Shares in AI advertising tech stock Mirriad Advertising plc LON:MIRI were on the march again this week, up 28% on a 30 day basis at time of writing (Monday afternoon). Mirriad is a strange cookie: the company feels like it should be bigger and more widely recognised than it is, and with a much bigger market cap.
The stock obviously has its followers as recent price performance can attest to. But shares had been slipping before the recent rally. Mirriad shares hit 63p in April 2021, now they can be had for a mere 2.08p. Should its fortunes turn around, of course, this micro-cap could end up a star performer. What’s holding it back?
Why is Mirriad Advertising not a bigger company?
Mirriad seems to tick all the right boxes. It is a tech company which leverages existing artificial intelligence in the fast-growing digital advertising sector. It is live in 11 countries with over 100 brands and more than 60 premium content partners.
We wrote the company up last year in the wake of news that it would be working with Microsoft on the release of a new API.
Mirriad said at the time that the new API would be its first release in collaboration with Microsoft and a main step in the company’s path to scale through automation and integration with the programmatic advertising eco-system. The deal with Microsoft was described as “wide ranging” and with the scope to unlock significant benefits and opportunities for both parties.
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Mirriad sits on top of a patented, AI and computer vision powered platform which dynamically inserts products and innovative signage formats after content is produced. It has a first to market solution that it believes will create a new revenue model for content owners distributing across traditional ad supported and subscription services.
Mirriad’s new direction
At the time Mirriad said it was embarking on a “strategy reset” including developing its technology to integrate with existing industry frameworks and systems. It had completed Segment Streaming Technology APIs that allow scaled delivery to the systems used widely by Mirriad’s partners. This has led in turn to some significant new contracts which we still think investors have not properly priced in yet. This includes deals with Tencent, France TV and Conde Nast.
Part of the excitement in the market is coming from the announcement of a strategic agreement with TripleLife Inc, which the company announced Monday. TripleLift operates a supply-side platform for advanced ad formats that processes over one trillion monthly ad transactions across online video, connected television and other channels.
As part of the partnership, TripleLift’s SSP will facilitate automated selling of in-content inventory from Mirriad’s growing number of supply partners into leading media buying platforms such as Google’s DV360 and the Trade Desk. This will give advertisers and media buyers the ability to buy this inventory in their programmatic platform of choice.
Mirriad said the programmatic model is the pivot to scaling the in-content format as a new standard across the digital ad-buying ecosystem. Programmatic ad buying utilises algorithms and technology platforms to automate buying, placement and optimisation of digital media inventory on a massive scale, making the process more efficient, precise and expandable than the traditional ‘manual’ processes the company has used to date, especially for broadcast TV inventory.
“This partnership establishes our connection to nearly all the world’s leading demand-side platforms, offering advertisers an automated way to purchase in-content placements on their preferred platforms, targeting key audiences within Mirriad’s expanding network of partners,” said Stephan Beringer, the CEO of Mirriad. “Following recent agreements with US entertainment ‘majors’ and ‘super majors’, and the programmatic testing with partners and content distribution platforms over the last 18 months, we are a key step closer towards a ‘plug-and-sell’ proposition which will accelerate adoption and scaling.”
Despite all the big news coming out of the company, however, investors need to keep an eye on bottom line figures. The stock currently still has a market cap just over £10m. Although the company said it had agreements in place with side partners representing approx 25% of the US TV advertising market, up from 8% in Q3 2023, FY 2023 revenue was £1.8m. To be fair, this was still an increase of 20% on FY 2022. Mirriad said total revenue for FY 2023 may increase by as much as 31%.
Beringer himself said that the deals closed in Q4 are part of a long-planned adoption phase with key industry players and that the “hardest yards” are now behind Mirriad.
Nic Hellyer, the company’s CFO, added that Mirriad’s operating profile is changing fast: “Revenue generated in 2023 reflected the fact that the business was still operating in ‘manual’ mode, with less than 10% of the key US market,” he said. “With the majority of that market now under contract or in serious discussions, a firmer starting pipeline for revenue and multiple programmatic integrations underway to change the way inventory is sold, we are focused on delivering a substantial improvement in performance in the current year.”
The company has been talking about a strategy re-set, and the deals it has been closing could be seen as part of that implementation process. Those investors who are talking about considerable institutional interest in the stock should still bear in mind that with this market cap, many larger investors will still have to sit on their hands and wait to see if it can grow back up to the sort of size it was in 2021. Smaller investors can benefit from the growth the management team expects to see from its new strategy. It’s definitely one to keep an eye on.
