LAS VEGAS, NV--(Marketwired - Jan 13, 2016) - KSIX Media Holdings, Inc. ("KSIX" and/or "Company") (
To the Shareholders:
I wanted to take this opportunity to introduce KSIX to our newer shareholders, as well as summarize our acquisitions and expansion plans for 2016. KSIX is a digital agency which owns and operates a group of advertising and media companies with unique distribution channels, diversified distribution networks and technology providing advertising and marketing solutions to clients for both customer acquisition and revenue generation. Advertising can be grouped into three primary categories. CPM or cost per thousand, which refers to typical television, radio or print advertisement where the media is priced based upon a rate per thousand views. This is the most traditional advertising and the most difficult for advertising to track and measure. Cost Per Click is based upon how many clicks an advertisement might generate. Cost Per Action or "CPA" advertising results in a direct consumer action that has verifiable analytics that can be provided to advertisers to know the precise returns generated from each advertising offer. The tremendous benefits generated though these analytics, as well as reporting documentation, has made digital advertising the fastest and most dynamic advertising market segment.
Given that this is new for companies utilizing traditional forms of advertising, many companies find themselves required to develop successful online campaigns and a consistent lead generation process to market their business services. As a full service digital advertising company, KSIX provides solutions for creative development, brand management, and online strategy. KSIX drives leads on a per-acquisition basis, providing a predictive model to scale campaigns on a profitable basis. This is quickly becoming the most desirable model for companies as it provides them a quantifiable return of advertising investment.
For these reasons KSIX focus is on CPA, digital advertising, and with its recent acquisition of DigitizeIQ, the Company is realizing an extraordinary expansion into Facebook marketing. In 2015, Tech Crunch published that over 30% of all US advertising were digital ads at $52.8 billion dollars. KSIX has a unique market opportunity to capture additional market share and expand product offerings and client base through the acquisition of strategic companies. What is meant by a "strategic target company acquisition" is a company that will expand core service offerings, technical knowledge, human capital, customer base and intellectual property ownership. All current acquisitions targeted are already profitable companies that will benefit from an alignment with the KSIX network of companies.
The digital advertising market has several verticals with specific expertise. KSIX began operations as an advertising network for both incentive and non-incentive offers connecting major advertisers with a broad affiliate network of content publishers providing direct access to consumers. A content publisher might be a website or online game, basically an online destination that presents media content to attract audience, where we help monetize their viewing traffic. Other areas of the digital advertising marketplace include email campaigns, mobile media, social media, and web assets. KSIX targets acquisitions that increase product offerings into additional market verticals. With each new acquisition KSIX will be able to market existing products to a new customer base and in turn market new products to the Company's existing customer base. This provides a significant increase in revenue opportunity with each new acquisition for both the acquired company as well as the entire KSIX media group. To summarize new acquisition goals, the Company gains from an economy of scale on operations, saving on expenses and increasing margin while also generating an increase in top line revenue from cross marketing products and services. Most target acquisitions have sales in the $3.0 to $7.0 million range with a 12% to 18% profit margin. KSIX is finding many opportunities within already profitable companies that have reached a plateau and do not have the knowledge or ability to grow to the next level. These become ideal acquisitions for KSIX. Whereby these "orphan" companies gain operational benefits from being part of a diversified group, this also increases KSIX critical mass of direct consumer traffic and database. With a larger consumer base, the Company is able to obtain higher quality advertising offers that typically have a more significant profit margin.
We were extremely excited to report completing our first acquisition in the 4th quarter of 2015, DigitizeIQ. DigitizeIQ focuses on social media advertising with proprietary intellectual property and direct contracts with Facebook. Their focus is currently on mass tort lead generation, which opens a whole new market up for KSIX. In addition, the proprietary Facebook marketing assets can be utilized in additional verticals and for existing and new KSIX clients. The technology acquired provides a competitive advantage in Facebook advertising that can be leveraged into several additional markets. DigitizeIQ had revenues of over $5.0 million annually. The DigitizeIQ acquisition is projected to grow the Company's gross revenue by over 300% in 2016 from the 2015 gross, so this is a very significant acquisition for the Company. With the acquisition and consolidation of operations we also expect to see over a 10% savings in operating expenses as well as increased sales utilizing the existing KSIX sales force to market services to direct advertisers. The goal will be to stabilize DigitizeIQ gross revenue at over $1.0 million per month in the mass tort vertical and then expand into additional client bases such as healthcare, insurance, and financial services. We believe that DigitizeIQ is a perfect addition to our portfolio and it will increase shareholders value.
Through strategic acquisitions KSIX will seek to cover each unique vertical in online and mobile advertising. Target companies will have well-positioned niche markets with strong revenues and operational models that leverage the power existing KSIX affiliate marketing and targeted advertising online. Companies on our radar are digital ad revenue generated businesses looking for an exit strategy and resources so they can focus on their core competencies while being part of a bigger organization in a fast-growing niche market space. We are currently evaluating several additional acquisitions with the goal of completing 2-3 additional acquisitions in 2016, bringing gross revenues to over $20 to $25 million by year end.
This is an extremely exciting time for KSIX and our shareholders.
Carter Matzinger, CEO
KSIX Media Holdings, Inc.
ABOUT KSIX MEDIA HOLDINGS
KSIX Media Holdings, Inc. (
KSIX, LLC is an advertising network designed to create revenue streams for their affiliates and to provide advertisers with increased measurable audience. KSIX provides performance-based marketing solutions to drive traffic and conversions within a Cost-Per-Action ("CPA") business model. KSIX has an online advertising network that works directly with advertisers and other networks to promote advertiser campaigns. KSIX manages offer tracking, reporting and distribution on the third-party platform.
BMG Media Group, LLC provides the tools for web publishers to drive traffic and increase revenue. BMG's mission is to monetize the Internet, promoting incentive-based advertisements resulting in more clicks, greater lead generation, and increased revenues.
DigitizeIQ is one of the largest agencies for social media marketing in the Tort Law industry. Utilizing proprietary software, DigitizeIQ can provide high-volume and high-quality leads for tort law firms with 100% of the leads being generated internally. From small start-ups to multi-million dollar corporations, DigitizeIQ creates multi-channel marketing campaigns specific to each company's advertising needs.