A mirriad (sic) of opportunity in the global advertising boom
3rd March 2022 |
Events are moving quickly in Eastern Europe, following Russia’s invasion of Ukraine on 24 February. Markets remain volatile and unpredictable as a result. This is having some effect on the Frontier Tech Investor buy list.
However, this does nothing to change our long term positivity for all the holdings in our portfolio and the wider market in general.
If our view of any of the stocks changes, you’ll be the first to know.
Now, on to this week’s edition of Frontier Tech Investor…
Seeing is believing… or is it?
Take a look at this picture.
Source: Mirriad
It’s a snippet from a music video, belonging to Colombian singer Giovanny Ayala.
As you can see, a man and woman are gazing into each other’s eyes in a dining room.
It all seems pretty innocuous.
The more eagle eyed amongst you would have noticed the two cans of Tecate beer sitting on the table in the foreground.
It’s still pretty innocuous, right?
Not exactly.
What if we told you the beers you think you’re seeing are a complete fabrication? That is to say that the beer cans are not really on the table at all: they’re fake, but there is no way that you would be able to spot it.
That’s the beauty of Mirriad Advertising (LSE: MIRI). Its game-changing, in-content advertising solution allows advertisements to be inserted into footage after that content has been produced.
It provides ample opportunities for retailers to advertise their brand which is not restricted to the original footage. Because the insertions are so subtle and realistic, viewing quality (and viewer satisfaction) is not affected.
Before going any further, it’s worth considering the following hard numbers.
In 2021, by advertising expenditure, the three largest advertising markets in the world were:
- Firstly, the US market, with $285.21 billion spent on advertising
- Secondly, the Chinese market, with $90.94 billion spent
- And then, the Japanese market, with expenditure of $51.75 billion.
Until recently, Mirriad had a stronghold in two of these markets.
In November 2021, Mirriad announced a partnership with US media production company Crown Media Family networks, which saw Mirriad provide its solution to advertisers on Crown’s network.
In addition, Mirriad is also infiltrating the Chinese advertising market, through its partnership with technology giant Tencent.
And now, Mirriad has moved into the Japanese market for the first time.
On 28 February 2022, Mirriad announced a collaboration with one of Japan’s largest broadcasters, Fuji TV. In the deal, advertisers on the network will utilise Mirriad’s in-content advertising solution.
According to Mirriad, the “first advertising insertions appeared in a drama show airing on Fuji’s video on demand platform” on 26 February 2022.
Whilst expansion into these three markets isn’t the be all and end all, it shows Mirriad’s desire to realise its growth potential as a global advertising technology company. For investors like ourselves, this is hugely encouraging to see.
What’s also exciting is that the newsflow from Mirriad comes at a time where the advertising industry is in the midst of a resurgence.
After a dormant lockdown period, which reduced the incentive to spend big on advertising campaigns, advertising is once again at the forefront of retailers’ minds.
According to the firm Zenith, from 2020 to 2021, global advertising spending increased from $595.7 billion to $688.8 billion – a 15.6% increase. Since the turn of the millennium, this is the biggest year-on-year increase.
Of course, the pandemic makes this figure look slightly inflated. But, even so, the global advertising marketplace is now 19% larger than pre-Covid levels.
So, you could say that we’re in the midst of an advertising boom that is showing little sign of relenting.
Finally, whilst on the topic of advertising, we should say something about Ocean Outdoor (LSE: OOUT).
The company is an operator of premium advertising space in the UK. In last week’s update, we informed you of Ocean’s positive trading update.
On 25 February 2022, the company announced a partnership with ParalympicsGB – the UK Paralympics team.
In the partnership, Ocean Outdoor will display Winter Paralympic highlights and medal tables on 26 advertising screens across six UK cities, including London and Glasgow. The winter Paralympics are due to begin in Beijing, China, on 4 March 2022.
In our view, this deal will bring increased publicity to Ocean Outdoor, providing it with new opportunities to monetise its premium advertising space.
We reiterate our BUY recommendation for Mirriad Advertising and our HOLD recommendation for Ocean Outdoor. You can find the respective, original recommendations here and here.
Buy list update
Blancco Tech Group (LSE: BLTG)
Blancco Tech Group is a provider of data erasure software. Its technology helps to clear sensitive data from devices without a trace left behind.
This allows companies to boost cybersecurity and, at the same time, adhere to regulations regarding data storage.
Blancco’s latest trading update, released on 22 February 2022, is hugely encouraging.
For the six months ended 31 December 2021, Blancco reported revenues of £19.7 million. This is a 13% increase on the £17.4 million figure reported for the same period in the previous year.
In addition, for the six months ended 31 December 2021, operating profits rose 168% on the previous corresponding period, rising from £0.7 million to £1.9 million.
Blancco also has a healthy cash position, holding net cash of £10.2 million.
We believe Blancco’s services could prove to be vital in a world that is under siege from costly cyber-attacks.
According to Cybersecurity Ventures, cybercrime will cost the world $10.5 trillion annually by 2025.
This is becoming so much of a problem that the UK government is introducing laws to improve cyber defences, which you can learn more about in our 27 January 2022 update.
With this in mind, we believe that Blancco is the right company in the right place at the right time.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions. If you’re trying to figure out what to invest in next, these are three that we think are a great place to start.
This doesn’t mean our other stocks are no good: this is just a tool to help you spot the next Frontier Tech Investor stock that could be worthy of your consideration.
EQTEC (LSE: EQT) – EQTEC is a unique, green energy company that is setting the standard for sustainable energy production. Its innovative gasification technology can convert up to 50 feedstocks into sustainable energy sources. It plays a pivotal role in reducing methane emissions from rotting waste at landfill sites. This matters because methane can be up to 86 times more potent than carbon dioxide at trapping heat in the atmosphere. As a result, we believe that the company has a key role to play in helping policymakers achieve stringent emissions targets in the face of COP26. You can find the original recommendation here.
MPAC Group (LSE: MPAC) – MPAC is a leading provider of packaging solutions. The company is helping to deliver efficiency gains to customers through its automated processes that harness some of the most powerful technologies of the modern day. This includes augmented reality (AR) and the use of “smart” machinery. With MPAC, it’s the machines telling the human what to do, rather than the other way round, with the result that human error is eradicated and that manufacturing lines are smoother than ever before. You can find the original recommendation here.
Volex (LSE: VLX) – Volex is a global manufacturer of power and connectivity products. This includes power cables, fibre optics and charging plugs. It might sound a little basic – however, these are critical mechanisms which are powering some of the key technologies of the modern day. These technologies include electric vehicles (EVs), artificial intelligence (AI) and big data networks. Volex has huge credibility behind it, especially as it does business with some of most widely recognised companies in the world, including Tesla. You can find the original recommendation here.
Sam Volkering
Editor, Frontier Tech Investor
Elliott Playle
Junior Analyst, Frontier Tech Investor
