Sito Carves Out Growing Role In Location: based mobile ad market

Sito Mobile

06/10/2016 19:37

By Anya George Tharakan 
    Oct 6 (Reuters) - A small U.S. advertising company is making 
waves in the tiny but rapidly growing market for personalized 
mobile advertising. 
    SITO Mobile Ltd  SITO.O  uses location-based data to target 
ads to users of more than 250,000 mobile apps, including the 
Wall Street Journal, Pandora and Major League Baseball. 
    SITO collects data including a device's ID and location as 
well as the time an app is opened and uses those details to help 
paint a picture of a user's behavior and preferences. 
    The company combines this data with other information from 
companies such as Acxiom Corp's  ACXM.O  LiveRamp that can 
provide details such as age, gender and household income on an 
anonymized basis. 
    Users can opt out of ads delivered by SITO by turning off 
location services on their device. 
    Jerry Hug, SITO's chief executive, says his company's 
revenue could increase to between $35 million and $40 million 
this year, from $19.2 million in 2015. 
    Revenue could double next year, he said. 
    Analysts, on average, expect 2016 revenue of $37.7 million, 
according to Thomson Reuters I/B/E/S. 
    SITO, based in Jersey City, New Jersey, reported net income 
of about $725,000 in the second quarter, the first profit in its 
16-year history. 
    "Consumers I think always like a deal and they are willing 
to be exposed to advertising that's relevant to who they are and 
their real world experience," Hug said in an interview when 
asked if concerns had been raised about privacy. 
    SITO, whose customers include Whole Foods  WFM.O , 
McDonald's  MCD.N  and Coca-Cola  KO.N , listed on the Nasdaq in 
August 2015. 
    The stock has risen almost 140 percent this year. At 
Thursday's price of $5.03, SITO is valued at about $100 million. 
    Location-based advertising is still a tiny part of the 
booming mobile ad business, but SITO expects the market to grow 
to about $18 billion in 2019 from about $6.8 billion last year. 
    The company says it gives advertisers access to more than 98 
percent of U.S. mobile consumers. 
    "What ... differentiates SITO is their real-time attribution 
capabilities, where the company advertising can see in real-time 
how many people were served an ad and subsequently walked 
through the store," Brian Kinstlinger, an analyst at brokerage 
Maxim Group, told Reuters. Maxim has a "buy" rating on SITO. 
    Capitalizing on SITO's growth, Hug is looking for 
acquisitions in the $10 million-$20 million enterprise-value 
range. "We have two letters of intent out ... and we have one 
that we are in earlier-stage discussions," he said. 
    SITO, which plans to expand into the UK before the end of 
the year, competes mainly with several unlisted companies, 
including xAD, Verve and PlaceIQ. 
 
 (Reporting by Anya George Tharakan in Bengaluru; Editing by Ted 
Kerr) 
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+1-646-223-8780; outside U.S. +91 80 6749 7118;; Reuters 
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Keywords: SITO MOBILE ADVERTISING/