Essential First-Quarter Stats for Ad Tech and Platforms - Adweek - 25 minutes read

Essential First-Quarter Stats for Ad Tech and Platforms – Adweek

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 first quarter.  Brightcove: Delivered first-quarter revenue of $41.8 million, up 2% year-over-year. Renewal rates remain strong in the first quarter at 95%. From an innovation standpoint, making excellent progress on the product road map developed in conjunction with the market analysis, including OTT. Thrilled with the feedback from customers who’ve seen the preview of the road map. A new sense of urgency, ownership and accountability across the entire sales organization, while ensuring the sales team is aligned with marketing to drive improved business performance. Excited to close the acquisition of Ooyala’s online video platform business on April 1, which affirms leadership in the online video industry. The OTT business is a growing and vibrant market; Brightcove intends to be the market leader. Customer count at the end of the first quarter was 3,696, of which 2,227 were classified as premium customers. Annualized revenue per premium customer was $78,000, which was up 4% year-over-year. Demand for OTT is very solid. Criteo: Revenue grew 3% to $558 million year-over-year. Grew the number of clients by 5% to over 19,000, while maintaining a retention rate at close to 90% for all solutions combined. Increased focus on higher-value midmarket clients until launching self-registration onboarding module. This resulted in a lower client addition in the quarter. Revenue ex-TAC grew 8% in the U.S. To accelerate the sales growth of new product, focusing on three initiatives: adapting the sales and operations organization, bringing new sales specialists on board and doubling down on training client-facing teams. In parallel, adjusting hiring process to more effectively scale up sales capabilities for upper-funnel products. Ability to bid the optimal price for each impression has always been one of Criteo’s distinctive strengths recognized by the industry. Pleased to have further improved the performance of the critically important first-price bidder in the first quarter. Given the intense scrutiny Google faces from antitrust authorities globally, Criteo believes it is unlikely Google would take advantage of Chrome’s dominant position in the browser market to restrict the ability of other digital players to compete. Rubicon: Revenue was $32.4 million for the first quarter of 2019, up 30% year-over-year. Second quarter 2019 year-over-year revenue expected to grow approximately 20-25%. Mobile revenue grew 63% in the first quarter of 2019, year over year, and represented 53% of total revenue Desktop revenue grew 6% in the first quarter of 2019, year over year. Video revenue nearly doubled in the first quarter, year over year. Video continues to be the most sought-after inventory type by buyers, and sellers are struggling to meet demand. SPO also continues to be a driver of industry ad-spend consolidation in 2019. Mentioned several quarters ago that Rubicon began to see some industrywide pressure on CPMs because of increased supply and buying pricing tools. On Sizmek, some bad debt expense related to that, but not material. For the most part, able to claw back those kinds of exposures from publishers, so exposure is somewhat limited. Co-founded, a community that was then in the early stages of building an open-source framework for header bidding. Now, prebid technology has become the independent standard used by hundreds of the world’s largest sellers. The trend towards increased privacy control and reduction of cookies in the industry continues. I’m a big supporter of this trend and believe this ultimately drives a healthier overall marketplace in more educated users. During the quarter, publicly announced a collaboration with The Trade Desk on its universal ID. Continue to work with the DigiTrust solution and live with LiveRamp’s solution soon. Believe these tools will help significantly reduce reliance on cookies and are an important step in the eventual move to a targeted and efficient server-side cookie-less world. Telaria: It was a strong quarter with revenue of $13.6 million, up 42% year-over-year. Success in both increasing advertiser demand for CTV avails and expanding the supply of CTV that’s available programmatically via the Telaria platform. CTV revenue continues to grow in both absolute dollars and as a percent of total revenue. CTV revenue for the quarter increased 169% year-over-year to $5.2 million. It accounts for 38% of total revenue, which is up from 33% of total revenue in the fourth quarter of 2018. For publishers, Telaria continues to pursue auction-optimization technologies, an unconflicted business strategy that made it easy for them to comfortably shift the sale of more of their premium inventory to programmatic channels. CTV CPMs are significantly higher than those in desktop or mobile. CTV growth drove platform ECPM to $12.78, compared to $11.60 in the prior-year period. MAGNA Global recently updated their 2018 U.S. OTT advertising spend estimate by 35% to $2.7 billion, which represents a 54% increase from 2017. MAGNA also projects that this segment will grow to over $5 billion by the end of 2020, a 41% CAGR from 2017. Over the same period, eMarketer estimates that ad spend on linear TV will remain flat at around $71 billion, reflecting the continuing shift to more addressable video. The Trade Desk: For the quarter, revenue was $121 million, up 41% from a year ago. In 2019, according to IDC, spending on global advertising 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. The industry is evolving; advertisers are migrating from other platforms to The Trade Desk. Continued to add new advertisers and agencies to the platform, and existing customers increased their spend. In the first quarter, The Trade Desk continued to develop closer relationships with the biggest brands in the world. Over half of the companies in the S&P 500 have run campaigns on the platform, executing well. Spend growth came in channels key to business, such as mobile, video, connected TV and Audio. Data spend again grew about two times the business. Continued to invest in technology infrastructure, product development and international expansion. Total mobile (in-app, video and web) was 45% of gross spend for the quarter, highlighting the growing scale and importance of this channel to advertisers. Mobile video spend grew about 60% from the first quarter of 2018 to the first quarter of 2019. Mobile in-app spend grew about 60% from the first quarter of 2018 to the first quarter of 2019. Connected TV spend grew over three times from the first quarter of 2018 to the first quarter of 2019. Audio spend grew over 270% from the first quarter of 2018 to the first quarter of 2019. Connected TV inventory continues to grow. More channels, more users and more ad opportunities joined the platform this quarter. In the first quarter of 2019, advertising slots available through the platform increased over three times. The Trade Desk invested in the infrastructure early to support CTV inventory, and, by nearly all measures, is ahead of the curve. As this market evolves, no one is better positioned to reap the rewards than TTD. It’s better to be early than late. Unified ID solution involves The Trade Desk giving away cookie ID for free to SSPs, publishers, DSPs, DMPs and data providers. Doing so helps improve the efficiency and performance of the entire ad-funded internet. Match rates have improved, giving advertisers more effective targeting, and the number of syncs taking place in the ecosystem are massively reduced, giving consumers a better ad experience. Momentum has accelerated. Today, more than half of all header bidding auctions are completed using the unified ID technology. The largest independent SSPs in the world are seeing match rates of up to 99%. As we hoped, the unified open ID is becoming a common currency for the open internet. Netflix: Revenue surpassed $4.5 billion in the first quarter. Added 9.6 million subscribers (1.74 million in the U.S. and 7.86 million internationally). Now has nearly 149 million subscribers. Not worried about Apple or Disney. Both are world-class consumer brands and excited to compete; the clear beneficiaries will be content creators and consumers. Streaming hours in the U.S. on TV still represent only roughly 10% of total TV usage. Once again mentioned that members are playing Fortnite. No mention of being ad-supported. Verizon: Verizon Media Group had $1.8 billion in revenue, down 7.2%. Declines in desktop advertising continue to offset growth in mobile and native advertising. The integration of the demand-side and supply-side platform is complete. Continued to enhance the features and solutions, making it easier to do business with advertising partners, enabling VMG to create even more synergies across the business. Focused on enhancing super-channels and driving revenue improvements in sports, finance, news, entertainment, home and mail by deepening customer engagement. For example, Yahoo! Finance launched live bell-to-bell video coverage, which is linked throughout the family of Yahoo! brands for optimal viewership. Partnered with Google to offer YouTube TV to customers wherever they want it and on whatever platform they choose. Twitter: No. 1 priority as a company continues to be health. Revenue for the first quarter of 2019 totaled $787 million, an increase of 18% year-over-year.  Advertising revenue totaled $679 million, an increase of 18% year-over-year. Total ad engagements increased 23% year-over-year.  Average monetizable daily active users (mDAU) were 134 million for the first quarter, compared to 120 million in the same period of the previous year and compared to 126 million in the previous quarter. Pleased with the pace of hiring in the first quarter of 2019, which is up 18% year-over-year. Have been talking to advertisers and really resonating, whether it’s at CES when the largest advertisers in the world gather and get to hear feedback from them, or in ongoing conversations. Continued to feel more demand constrained than supply constrained. DR is a place where advertisers want Twitter’s help and look to Twitter. Completely open to regulation where it makes sense. Regulations like GDPR have been a net positive not just for Twitter but also for the broader industry in general. It’s added a lot more clarity around privacy and how data is being used. Snapchat: Record first-quarter revenue of $320 million, an increase of 39% year-over-year. Daily active users were 190 million in the first quarter of 2019, compared to 191 million in the first quarter of 2018 and 186 million in the fourth quarter of 2018. As of March, Snapchat’s ads can now reach more 13-to-34-year-olds than Instagram’s can in the United States. In the first quarter of 2019, nearly half of daily Discover viewers watched Discover every day of the week. Advertising business continuing to scale following transition to self-serve monetization, with nearly all of the products, including lenses, now available via Snap Ads Manager. Brand buyers are also seeing great results from improvements over the past year. Now allowing advertisers to optimize against important brand goals, like efficient reach and targeting, which helps vertical video and camera marketing products work together to deliver brand narrative. The new slate of Snap Originals and Snap Games platform. Both of these products are monetized by the 6-second nonskippable mobile video product. Designed this specifically to work well for both users and advertising partners. Made remarkable progress with performance advertisers and the direct-response platform generally. In less than two years, built a self-service ad platform from scratch that is nearly at feature parity with industry leaders on things like targeting and delivery capabilities. Total direct-response revenue more than doubling year-over-year. Advertising products and self-serve platform have proven to deliver ROI at scale, with a lot of headroom for continued improvement. Announced the upcoming Snap Audience Network, which will allow publishers and advertiser partners to reach their customers in a variety of environments in a privacy-safe way. In terms of advertising business, total impressions were up 155% year-over-year and up 6% sequentially, while pricing was down 42% year-over-year and down 22% sequentially. The price decrease was driven primarily by an increase in available supply. AT&T: Revenue was $44.8 billion, up 18%, mostly due to the acquisition of Time Warner. Sold stake in Hulu. At WarnerMedia, merger-related synergies are on track and expect to hit $700 million in run rate by the end of this year. John Stankey and his team have reorganized the business to compete in a world of streaming and streaming content. Brought in some great new talent, like Bob Greenblatt. Bob’s, and his team’s, a top priority is to develop new SVOD service. This is a service that will be centered on HBO and significantly enhanced by the Warner Brothers library. Brian Lesser and his team continue to grow Xandr. Revenues were up 26%, including the AppNexus acquisition. WarnerMedia revenue growth was up more than 3%. Turner revenues were down slightly. Still very much in the early days for Xandr, but it continues to execute and expand. Making progress, integrating the Xandr marketplace across all of AT&T. Xandr is now helping optimize Turner inventory. Xandr will also be working with Viacom as a result of recent content negotiations, so AT&T is excited about that. Discussed many times the potential joint benefits of blending premium content with data and distribution to take advantage of targeted and relevant advertising opportunities. These agreements can help distributors, content providers and, most importantly, customers. Warner media day coming in September or October. Amazon: The company’s “other” revenue, which bundles advertising with some other services, grew 36% to $2.72 billion year-over-year. Seeing good advertising growth, both in North America and internationally. Really focused right now on driving relevancy, ensuring Amazon is serving the most useful areas. Going to be the best experience for customers and also for advertisers. So most of the focus has been on, again, adding more functionality, adding more products and adding better reporting for businesses and advertisers, so they can understand the incremental customers they’re seeing on Amazon through advertising with Amazon. More right now about tools and making better recommendations, making it easier to use Amazon demand-side platform and operational improvements. Very focused on serving brands as well. These brand stores are easy to create and customize and had great pick-up on that from brands, but they can show shoppers who they are and tell their story. Builds better engagement for the brand and the customer. It builds better customer loyalty both to that brand and also to Amazon. Right now, it’s more about efficiency and also performance of the advertisements themselves. Amazon spent $1.7 billion on music and video content in the first quarter of 2019 for its Amazon Prime membership service.  Its investment is 13% greater than the $1.5 billion it spent in the same period a year prior. EBay: Active buyer base grew 4% to 180 million. In the first quarter of 2019, more than 800,000 active sellers promoted over 200 million listings. Mentioned previously, as this business scales, reducing third-party ads, which are not accretive to the ecosystem. Very pleased with progress and remain on track towards a $1 billion advertising revenue opportunity. Advertising and payments on eBay are significant opportunities that continue to demonstrate progress. Executing on a marketing and product road map, positioning eBay for healthy long-term growth. Being very selective about removing third-party advertising as it scales; many sellers want to do that, so eBay is happy with it. It’s early, and it’ll be a key contributor to the $1 billion revenue advertising opportunity. Facebook: Total revenue for the first quarter of 2019 was $15.1 billion, up 26% year-over-year. Mobile ad revenue grew 30% year-over-year to $13.9 billion, making up approximately 93% of total ad revenue. U.S. and Canada at 30%, followed by Asia-Pacific at 28% and the rest of the world at 23%. Now around 2.7 billion people using Facebook, Instagram, WhatsApp or Messenger each month, and more than 2.1 billion people are using at least one service every day. Continuing to see fast adoption of Stories. In life, we have public spaces like the town square and private spaces like living rooms. In digital lives, also need both public and private spaces. In the first quarter, top 100 advertisers represented less than 20% of total ad revenue.  Commerce is a growing area, too. Seeing millions of interactions between buyers and sellers in Marketplace every day. In the first quarter of 2019, the average price per ad decreased 4%, and the number of ad impressions served across the services increased 32%. Expenses were $11.8 billion, up 80%. This includes a $3 billion accrual taken in connection with the inquiry of the Federal Trade Commission into the platform and user data practices. Facebook now has 3 million advertisers using Stories Ads to reach customers across Instagram, Facebook and Messenger. Impressions are for Stories coming in at lower prices than in feed. If anything, the mix shift on growth towards Stories is certainly in the near term a headwind on revenue growth. The number of people who have opted out of ad targeting has continued to increase since the adoption of GDPR. That means those people are seeing less relevant ads and that’s an ad targeting headwind for the business. Spotify: The world’s No. 1 audio platform. Reached 100 million premium members. Important milestone in mission to connect over 1 billion users with millions of artists. Looking more broadly at the global music economy, it was really encouraging to see that 2018 industry data has shown strong growth across the music industry, led almost entirely by streaming, which accounted for 47% of all recorded music revenue. The number of creators that are engaging directly with Spotify’s platform continues to increase, growing to over 3.9 million this quarter. MAUs grew 26% year-over-year to 217 million. Premium subscribers grew to 100 million, up 32% year-over-year. Total first-quarter revenue of €1,511 million grew 33% year-over-year. Ad-supported revenue of €126 million grew 24% year-over-year. Small incremental benefit from podcasts during the first quarter, following acquisitions of Gimlet Media and Anchor in February, and the successful rollout of Spotify-owned and exclusive content. Expect the revenue from podcasts to accelerate through 2019. Over time, ambition is to develop a more robust advertising solution for podcasts that will allow targeting, measurement and reporting capabilities we have for the core ad-Supported business. Ad-supported revenue growth underperformed expectations in the first quarter, primarily in the U.S. and primarily with sponsored-sessions video product. The performance shortfall was pricing related. Course corrected and seeing strong growth across the ads business in the second quarter. Measurement-related revenues doubled from 20% to 40% of total ad revenues year-over-year, while programmatic and self-serve grew 53% year-over-year and now account for 26% of total ad-supported revenue. Apple historically has been the largest player in the podcast space. Apple has not innovated in podcast advertising in its entire history. Working hard on building digital ad-sourcing technology, and Spotify expects that technology to dramatically revolutionize ad experiences for podcast group listeners. Apple: Revenue was $58 billion. Services with revenue reaching $11.5 billion. Sensational quarter for wearables, with growth near 50%. This business is now about the size of a Fortune 200 company. Apple Pay transaction volume more than doubled year-over-year and on track to reach 10 billion transactions this calendar year. Reached a new high of over 390 million paid subscriptions at the end of March, an increase of 30 million in the last quarter alone. In March, previewed a game-changing array of new services, each of them rooted in principles that are fundamentally Apple. They’re easy to use. They feature unmatched attention to detail. They put a premium on user privacy and security. Apple News is already the No. 1 news app in the United States and the United Kingdom. Launched Apple News+. It will bring together over 300 popular marketing magazines, leading newspapers and digital publishers into a beautiful, convenient and curated experience within the Apple News app. Also previewed Apple Arcade, the world’s first game subscription service for mobile and desktop in the living room. Roku: Roku is an increasingly important partner for content publishers, advertisers and TV manufacturers. The strength of the brand, the scale of the active account base, the advantages of the purpose-built streaming OS and the engagement of users make it so. The shift to streaming and away from linear TV and legacy distribution platforms has enormous momentum. Estimated that in the first quarter of 2019, more than one in three smart TVs sold in the U.S. were Roku TVs, making the Roku OS the No. 1 selling smart TV OS in the U.S. Total net revenue grew 51% year-over-year to $206.7 million; platform revenue increased 79% year-over-year to $134.2 million; active accounts were up 2 million incrementally versus the fourth quarter of 2018, to 29.1 million; streaming hours increased 1.6 billion hours versus the fourth quarter of 2018, to 8.9 billion; Roku’s monetized video ad impressions again more than doubled year-over-year in the quarter. In the first quarter of 2019, gained significant market share. Had a strong quarter for The Roku Channel, which now offers access to more than 10,000 free ad-supported movies and TV episodes and more than two dozen livestreaming channels. In the first quarter of 2019, added premium subscriptions to The Roku Channel, which now offers more than 30 premium content services, including HBO, Showtime, EPIX and STARZ. While traditional linear TV ads still make up the bulk of TV ad budgets, TV advertisers are beginning to commit more ad budgets to OTT, and Roku expects this trend to gain even more momentum, eventually catching up with the shift in viewing behavior towards OTT. Ad platform helps TV advertisers reach audiences that are increasingly unavailable through traditional TV advertising.


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