CTV and 'Addressability' Buoy Ad-Tech Revenues, Indicating Companies' Future Focus

The latest quarterly earnings calls of the few remaining independent ad-tech companies demonstrate the winds of change in digital media. Earlier today, LiveRamp trumpeted its efforts to help the media transition to the decline of third-party cookies while Magnite boasted of its connected television gains. The two companies simultaneously reported their revenues for the quarter ending Sept. 30 with both boasting an increase compared to 12 months earlier: LiveRamp revenues: $105 million, up 16% year over year. Magnite revenues: $61 million, up *62% year over year. LiveRamp's quarter LiveRamp CEO Scott Howe told financial analysts that his company expects to be profitable through the next year. Additionally, subscription products generated 82% of total revenue (approximately $86 million) during the quarter, up 19% compared to a year ago. Meanwhile, LiveRamp's data marketplace offering appeared to rebound during the period, up 27%. This came as advertisers loosened their grip on purse strings as global lockdown restrictions eased. Additionally, LiveRamp is also working with more than 25 supply-side platforms (SSP) and 45 demand-side platforms (DSP) with its Authenticated Traffic Solution (ATS). It has won favor with 215 global publishers, including 60% of the U.S. Comscore top 50 that represent more than 14,000 distinct web properties. Howe also said that LiveRamp continues to be on the lookout for potential acquisitions. Executives are also forecasting the company's revenue for the coming quarter to be in the range of $113 million, a potential 11% increase. He also told investors the company's Safe Haven offering was winning favor with brands, including CPGs and retailers. These brands—in addition to publishers—are preparing for the decline of third-party cookies as the default means of targeting online ads and measuring effectiveness. Citing a recent experiment with a DSP, Howe said media buyers using LiveRamp's ATS offering saw significant improvements in advertisers' cost per page view and the average order value from audiences that converted when compared to cookies. "We recently completed another case study, which will be published soon, with a major technology company and saw very similar results with up to 190% improvement in ROI," he added. Magnite Meanwhile, Magnite revealed on its earnings call that its CTV revenue for Q3 was at $11.1 million, up 51% year over year on a pro-forma basis. This is only the second trading quarter of the entity after the merger of advertiser Rubicon Project and video management platform Telaria. "We believe a meaningful portion of our growth is coming from broad market share gains," said Magnite CEO Michael Barrett in a statement. "In programmatic ad-supported CTV, we continue to benefit from the acceleration of cord cutting, spend moving to programmatic from direct sales, inventory growth and overall consumer adoption rates," he continued. In discussion with financial analysts, Magnite executives further reiterated how the disruptive effect of Covid-19, both in terms of viewer habits and the upending of this year's traditional Upfront season, fueled its earlier predicted surge in CTV revenues. Barrett explained how his company's growth in CTV revenues trailed that of peers on the buy-side of the industry—notably, The Trade Desk—given that spend is more fragmented on the sell-side. "We do believe that [the sell-side of the market] will behave over time like the buy-side and there'll be outsize winners … and that Magnite will be there," he added on the earnings call. "So, I think we're outpacing industry growth." Given the upbeat economic outlook after today's announcement that Pfizer has made significant developments with its Covid-19 vaccine research, analysts speculated over whether the TV ad market will see a return to its normal means of trading TV ad space. However, Magnite executives were confident that CTV would remain a prominent fixture in the TV media trading sector of the industry. "In talking with buyers, … they have said that programmatic has never been more important to their business," commented Barrett. "So, even if the Upfronts returns in earnest, there's always going to be inventory available for us to access. I don't believe the return of the Upfronts means the death of the growth of CTV by any stretch." *This reflects the combined increase in revenue post the merger of Rubicon Project and Telaria