Essential Fourth-Quarter Stats for Ad Tech and Platforms

The ups and downs of various industry leaders

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Were you surprised by what platforms and ad-tech companies saw at the beginning of 2019? Illustration: Trent Joaquin
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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 2018 fourth quarter. 

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  • The Trade Desk: the independent internet has more premium content than the user-generated content sites, and this is especially true in TV and video content as more of that comes online. Whether it’s premium video content, apps or websites, TTD is the one who monetizes it. The Trade Desk helps advertisers find quality content and audiences as well as mitigate the risks of advertising on user-generated content sites. Revenue for the fourth quarter of 2018 was $160.5 million, up 56 percent year-over-year. This growth reflects increased spend by existing customers as well as the addition of new customers. Approximately 90 percent of the fourth quarter gross spend came from existing customers that have been on the platform for over a year. Inviting everyone in the industry to use TTD universal ID, which does not link to a user’s actual identity, can help advertisers reach more of their valuable target audiences. TTD added a feature that counters publishers’ moves to first price auctions, which have caused CPMs to jump up significantly. Using predictive clearing, they have seen CPMs reduced by up to 20 percent, which is a huge value.
  • Criteo: plans to release a new fully automated self-service onboarding module by the end of second quarter 2019. Revenue ex-TAC increased 0.1 percent at constant currency to $272 million in the fourth quarter and grew 2 percent at constant currency to $966 million in 2018. Criteo grew the number of clients by 7 percent, maintaining retention at close to 90 percent for all solutions combined. This brings the number of clients to about 19,500. They now access close to 3,500 large publishers through Criteo Direct Bidder, compared to 2,600 in the third quarter, adding new premium partners like NBC, Mediavine and The Washington Post.
  • Roku: smart TVs are adopting a licensed OS just like phones did. Roku OS, which they have been developing for the last 10 years, is the leader in this shift because it is incredibly user-friendly yet powerful and built solely for the TV ecosystem. TV advertising is a $70 billion market, and it is in the very early stages of transitioning to streaming. Roku built advanced features for advertisers into the OS, and independent studies show that Roku TV advertisements are more effective than traditional linear ads.
  • Rubicon: header bidding now represents over 80 percent of the business, supported by publisher-direct connections using Prebid and partnerships with Google and Amazon. They mentioned last quarter that there was some industrywide pressure on CPMs, a trend which has continued into the first quarter. The CPM decline was expected and is mainly attributed to buyer pricing tools in response to first price auctions, fewer cookie-based targetable impressions resulting from Apple ITP, from GDPR initiatives and Header Bidding impression fatigue from sellers exposing their inventory to duplicative supply sources.
  • Telaria: expanded and enhanced agency and brand sales team, more than doubling its size and geographic reach. Filled the desktop inventory gap by expanding server-side integrations with existing high-quality partners, increasing the amount of inventory that they monetized to on the platform. CTV has grown from 1 percent of total revenue at the end of 2016 to 33 percent of revenue in the fourth quarter of 2018.

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  • Netflix: winning entertainment time from other activities instead of playing Xbox games like Fortnite or using YouTube or HBO. There are a billion hours of television content being consumed today, with Netflix garnering about 10 percent of TV usage.
  • Apple: total active installed base of devices is 1.4 billion and 900 million for iPhones. Apple News set a new record, with over 85 million monthly active users in the three countries where they have launched: the United States, the U.K. and Australia. Apple offers an advertising service for developers on the App Store.
  • Verizon: Verizon Media Group revenue (Oath) was $2.1 billion in the fourth quarter, a decrease of 5.8 percent year-over-year. Growth in mobile was overshadowed by the macro pressures from declines in desktop volumes. Supply- and demand-side platform integrations are complete. Focused on super channels like Yahoo Sports, Yahoo News/HuffPost, Yahoo Finance and Yahoo Entertainment.
  • AT&T: total Turner advertising rates continue to be solid even while ratings decline. Domestic ad revenues declined 6%. Warner DTC will be a two-sided model, with a heavy subscription service, with some ad supported elements as well. Xandr, new advertising and analytics business continues to execute at a high level. Total revenues were up 49 percent or 26 percent excluding AppNexus. Much of that growth can be attributed to a strong political ad season. Even without that, revenues continue to grow significantly.
  • Facebook: fourth quarter mobile ad revenue was $15.5 billion, increasing 36 percent year-over-year and contributing approximately 93 percent of total ad revenue. They have more than 7 million active advertisers across services, with 2 million advertisers using Stories to reach customers across the family of apps. In the fourth quarter, the average price per ad decreased 2 percent, and the number of ad impressions served on the services increased 34 percent. There are now 400 million people who use Facebook Watch every month, and people on average spend over 20 minutes on Watch.
  • Amazon: other advertising is $3.4 billion, up 95 percent year-over-year, which primarily includes sales of advertising. They’re continually building advertising products to help customers, agencies and advertisers make sure they’ve got a variety of ways to meet their goals.
  • Google: made $39.1 billion in revenue, up 22 percent year-over-year. The majority of new hires were engineers and product managers. They released eight products, with more than 1 billion users, and are seeing significant ongoing potential in applying machine learning capabilities across the advertising businesses. They continuously work to enhance the user and advertiser experience. Performance advertisers love TrueView for action, YouTube’s direct response offering. Since the product launch in March 2018, over 30 percent of the advertisers who use TrueView for action were new to buying video ads on YouTube.
  • Snap Inc.: advertising business has progressed significantly following the transition to self-serve last year, building core ad platform and products to improve performance and scalability for both brand and performance marketers. They’re now able to reach 70 percent of the total 13–34-year-old U.S. population with premium mobile video ads on a monthly basis. Total impressions were up 179 percent year‐over‐year and 31 percent sequentially, while pricing was down 48 percent year-over-year and was up 3 percent sequentially.
  • Twitter: advertising revenue totaled $791 million, an increase of 23 percent year-over-year. They’re making a lot of progress on making Twitter a clear and strong choice for advertisers. Mobile application downloads is an important part of the advertising business. There’s more work for Twitter to do on that demand/supply balance as they still feel more demand-constrained than supply-constrained across the platform.
  • Spotify: ad-supported revenue of 175 million euros reaccelerated its year-over-year growth in the fourth quarter to 34 percent. Growth in programmatic and self-serve (Ad Studio) channels continue to outpace the growth of direct. Combined, they grew approximately 60 percent year-over-year and together account for approximately 25 percent of total ad sales revenue. More than 2,000 advertisers used the Ad Studio platform in the fourth quarter to run campaigns. Expect these automated channels to become an increasingly significant portion of the ad-supported revenue and for operating margins to expand as a result. They reached an important milestone as users listened to more than 15 billion hours of content on the platform and surpassed more than 200 million monthly active users worldwide. Self-serve is the fastest growing channel.
  • EBay: 600,000 active sellers promote 200 million listings in the fourth quarter, significantly higher than last quarter, and began rolling out placements more broadly in search results. This helped drive nearly $80 million of advertising revenue this quarter, up nearly 150 percent. They will ramp advertising effort in 2019 while ensuring they achieve the right balance between user experience and monetization as they build toward $1 billion in advertising revenue opportunity.

Matthew Scott Goldstein is a versatile and hands-on, data-driven consultant with deep knowledge of the media business.
Publish date: March 28, 2019 https://stage.adweek.com/programmatic/essential-fourth-quarter-stats-for-ad-tech-and-platforms/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT
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