Poynt Corporation (TSX-V: PYN.V), a global leader in the mobile local advertising space, sank to a 52-week low of 0.060 on Thursday with investors continuing to show concern following the uncertainty surrounding Research in Motion and their Blackberry products. PYN.V opened Thursday’s trading session at 0.080 but quickly tumbled on heavy activity before closing the day at 0.070 on volume that exceeded 3.6 million, more than four times their 100-day average.
The slide came despite PYN.V announcing on Thursday the expansion of their advertising products with the introduction of Brandscape, a persistent page takeover within search verticals of the Poynt Platform. This Brandscape sponsorship will provide advertisers, according to the press release “100 percent Share of Voice within the search vertical of their choice – gas prices, businesses, movies, events, people and restaurants.”
With this method of advertising PYN.V says brands will “get in front of users in a timely way when they are looking for relevant information.” While advertisers may favor a persistent page takeover rather than a traditional mobile banner advertising campaign at issue could be how well it is received by the users of all-in-one location-based mobile local search application offered by Poynt.
Obviously PYN.V needs to attract the advertisers and by offering them the ability to monopolize a relevant search vertical through Brandscape they should have no problem appeasing that crowd yet the users who rely on Poynt when searching for local offers, businesses, events, restaurants, movie theaters, gas prices and weather information may not respond so kindly to the persistent page takeovers.
PYN.V has done an impressive job in building up their unique users, pushing the total past 16 million and these users perform more than 70 million local searches monthly on all major smartphone and tablet platforms in nine countries. Users are critical to PYN.V’s success and with more users performing more searches the company can serve up more ads and generate more revenue, it’s a pretty simple equation yet it requires a delicate balance.
Advertisers are only going to advertise where there are consumers and consumers are only going to go where they feel comfortable and believe they are getting what they desire. If at any time PYN.V begins to see their user growth slow then the advertisers will quickly jump ship and market their brands elsewhere. There are a number of issues that could influence a user to search elsewhere and something like having to deal with a persistent page takeover from an advertiser may be one.
As it stands Poynt is available on Android, iPhone, Windows Phone and Nokia devices, along with BlackBerry smartphones and BlackBerry PlayBook Tablets in Canada, the United States, Europe, India and Australia. The company is also moving forward with a joint venture with the People’s Republic of China’s China Youth Goyor Technology (Beijing) Co., Ltd. to expand the Poynt Platform into China, a move that could significantly boost their user base.
The move into China could be what defines PYN.V as they have invested a considerable amount of capital in this joint venture and during the first quarter 2012 that joint venture produced an initial version of the Poynt China app made available for download for Android devices with intentions to develop launch and monetization plans for the Poynt China platform in the near future.
Just how big is China for PYN.V? In the company’s 2011 year-end financial report they noted, “Through both geographic expansion and new preload agreements, our position in the mobile application space is strengthening. We expect to exceed 40 million users by the end of 2012, including 20 million new users from our China Joint Venture.” To say that China is critical may be an understatement.
Aside from balancing the wants of advertisers and the expectations of their users PYN.V is also facing the difficult task of fending off competition. Local mobile advertising is a booming business and it includes a number of heavyweights with more jumping in on a regular basis. Perhaps PYN.V becomes an attractive acquisition to one of these better financed companies or they find the right formula on their own to become profitable, one thing is for sure, investors should have a pretty good idea about what direction the company is heading in the next few months.