Hello, everyone, and thank you for attending H.C. Wainwright's 26th Annual Investment Conference. My name is Mason, and it is my pleasure to introduce Barry from Inuvo.
Hey, everyone, I'm Barry Lowenthal from Inuvo, President. That is my AI picture. It's great. Lens AI. Say what? Right? Thank you, thank you. It's great. Lens AI. Upload 10 selfies, you can get 50 images. I am gonna give you an overview of the company, talk to you about some opportunities that we see ahead, and review some of the technology that we have.
This is our safe harbor statement. Okay, so at Inuvo, we have a very bold mission. We want to use artificial intelligence to transform the way programmatic media is bought, and by doing that, we wanna be able to read huge amounts of information, which will allow us to provide a lot more precise targeting in a cookie-free future. That is what our intention is. We have a large language model that reads the open web.
We organize that information into a concept graph, looking for patterns and trends, and we turn that information into models. That is what we do. We build models. There are four ways that we activate these models. This is our process. We create concept graphs, we build models, we match concepts, brand concepts with media concepts, which then inform what media impressions we bid on in programmatic media platforms called DSPs. Any questions so far? You're tracking?
Yeah.
Okay. Here are some examples of our models. We can reach millions of advertising impressions and reach millions of unique users using our models. We can create custom models for every brand, every client, every marketing strategy, whether it's awareness, acquisition, ROI, conversion, whatever that is. We can build them out for specific categories like EV cars or luxury travel.
We can also do them for promotional events, whether that's back to school. We just last week released several models for the fall, Halloween, and Thanksgiving. None of our clients are going to use these models just off the shelf. All of them are gonna want us to customize them for them, but we do make all of these models available in the Curate Marketplace for anybody who wants them, and there already are hundreds of models out there that we've published.
There's some real advantages that our clients talk to us about, when they work with us. The first is they like the fact that we provide them solutions for signal loss. Signal loss is a real issue. Clients are suffering from cookie deprecation, from privacy regulation, both globally and domestically, and increased domestic privacy regulations are expected. We see around those corners. Our models also refresh every five minutes, so they reflect what's going on at any one time in the market. It's not as if those models have to be refreshed after days and days and days. They refresh every five minutes. They are very, very cost-efficient because we don't rely on any third-party data. We don't rely on any cookies. We don't rely on any third-party data.
You don't have to buy anything more to work with us, and they work with every single DSP, so they are DSP-agnostic, whether it's DV360, Microsoft, The Trade Desk, and so on and so forth. We access 100% of the open web. We have 25 patents, six of which are pending, which really protects our product, which is the IntentKey. There are two ways to activate our models. We can either do it for you using managed services, where we buy the media for you. The other way is through self-service, where we give you some instructions, and a client would go out there and activate them themselves. The self-service product is a fairly new product. It's been out in the market for four months, and we're already seeing a lot of traction for that product.
We operate in an enormous business. There are three primary ways of buying digital media. There's search, social, and programmatic. We operate on the programmatic side, and that's a $250 billion business. We don't have a high penetration into that marketplace right now. In fact, we have pretty low penetration, which we see as a real opportunity. There are about 16,000 mid-size agencies in the U.S. We have penetrated less than 1% of that. That's the audience for our managed services product. For self-service, we're talking about the six primary holding companies, and they represent almost 80% of all media buying done in the U.S. 70% of their digital media is bought digitally. 50% of that is bought programmatically.
That's the piece that we're going after. We've been investing in our go-to-market team, so in hiring more salespeople, hiring more marketing people, client success people, reorganizing how those teams are structured. So we've been making a lot of improvements around our go-to-market team, and the press is taking notice. We've already had 35 press mentions this year. We have a whole bunch of thought leadership articles in the pipeline, so we're really excited about the attention that these changes are bringing to the business.
We've worked with many, many blue-chip clients. I'm sure many of the, these names you're aware of, across every single vertical, and very, very importantly, when our clients put us up head-to-head against our competition, we beat performance over 67% of the time, which is why so many of these clients are coming back time and time again. We have over 90% renewal rates on our business. This is the, the growth that we've been delivering. We have compounded quarterly growth of 5.5% since Q2 of 2022. We have about $2.4 million in cash, no debt, and we have a $10 million borrowing facility, so we have a really healthy balance sheet, so we are operating in a business that is enormous, that is, being disrupted by, cookie deprecation, privacy regulation. Clients are suffering from signal loss.
We have a solution that looks around those corners and can support them, so that they don't have that signal loss. We have a product that delivers great performance, great renewals. We have growth. We have two products now. The self-service is the newest one, and that one is already doing gangbusters. And we're channel agnostic, which means that we can support every single digital media channel that's available to us programmatically, whether it's display, native, OTT, CTV, and so on. That's Inuvo. Happy to answer any questions. Thank you.
For your clients, how do you typically bill them as far as revenue recognition? Is that project-based, or is it recurring revenue, or is it a combination?
It's IO- based. Yeah, so they'll contract us, give us an IO, we'll go out there, buy the media if it's managed services. If it's self-service, we don't know how much they're spending against the models until after they spend it.
Do you go out to the different exchanges for your exchange or?
No, we don't operate. When we're buying the media, we'll go out to the exchanges to do that. That would be for managed services. For the self-service product, clients can do wherever they wanna go. We just give them the Deal ID, we give them the instructions, and they activate those models wherever they want.
You have 25 patents or patented?
We have 19 patents. We have six that are still pending. Six additional that are still pending.
Do you have any third-party validation?
I don't know.
Yeah, like LOP or something.
Are they worldwide patents?
No, they're U.S. and Canada.
U.S. and Canada.
How does the AI feature work? Do you have, like, a demo or something, like?
Not here, but what you could do is, if you go onto our website, there's a button called the Audience Discovery Portal. You can click on that, and you can see the way the models are built. You can pick which concepts you want, and you can see in real time how many impressions would be available for those models to be activated against, and the demographic profile of the people that we could be reaching using that model.
Okay.
Yeah, and that's. You can go on, anybody can do that.
The AI helps you as this landscape changes, that AI, like, ahead of that, you know, as far as new regulations?
Yeah. So the AI is reading the Open Web, so t he information is available to everybody. We organize that information using our concept graph. We don't require any other information, so we don't require, we don't need cookies, we don't need your data. We don't need any other data to identify intent. So all of the issues that you're talking about are. It doesn't impact us.
Yeah.
Okay. Thank you. You what?
I said, I'd talk after you.
Okay, and if you have any customers you want me to talk to, I'm happy to do that.
The growth opportunity that you've seen in self-serve?
Yeah. So it's too soon to know exactly what that number is gonna look like and how it's gonna change our revenue mix from managed to self, but I will tell you that we're talking to really big customers who wouldn't talk to us before, which is really exciting. So a giant computer manufacturer is already starting to test us. We have a couple of automotive manufacturers that are testing us right now, and these companies were not interested in what we had to say before.
What are the margins for self-serve?
Higher than managed, but I'm not gonna tell you what those numbers are exactly.
The managed-
But thank you for asking.
Managed is 85%.
That's total Inuvo, yeah. Yeah, but the self-serve is a much more profitable business, for a couple of reasons. It just doesn't require really any people, right? It's a fairly automated business. Yes?
Yes. You know, from the worldwide web or the information, that's all open source information out there, you know, when AI comes and gets involved with things, sometimes AI is making a digital twin, guessing what to do. So AI is not using that real data, they're using that open source data that's a little difficult to pinpoint how to really target that opportunity or what it could be, because that data, as that AI starts to make that new you.
Mm-hmm.
So if you're not gonna need people's data with AI, y ou're just gonna, you're gonna try to put more than predict what they're gonna do. You're gonna tell them.
So we're not using an individual's data. I don't know anything about you as an individual.
Yes, yes, but you're using the open source, but they have that on the, the web. They have the information about you, whether right, wrong, or different, or anything else, is what I'm just trying to say. So how do you navigate around that?
Yeah, so within the Concept Graph. So a concept is a unit of knowledge.
I see that.
As we identify, as we define it, a concept is a unit of knowledge. Every brand is a concept. Every brand is connected to, you know, millions of other concepts. Some of those relationships are stronger or weaker. The stronger the relationship is, the more important it is for us in making buying decisions. Every brand is also connected to a whole slew of media concepts. Those media concepts are the ones specifically that we're buying. So I don't know how to address your observation directly. All I can do is tell you how our product is working.
Yeah, I get it. I get it.
Right.
So-
Okay. Any other questions? I have six minutes and 43 seconds left. I wouldn't mind getting a coffee.
Yes. Self-serve, I assume, but how are you growing that market? Is that something where you guys have to invest more advertising dollars?
Um-
Is that something that you need to-
You know, so that's a really good question. So we brought on a self-service seller to go after those holding companies, and all the agencies that fall underneath that holding company. Because we wanted somebody focused just on that group, because our managed services sales team wasn't going after them, wasn't going after them originally and didn't really have those relationships. When we launched this product, what we started to find was that our managed services team wanted to introduce their clients to that product because they wanted to be able to offer them more services. If they felt like they were gonna lose a managed services deal, they would say, "Hey, we can also support you with self-service." So now we have even more sellers going after the self-serve business.
So, I haven't had to hire anybody beyond that one person yet. I hope that as we get more information about that product, as the rest of the year progresses, that we hire more people against the self-serve business.
Even if you're hiring, do you assume you'll have to spend more as far as just dollars for that?
Well, we've gotten a lot faster at firing, so if they're not delivering revenue to pay for themselves, we get rid of them pretty quickly. So now our window is about six months. If we don't see enough traction, then they're gone.
There's a cannibalization risk to some extent.
You know, it hasn't been so far because we've been limiting. So we don't allow the managed services team to go after those larger holding companies, so there hasn't been that kind of cannibalization. What we've had to do, though, is offer up splits. So if people were making introductions to people outside of their territory, or if the self-serve guy was able to identify a managed services opportunity at the holding company level, then they had to flip that to somebody else, but then they'd share in a split. Yeah. It's created a really interesting challenge around managing, you know, just boundaries and territories, which I think is a really good problem.
The more problems we have like that, that means the more revenue we have, the more leads we're getting, so I'm happy to deal with those kinds of problems. Yeah. Did you want to ask another question?
[audio distortion]
Go for it. I like your questions.
No, it's kind of a little bit toward address. You know, it's more of like an educational process on the self-serve, which he asked over there about the self-serve. It's like going through the grocery store and using the automatic checkout.
Yeah.
It takes a while for people to trust and adapt to it and everything else. But you have a simple educational program that's right on the demo. You know, everybody goes to YouTube for things, so if you have your own little process on that-
Yeah. So we've created.
Is there like a click-through? Is there a [audio distortion]. Tell me just a little bit about-
So there's a great tool that we use. It's called Synthesia.ai. It's text to video, and we have created dozens of videos that live on our website for FAQs, so frequently asked questions, that kind of walk people through the process. It's amazing how easy it is to create those videos and how many we've been able to build out to answer those kinds of questions.
[Bob Vila.]
Exactly. Exactly. All right, well, thank you very much. Mason, you wanna close me out?
Great, thank you for that presentation. Everyone, I'd like to thank you guys again for attending H.C. Wainwright's 26th Annual Investment Conference. Hope everyone has a great rest of the day, and look forward to seeing you.
Thank you.