Digital Media -- The Next Generation: AI, Social for Video and Content to Web Ad Commerce

NetworkNewsWire Editorial Coverage

NEW YORK, Sept. 14, 2021 /PRNewswire/ -- Look a little closer, and it's clear that the world has entered a major global inflection point in the modern history of digital media. This new era of digital media is set to reshape the future of social fabric and revolutionize how brands connect with their consumers. The increasing innovation and intelligence in digital media tactics and strategies is making consumer messaging amazingly native and relevant. This personable approach  to online consumer targeting is providing ways to better serve brands by connecting to current and potential target consumers while cutting through the noise. As recently as 2019, mobile surpassed television on total time spent, and digital media has since rocketed past traditional media and advertising tactics. In fact many of the more established digital market tactics have become antiquated. Email marketing is dead, and traditional web banner ads are on life support. Brands understand that it takes more than a flash ad or a quick plug to inspire consumers. Enter the AI-driven martech and digital media software solutions market where innovative content, measurement and distribution solutions reside in all-encompassing marketing strategies engaging and communicating with target audiences through next-generation technology like that of DGTL Holdings Inc. (TSX.V: DGTL) (OTCQB: DGTHF) (Profile) to win and keep consumers' interest and loyalty. The rapid evolution of the marketplace often benefits smaller companies such as DGTL, IZEA Worldwide Inc. (NASDAQ: IZEA), The Trade Desk (NASDAQ: TTD), Acuity Ads Holdings Inc. (TSX: AT) and EQ Inc. (TSX.V: EQ), as they can be more nimble and generally innovative compared to international CRM juggernauts in helping brands reach their objectives.

• Proposed acquisition of Engagement Labs could add an expected C$3.5–$4 million to DGTL revenue.
• DGTL Holdings has teamed up with Spaceback as its first-ever certified content creator for social display advertisement.
• DGTL acquired CaaS provider Hashoff in January 2020, expanding the platform into a CaaS/SaaS company while growing sales 71%.
• DGTL Holdings is launching Hashoff 2.0 to enter video SaaS ad market; now enabled for TikTok, YouTube, etc.

Click here to view the custom infographic of the DGTL Holdings Inc. editorial.

Savvy Acquisition, Full-On SaaS Business

With those sales in tow through its CaaS service,DGTL Holdings Inc. (TSX.V: DGTL) (OTCQB: DGTHF) intends to complete the acquisition of Engagement Labs, targeting its flagship social media analytics software, Total Social. Adding an expected C$3.5–$4.0 million in revenue, the purchase price of C$1.7 million is just 0.5-times sales, which appears to be a significant valuation for DGTL by any metric in any industry, and particularly for a company with a C$11 million market capitalization.

The acquisition will also add to DGTL's portfolio of major customers and fundamentally strengthen the leadership team with select members of Engagement Labs to strengthen an already formidable DGTL C-suite and board of directors. Major new customers added to DGTL via the acquisition include Netflix, Hulu, Audible (an Amazon company), Progressive Insurance, MetLife and the National Football League.

The acquisition dovetails with DGTL's recently announced Spaceback partnership and launch of Hashoff 2.0 to take a leadership position in the video-based social media markets. The video component, partnership and total social acquisition cannot go understated individually or as a group, as DGTL is positioned as a leader in both the digital media and martech SaaS sectors.

The company sits at the leading edge of advertising content that is endemic to the emerging mobile/social media environment. The video opportunity means DGTL will be presenting an opportunity for brands to seamlessly get in front of users worldwide on apps such as TikTok and SnapChat.

Tiktok alone is the fastest-growing social media software in the world and the no. 1 downloaded application on Apples iOs store. Hashoff 2.0 also expands the potential global network of freelance social media influencers by adding more than one billion new active monthly users to its active #IAM Search & Discovery database software.

DGTL's digital media SaaS rollup strategy is certainly on trend with the activity of the major markets. A Goldman Sachs note reports that year to date, 219 SPACs have raised $73 billion in proceeds, representing a year-over-year jump of 462% and outpacing traditional IPOs by $6 billion.

Tier One Clients, Growing Sales

Common in the advertising sector, DGTL and Hashoff must be somewhat clandestine at times with regards to the names of their clients. However, investors can sometimes follow the breadcrumbs. For instance, the company earlier this year announced a campaign for the "third largest producer of premium distilled product brands, worldwide" that had recently made a $16 billion acquisition. That client is obviously alcohol giant Suntory Beam. However, when DGTL tapped into the Asia-Pacific markets earlier this year with a C$200,000 contract, it was a little more difficult to discern exactly which one of the "the largest Asian airlines" in the massive APAC market had become a client.

Regardless, these clients are at the heart of strong double-digit revenue growth for DGTL. During fiscal Q3 ended February 28, 2021, DGTL posted revenue of C$1.25 million, up 68% from the year prior quarter. That was on par with sales during Q2 (ended 11/30/20) when revenue was also C$1.25 million, up 70% from the same quarter in 2019. For the first nine months under DGTL control through February 2021, sales were up 71% year over year at C$3.67 million.

As per the earnout terms of the first acquisition, Hashoff must grow in revenues from C$3M to C$10M in order to receive 100% of the stock and cash promised its C$6M valuation, or be subject to clawbacks. The result has potential to be an extremely favorable M&A value for DGTL shareholders, which appears to be a common trend in the ongoing development of the DGTL software portfolio.

CaaS Boss

As the new kid on the block, DGTL is the unsung public company that is making a name for itself with an A-list client roster through Hashoff, a turnkey enterprise level self-service CaaS (Content-as-a-Service) provider built on proprietary AI/ML technology. DGTL planted its flag in the market in January 2020 when it acquired Hashoff for just two times annual revenue at C$4.5 million in cash and stock up front with another C$1.5 million payable only upon Hashoff meeting sales milestones.

Hashoff allows global brands to identify, optimize, engage, manage and track top-ranked digital content publishers for localized brand marketing campaigns. The company's massive database of more than 150 million freelance influencers enables customers to target precise demographics throughout the world.

It doesn't matter if a global brand is looking to sell a new seltzer to 30-somethings in the United States or a truck accessory company wants to sell mud flaps in Appalachia, Hashoff has the influencers to hit the mark. These influencers and comprehensive system to designing and quantifying ROI has attracted the likes of household brands such as DraftKings, Door Dash, Veritone, Anheuser Busch-InBev, PepsiCo., Nestle, Post Holdings, Danone and Keurig-Dr. Pepper, Ulta Beauty, Pizza Hut, Live Nation, the CW, Scribd, Novartis and more.

Social Influencer Advertising

DGTL has coined a new social media marketing category by being the first CMS of its kind to be enabled to convert social media content to web ads. This new content-to-commerce model allows social posts to be adapted quickly and efficiently to ads to disrupt the DSP banner ad market and to compete for ad dollars in the streaming movie, DOOH (digital out of home), billboard, event and sports venue signage and even the broadcast television markets.

The total addressable global digital advertising and marketing size is mind numbing to comprehend, coming in at approximately $350 billion in 2020 and forecast to rise to $786.2 billion by 2026, according to Global Industry Analysts Inc. (GIA). Analysts at GIA made astute observations in their market report, including the impact of the COVID-19 pandemic driving changes to prioritizing digital marketing strategies, even by companies that didn't previously place much emphasis on the practice.

In every facet of technology, the question always looms of "What's next?" In marketing, the next big thing could be social display ads, described by Spaceback, a platform bridging the gap between social and paid media, as "authentic recreations of social media posts configured to deliver in traditional banner placements, supporting programmatic campaign goals (awareness, prospecting, direct response)."

Hashoff, the 100% owned subsidiary of DGTL, has teamed up with Spaceback as its first certified content creator for social display ads. This partnership represents a major leap forward in the digital marketing space as the world's first social media influencer content-to-advertising platform.

DGTL – an acronym for Digital Growth Technologies and Licensing – specializes in accelerating commercialized enterprise level SaaS (software-as-a-service) companies in the sectors of content, analytics and distribution with an emphasis on using artificial intelligence (AI) and machine learning (ML) technology. The company has exponentially grown revenue for Hashoff since its acquisition last year and recently cemented its position as a leader in digital marketing with its partnership with Spaceback, a new version of Hashoff software and plans to acquire TSX-Venture listed social intelligence provider Engagement Labs.

It's All About the Customers

Given the tremendous existing market size along with the anticipated steep growth curve, companies of all different sizes are in prime positions to capitalize on the continued shift to digital advertising. It's not unimaginable that the industry continues experience consolidation through M&A as the majors in the space look increasingly for marketshare in an attempt to stay ahead of competition and the space of innovation.

IZEA Worldwide Inc. (NASDAQ: IZEA) is a Florida-based premier provider of influencer marketing technology, data and services for leading brands. At the end of August, IZEA partnered with eCommerce technology provider Multicart Solution Inc. to provide clients with sales data from their influencer marketing campaigns and optimize the consumer path to purchase. With Multicart, influencers' social media content endorsing multiple products can be accompanied by single click access to the Multicart Digital  Shelf, providing customers a seamless path to shop curated collections and a valuable conversion opportunity.

The Trade Desk (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, last month reported results for its quarter ended June 30, 2021, which showed revenue doubling year-over-year to $280 million as brands turned increasingly to its self-service, cloud-based ad platform. The Trade Desk this summer launched an internal venture capital arm, TD7, for the purpose of investing in technology innovators focused on the open internet. As part of this announcement, The Trade Desk highlighted an initial investment in Chalice, a company pioneering new approaches to algorithmic ad buying.

Acuity Ads Holdings Inc. (TSX: AT) is a leading technology company that provides marketers with a powerful and holistic solution for digital advertising across all ad formats and screens. The Toronto-based company reported C$30.3 million in revenue and C$5.4 million in adjusted EBITDA for the second quarter ended June 30, 2021. Those were increases of a 74.9% (on a constant currency basis) and 154%, respectively, from the year earlier quarter. The largest revenue generator for Acuity is illumin, its self-serve advertising automation platform, which generated C$5.2 million of the company's total revenue.

EQ Inc. (TSX.V: EQ), a leader in geospatial data and artificial-intelligence-driven software, reported revenue of C$3.0 million for the second quarter, ended June 30, 2021, up 71% from Q1 and 74% when compared to the second quarter of 2020. It was the second-best quarter in the last eight years for the company. In July EQ launched LOCUS Commute, a powerful tool that provides insightful data for the retail, insurance and advertising communities to allow business to better understand where and how people move to enable them to interact with their customers, lower acquisition costs and reduce churn.

Across the board, it is evident that leading companies are benefiting from industry growth and investing heavily in the next generation of targeted marketing. There is room for plenty of players at the moment, but the trend appears to favor those with turnkey, self-service platforms that leverage computer power to get in front of consumers with precision in the most unobtrusive way possible to build brand loyalty.

For more information about DGTL Holdings Inc. (TSX.V: DGTL) (OTCQB: DGTHF), please visit DGTL Holdings Inc.

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