reliant on Facebook, then it's going to have less of an impact on your business.
Adcore believes that in the long-run, publishers including Facebook will understand how to overcome this hurdle, and over that time numbers should go back to normal. So, even if there is going to be some impact, we foresee that it is going to be a relatively short-term impact.
As an eCommerce AdTech company, Adcore will be less affected by these privacy changes.
So what do you think you yourself bring to the company as its CEO?
I have been successfully running this company for more than 15 years now. I come with a lot of experience on the tech side of things, and I also have a degree in industrial engineering and am still the mastermind behind most of the Adcore products. So, that's one side, and another side is a deep understanding of online marketing and online advertising.
The combination of these two areas, plus the ability to have an overlook of Adcore’s strong operational capability, I believe are my main contributions to the company. Also, in a sense, Adcore is still my baby. I still have a lot of equity in the company, a lot of skin in the game, and that shows that my level of commitment is as high as it can be.
Right, so what should investors expect from Adcore, for the rest of 2021, and beyond?
I would say that we will be even more focused on top-line growth moving forward. Up until 2020, the focus was very much on the bottom-line, making sure the company is profitable, making sure that we have a good margin. But this came at the expense of the ability to grow faster and gain more market share.
Moving forward, the focus will be more about growth on the top-line, and we’ll be less worried about the bottom-line because we believe that even if there is going to be a lag, it's going to catch up eventually. We’ll also be a more innovative company, making bolder moves to go into a new segment in areas that the company wasn't operating in before.
Adcore operates in a very interesting sphere. We are seeing a massive budget going online with the digital transformation because of COVID-19, and this level of activity is continuing as the pandemic subsides. The level of activity we are seeing now is unparalleled compared to what it was a year ago, so COVID-19 raised the bar and this digital transformation is here to stay.
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