Essential First-Quarter Stats for Ad Tech and Platforms

The ups and downs of various industry leaders

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How ad-tech companies and platforms performed in Q1 2019. Pixabay

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. 

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  • 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.
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Matthew Scott Goldstein is a versatile and hands-on, data-driven consultant with deep knowledge of the media business.