Just over a year into the job, it seems that Snakk Media’s new chief executive Mark Ryan already has a lot to smile about.
The company’s preliminary financial results released last week showed a 92 percent year-on-year increase, shifting up from $3.6 million recorded between March 2012 and March 2013 to $7 million in the most recent results.
The company’s year also ended strongly, with fourth quarter revenues from January to March 2014 increasing 78 percent from the previous year’s quarter to $1.75 million.
Add to this the fact that the company has just announced plans to open a Singapore office in addition to those in Australia and New Zealand, and it seems that things are going very well in the world of mobile advertising.
But this isn’t necessarily the case. Revenue doesn’t automatically translate into profit, and this means that Snakk Media is still operating at a loss four years since Derek Handley and Andrew Jacobs first founded it 2010.
The net loss after tax for the year ending March 2014 is $1.8m, with $481,731 representing a non-cash expensing of staff options. And although the figure marks a 58 percent year-on-year increase in losses, Ryan says he sees positives in the results.
He explains that Snakk is investing heavily in new technology and cites this as the principal reason why the company continues to operate at a loss despite the high revenue figures.
“Our losses are slowing down, while our revenue continues to grow,” says the chief executive, who took up his post in April last year. “From day one, we’ve been saying that this a long-term play, in which we aim to grow the business by capitalising on the increase in mobile ad spend.”
Interestingly, the growth of Snakk Media's revenue over the last year does seem to correlate with the mobile ad spend, which shot up by 122 percent year on year in the IAB’s first quarter figures and now contributes 1.8 percent of overall ad spend (up from 0.9 percent last year).
While these numbers seem impressive, outgoing IAB chief executive Alisa Higgins says that they still lag behind Australian mobile ad spend, which enjoyed year-on-year growth of 300 percent.
Given that Snakk operates across both markets (85 percent of its revenue is generated in Australia), these figures do seem to bode well for the future of the company. But despite this promise of growth, the market responded poorly when the financial year-end results were made public.
In the days following the announcement, shares in the company fell from 10.9c to 9.6c. However, Ryan remains unperturbed.
“If I worried about the share price every day, I wouldn’t be able to do my job,” he says. “We aren’t just trying to follow the market; we’re trying to define our industry and play a role in where it goes.”
He says that he often advises his co-employees to take an interest in what the share market is doing, but also to remember that the company is in it for the long haul.
And for Snakk, this has wider implications than just the Kiwi and Australian markets.
The company recently appointed Michael Gooch to lead its South East Asian operations from the new Singapore office. And, having previously helped Catcha Digital Asia expand into Singapore in 2010, Gooch will return to familiar territory after a stint at OPT in Japan.
Snakk Group CEO Mark Ryan says Singapore was chosen as the company’s first Asian headquarters because it is a significant decision gateway for the region, with a heavy concentration of global and regional media agencies and brands.
He says that the South East Asian market is burgeoning with millions of mobile users and that Singapore serves as the ideal launch pad from which to enter these markets.
“When you look at a place like Indonesia, there are 52 million active mobile users. In Malaysia there are 13 million. In Vietnam there are 17 million. All these countries have more mobile users than Australia and New Zealand combined,” he says. “Centring our operation in Asia’s regional hub makes sense as the majority of decisions made in Singapore directly influence other markets.”
Ryan also says that he is keeping an eye on the American market by sending strategic and product development staff to the States to look at what innovations are being introduced. And this has led to Snakk penning strategic partnerships with Moasis Global and Plyfe, a pair of US-based companies that specialise in mobile advertising.
“We’ve also continued to invest significant resources into building our portfolio of best-of-breed smart screen advertising technologies, particularly those that target specific geographic locations and use audience data to reach the right people at the right time,” says Ryan.
And despite Snakk’s commercial relationship with the United States, Ryan says that he has no plans to open additional offices in the country at this stage.
“I’ve said this in the media a few times. We’re just street fighting on this side of the world. When you enter the American market, it becomes a case of Game of Thrones, where you have massive corporations and everything is already commoditised. For now, we’re happy scrapping it out.”