Notes from Q3 Earnings Call
1. the shift of ad dollars into digital is driving tremendous growth in digital video advertising, particularly on mobile devices,
digital video advertising continues to grow rapidly. According to Magna Global, digital video is growing nearly 30% per annum and is forecast to be over $20 billion globally by 2017. Also, while the growth in digital video advertising is coming in part at the expense of other digital ad formats, it is now clear that large TV advertisers are beginning to shift real dollars into digital.
Two of our clients, Allstate and Mondelez, are on record with relevant declarations. Allstate has said from 2013 to 2015 that it will have shifted about 20% of its TV ad dollars to digital advertising. Mondelez, the world’s largest snack company with beloved brands like Oreo, Chips Ahoy, and Wheat Thins, has likewise indicated that they are targeting for 50% of their total ad budget to go into digital by 2016.
So it’s no longer a question of whether TV dollars will shift to digital. It’s just a question of how much of the $200 billion global TV ad market will shift and how long it will take.
2. rapid adoption in programmatic or software-based buying
advertiser adoption of programmatic is accelerating. Like other markets that software has transformed previously, the advertising ecosystem is complex, manual, and often opaque. The benefits of programmatic buying are tangible and significant, including increased simplicity through streamlined and consolidated workflow, cost savings, and enhanced targeting. It’s therefore no surprise that, according to Magna Global, programmatic video is expected to grow at a compound annual growth rate of 60% globally from 2014 to 2018.
3. advertisers desire to gain more control and transparency over their ad spend by adopting self-serve software platforms.
while many of the early companies and business models that leverage programmatic technologies were black boxes, advertisers have spoken. And it’s clear that they want more control and transparency. So while many companies in the space are simply buying programmatically on behalf of their clients, we build self-serve software that gives advertisers all the functionality needed to manage their global video ad spend, while also gaining the control and transparency they seek, the antithesis of the black box model that is so prevalent in ad tech.
competitive advantage in Q3. First, we’re 100% advertiser-focused. We never own media or make money from media. Our only incentive is to do that which is best for advertisers. This positioning is unique amongst our direct competitors, and the large Internet companies that will inevitably build out or buy their own ad tech stacks.
Second, our business is global.
Third, our solution is cross-screen. It’s as easy to plan, buy and measure a video ad on a smartphone, tablet, or connected TV as it is on a computer. This is increasingly important as consumer video consumption shifts to mobile devices. And to accentuate the point, our total mobile spend increased to 9% of total spend in Q3, almost double the contribution we saw just in Q2.
Fourth, while most companies in advertising technology focus on direct response, we are focused exclusively on brand advertisers.
our focus on self-serve software is a true differentiator.
we upgraded brand access. Our solution that allows advertisers to automate their direct deals with premium publishers or what is often referred to as programmatic direct. By enabling our clients to streamline their workflow with centralized planning, targeting, frequency capping,
advanced our brand safety capabilities in Q3, including integrating third-party protection from [white ops and integral ad signs]. For every ad opportunity we evaluate, now more than $15 billion per day, we apply a variety of filters, depending upon the type of ad opportunity that together act essentially like a lie detector test against the information we receive
have pioneered the innovation and video viewability. While we already provide viewability reporting in our software at the site by site level, in Q3, we also published site-level viewability scores from excellent to poor. Then in our platform, advertisers can choose to switch on or off sites based on that information, helping them to maximize the viewability rates for their campaigns.
overhaul our analytics system
Q3, we had 308 platform direct clients, up from 165 a year ago.