Entertainment

If a group of people was asked to name the publishing outlet that commands the biggest Facebook page (as defined by the largest number of individual members), chances are companies like BBC or Mashable would be top of the list. Narrow it down to sports media outlets and ESPN would be a top contender. Very few people, if anyone, would return an answer of GiveMeSport. With more than 24 million followers, however, and more than 26 million likes (as of late July 2017) the publisher outperforms all of the above-mentioned household names. For reference, ESPN has the next largest single sports publisher Facebook page with 17 million members.

Why is this important?

Facebook is quickly becoming one of the largest and most prominent news aggregators in the world. The social media platform is an integral part of any content publisher’s arsenal and its dominance in the content serving and sharing space is only expected to grow over the coming decade.

Companies are rushing to figure out how to take advantage of this trend and are having varying degrees of success to this aim. The above mentioned Mashable has created its own technology, called Velocity, that helps it to predict which stories are likely to go viral and when and, in doing so, allows it to capitalize on this early stage information.

Other companies haven’t had as much luck.

The ever changing algorithms that underpin Facebook’s content delivery platform make it difficult to find a sweet spot and even more difficult to maintain it.

So how has GiveMeSport managed to amass such a large following?

The answer is rooted in the company that’s behind the outlet – BREAKING DATA CORP COM NPV (OTCMKTS:BKDCF) (BKD.V) (CVE:BKD). Breaking Data acquired GiveMeSport back in December 2016 and has spent the last six months incorporating its proprietary artificial intelligence (AI) technology into the media outlet’s day to day activity. With this acquisition, not only has Breaking Data given GiveMeSport a considerable technological advantage over its peers, it’s also served to offer public markets an exposure to the outlet’s success (which is what drew the attention of our analysts).

Breaking Data acquired GiveMeSport back in December 2016 and has spent the last six months incorporating its proprietary artificial intelligence (AI) technology into the media outlet’s day to day activity. With this acquisition, not only has Breaking Data given GiveMeSport a considerable technological advantage over its peers, it’s also served to offer public markets an exposure to the outlet’s success (which is what drew the attention of our analysts).

By way of a quick introduction to GiveMeSport and for those not familiar with the platform, it’s a news and entertainment outlet that – as implied by its name – focuses on serving sports related content to its users. The platform is fronted by a website, www.givemesport.com, and traffic is directed to the site through various social channels, including the above mentioned Facebook page.

While this is a website at core, the key thing to recognize here is that Facebook is the real growth driver for the outlet. Its founders are ex-Facebook strategists for various sports stars in the sports and entertainment space and the experience drawn from this side of the operation is what feeds into the company’s success i its Facebook endeavors today.

The way it works is as follows: Breaking Data and GiveMeSport have developed an AI technology that is able to track changes in Facebook’s content algorithm (not directly, but through the impact of the changes on the way the platform’s users interact with GiveMeSport’s content). When it detects changes, it automatically suggests strategic alterations that not only limit the impact of changes on the company’s content’s reach, but also seek to capitalize on it.

This AI approach is what sets GiveMeSport and Breaking Data aside from other publishers in this space. Whereas another publisher may take a 30% hit to its traffic on the back of a Facebook algorithm change and not be able to recover from the hit, GiveMeSport’s AI technology detects the change, mitigates its impact and alters the company’s strategy to try and take advantage of what is ultimately hurting its competitors.

All this is great but it means nothing to an investor in Breaking Data if it doesn’t translate to revenue – so how does Breaking Data generate sales on the traffic it’s attracting through its GiveMeSport platform?

Just as is the case with the vast majority of internet publishers, the answer is through online advertising.

With 32 million monthly visitors (this is a six month old metric but it’s the best we have available, chances are the figure is higher now) GiveMeSport has a very large audience to which it can serve advertisements of all shapes and sizes. Additionally, with a sporting focus, this audience is not only very large, it’s also very diverse. NFL, NHL and NBA fans comprise a large portion of the site’s users and each of these offers a different demographic and user type to the advertisers that want to gain exposure to a potential sales base through the platform.

To date, some of the biggest names in the world have advertised through the GiveMeSport platform, including Mercedes Benz, Bayerische Motoren Werke AG (ETR:BMW), American Express Company (NYSE:AXP) and Electronic Arts Inc. (NASDAQ:EA). These are billion dollar companies achieving quantifiable results through a relationship with GiveMeSport and, by proxy, Breaking Data.

So what’s next?

As per the latest available numbers, Breaking Data generated $1.08 million revenues for the twelve months to January 31, 2017. At that time, however, the GiveMeSport acquisition was less than one month old and the outlet’s advertising revenues were not included in the statement. As such, the next major catalyst for this stock is the reporting of financials (presumably, first quarter, but management hasn’t confirmed when it will start to include GiveMeSport in its audited numbers) that offer insight into just how much of a difference the acquisition makes to Breaking Data’s top and bottom lines.

Beyond that, the outcome of a recently announced marketing strategy that sees the company team up with NFL UK to develop an original content series themed around attempts at Guinness World Records is very much on the catalyst radar.

If this collaboration materializes as expected, it could expand the company’s reach to a television audience and – in turn – could dramatically increase its potential to command premium rates from advertisers looking to gain exposure to its userbase.

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