Editor’s note: Adweek worked with Matthew Scott Goldstein, a consultant with a deep knowledge of the media industry, to craft his quarterly newsletter into an Adweek article. Through his findings on various industry earnings calls, we’re bringing you insights about how your favorite brands, agencies, media companies, publishers and tech companies are performing on a quarterly basis. His goal was to go past what the trades were focusing on, which mostly revolved around revenue, and tap into the nitty-gritty data shared on these calls.
This iteration focuses specifically on ad tech and platforms in the 2019 second quarter.
- The Trade Desk: Revenue of $160 million, up 42% year-over-year. In 2019, according to IDC, global advertising spend will be about $725 billion, up over 4% from 2018. At current growth rates, global advertising will be a trillion-dollar industry in about seven years, one of only a handful of industries with a TAM over that mark. Programmatic is still a relatively small part of total global advertising. It is estimated at around $34 billion in 2019, but it is growing five times faster than total advertising at around 20% year-over-year according to Magna Global. Growth rate is 10 times the pace of overall advertising growth, and, in fact, growth is nearly four times the growth rate of digital. The digitization of advertising, particularly TV, is massive. The shift to data-driven decisioning versus guessing or intuition is game changing. These changes in the landscape significantly benefit TTD. The Trade Desk signed 55 new MSAs, representing some of the largest brands on the planet. This is the highest number of new MSAs signed in one quarter since the end of 2016. Through the first half of the year, 60% of the Fortune 500 companies are now running advertising through The Trade Desk, and 47% percent of spend on the platform was in mobile; that’s a new record. Mobile video spend growth was about 50%. Mobile in-app spend growth was 63%. Data spend again was up 80%, and cross-device spend was up over 250% for the third quarter in a row. Audio, probably the best value in programmatic today, grew almost three times in the second quarter, for the second quarter in a row. Connected TV spend growth was also amazing, growing nearly three times from a year ago. Likely never see a channel larger and more full of opportunity than we have right now in CTV. Much of what TTD has done over the last decade has simply been a dress rehearsal for the digital shift happening in TV right now. Driving towards $1 trillion total advertising market by 2027, and about half of that market will be in some form of video; most of that will be in premium TVs. We’re at the very beginning of the digitization of TV advertising. More and more consumers watch TV content through connected devices. Amazon Publisher Services is working with The Trade Desk. This is a breakthrough deal in connected TV. Amazon’s third-party content providers—think Discovery, NBC and ESPN apps on your Amazon Fire. This is quality inventory on premium content. Hershey has consolidated much of its programmatic advertising on TTD. They have gone from several DSPs down to just one, which gives them simpler line-of-sight into the effectiveness of their programmatic campaigns. Developed, and then gave away TTD Unified ID solution. Major initiative on the supply side has been the partnership with White Ops to scrub all ad inventory for fraud. Now scrub all inventory before it ever comes to the buy side. They reduced their rates and TTD significantly increased volume by insisting all TTD suppliers work with them. Focus is on advertisers and agencies, with commitment to the open internet and everything that means in terms of transparency.
- Criteo: Revenue of $528 million, up 1% year-over-year. Retargeting business saw a low single-digit decline. Added 360 new clients, reached highest level since the second quarter of 2018. New products leverage the user graph of 2 billion Criteo IDs. The user graph links highly granular shopping data with robust, persistent IDs across multiple devices and user environments. Retail clients are looking for a turnkey platform that combines both performance and branding. The market is demanding full transparency, both in terms of pricing and inventory. Retailers still don’t invest in their own apps to fully capture the growing smartphone usage. There are 3,800 publishers using Criteo Direct Bidder on web inventory. Now directly connected to 200 app publishers, about 50% more than in the first quarter. Working hard to implement self-service capabilities. Self-registration feature for new clients is now live. Self-registration is a must-have to further scale the addition of new small and medium clients. Completely new executive team, with the exception of the CFO. For Google Chrome, there is no material impact that Google has done in the previous few weeks, no impact on the business. Started with the exchanges now making progress buying directly from the mobile app publishers. Seeing a slight decrease in average CPM over the period, which is consistent with prior periods. Taking a more consultative approach in the sales process and hiring app specialists. Still very early in the upper funnel, awareness and consideration product at Criteo. Privacy is a major trend in the market and a very good one—Criteo is supportive of having an open internet which is privacy friendly, because ultimately if you want to do targeted advertising you need to do it in a transparent way; otherwise the users lose trust. Internet works best seeing ads you’d rather see, versus ads that are just visual pollution. Pay for the inventory no matter what and get paid only when the users engage with the ad.
- Rubicon: Reported $38 million in revenue, up 32% year-over-year. Mobile revenue grew 42% and desktop revenue grew 21%. Increase came from stabilization in CPM trends, greater than expected strength in audio and video and favorable year-over-year take rate comps. Supply path optimization, or SPO, also continues to pick up momentum in the industry. Video inventory remains in extremely high demand. Prebid’s video capabilities continue to expand, which will increasingly provide access to more inventory and drive additional video growth. Demand Manager is built on Prebid as opposed to publishers running Prebid alone. Most publishers prefer to share media revenue for Demand Manager, also open to SAS fee for Demand Manager. CPMs fluctuate as buyers and sellers adjust algorithms, a big cat-and-mouse game. Rubicon will not see positive or negative impact from Google’s unified auction. Previously said take rate around mid-13%. Not one of the big holding companies is looking to give Google more money. Traditional digital video is still very complex—desktop video, web, mobile app video and mobile web video. With CTV/internet TV, the new flavor of video has a whole new set of complications like Pods, creative separation etc.
- Telaria: Revenue of $18.2 million, up 47% year-over-year. CTV was once again the biggest driver of revenue growth. Continuing to expand platform relationships with leading premium publishers. CTV revenue increased 133% year-over-year to $7.1 million and composed 39% of revenue. This is up from 24% of total revenue just a year ago, helping increase platform CPM to $15.41 compared to $11.60 in the prior year period. Working with OTT services such as Disney’s Hulu with 58 million ad-supported dealers, Viacom’s Pluto TV with 16 million active users and independents like Tubi TV which recently announced 20 million active users. Notable new partners signed in the U.S. included MLB.tv, Fox News, ABC News and Sinclair’s NewsON, which includes 170 local TV stations covering 83% of the U.S. population. SpotX and FreeWheel are the companies run into the most.