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msg Publicly Traded Company Analysis -- Q3 2019

Overall Insights

  • Facebook, Google and Amazon are poised for the most long term advertiser growth; powered by their self-serve, machine learning and attribution driven platform tailored for the long tail of always-on advertisers

  • Netflix is the clear leader in the streaming wars while Disney+ is still many years behind, but with more potential than any other company in the ecosystem

  • Smart companies manage the business for the long term and not on a quarterly basis -- though only a few companies really do this

  • IP/Intellectual Property is driving growth and investment throughout these companies and more of a focus than ever

  • SVOD companies think that subscription is the ideal strategy and AVOD companies think advertising is the way to go -- I still believe that wealthy households will always find ways to avoid advertising in Video content

  • Too many entertainment choices in the market, too much content -- it cannot continue at this torrid pace

  • Only one mention of TikTok -- I thought there would be more

  • More commerce to offset advertising declines is a recurring theme

  • OTT and Video discussed everywhere throughout the conversations, especially the Q&A portion of the webcasts

  • Advertiser sentiment remains strong, even though ratings continue to decline, though no company talks about rating decreases; in fact, every TV company continues to say they are #1 in ratings

  • Self-serve auction dynamics work -- all companies need to do this soon

  • Advertisers continue to move to self-serve companies like Facebook and Google, these platforms provide businesses with free tools that previously only the largest marketers could access

  • Amazon seems to really be building out its self-serve platform for the long term

  • Marketer move to more measurable advertising with attribution more important than ever

  • Every company needs a strong COO specialized in Ad Sales; especially Twitter

  • Lots of NFL talk and the power of the NFL brand

  • Both Spotify and Twitter had significant ad serving issues -- inexcusable in today's world

  • Podcasting, was mentioned often, but revenue is very small and niche

  • Marketing, when done well, really WORKS

  • Once again, digital impressions are growing on the platforms

  • Disney+ with many mentions by the other companies

  • Q4 TV scatter market appears to be strong once again

  • Large platforms still have self-serve always on SMB long tail of advertisers and traditional ad supported companies are lumpy with events and large deals coming and going

  • Some digital publishers like J2 Global and DotDash are actively looking for acquisitions

  • Facebook is now paying some publishers for content, Apple News also paying publishers for content, though Apple News does not appear to be growing

  • Google really needs to provide more visibility into Youtube -- only true self-serve OTT/CTV play

  • Advanced marketing platforms of the big TV companies are performing very well, with strong Y/oY growth and high CPM’s

  • Lots of political advertising talk -- though no significant revenue yet

  • Analyst questions seem better this time around many questions focused on the streaming wars and content production


Macro Overview

  • There's an anti-unicorn sentiment that seems to be pervading the marketplace

  • In terms of general macro conditions in the U.S., there's some economic information out this morning on jobs —I think we can see the economy to continue to be in a good stable category.

  • Magna Global estimates the programmatic advertising market is growing at around 20% this year and the overall advertising industry is growing at 4% according to IDC.

  • Worldwide advertising market moves towards $1 trillion TAM

  • This was the first year that time spent on mobile surpassed television in the U.S.

  • It goes without saying the utility and demand for high-speed and reliable Internet access are ever increasing

  • CTV and audio are two of the most effective forms of advertising because of high audience engagement

  • According to eMarketer, around 56 million households in total will have canceled cable or satellite TV subscriptions by 2023

  • Approximately 1.7 million consumers cut the cord in Q3 alone

  • According to Magna Global, OTT accounts for 29 percent of U.S. TV viewing, but so far has only captured 3% of TV ad budgets. That gap is starting to close. For example, Magna Global forecasted $5 billion OTT ad spend for 2020.

  • eMarketer came out with stats for CTV this year that grow at 40% for the year



Highlights of Each Company

  • Netflix -- No mention of advertising. Compete broadly for entertainment time, believed to be less than 10% of TV screen time in the US.

  • Verizon -- Gains in native and mobile advertising continue to be offset by declines in desktop advertising

  • Twitter -- Issues relating to revenue products reduced the YoY growth. Discovered and took steps to remediate bugs that largely affected legacy advertising product. These bugs affected ability to target ads and share data with measurement and add partners. Also discovered that certain personalization and data settings were not operating as expected -- WOW that is bad!!!

  • Snapchat -- At a high level, looking at TikTok, definitely consider them a friend. They're a developer partner. With Snap Kit, they're an advertising partner. Most importantly, the value they provide to their community is very different than the value Snap provides -- BS

  • AT&T -- Direct customer relationships, and we have about 170 million of them across mobile, pay TV and broadband, that number reaches 370 million when you include our digital properties such as CNN, Bleacher Report and Otter Media.

  • Amazon -- Other revenue of $3.6B, which is principally advertising grew 45% this quarter, up from 37% YoY. Very happy with the progress in the advertising business, continue to focus on advancing advertising experiences there, helpful for customers, helping them to see new products, want to empower businesses to find attracting and engage these customers and advertising is increasingly popular with vendor sellers and third-party advertisers

  • Facebook -- Ad impressions served across our services increased 37% and the average price per ad decreased 6%. Impression growth was primarily driven by ads on Facebook News Feed, Instagram Stories and the Instagram feed.

  • Microsoft/LinkedIn -- Nearly 660M LinkedIn members. LinkedIn revenue increased 25% YoY and LinkedIn sessions increased 22% YoY

  • Spotify -- For the Ad-Supported business, revenue growth of 20% YoY underperformed our expectations in Q3. Roughly 80% of the miss??? was related to self-inflicted implementation and integration issues we experienced with the rollout of a new order management software to replace Google’s Doubleclick Sales Manager which was sunset in July.

  • Apple -- Continue to put user privacy at the center of everything, know that Apple is strongest when the commitment to diversity and inclusion brings all voices to the table.

  • Roku -- Active Accounts of 32.3 million, a net addition of 1.7 million over last quarter; streaming hours increased 0.9 billion hours over last quarter, to 10.3 billion

  • Pinterest -- Launched several SMB-friendly features in Q3, including simplified reporting to support Quick Promote, SMB-friendly budget suggestions and an expansion of our ad credit program

  • Comcast -- Regarding Peacock, announced about a month ago the name and listed a fair number of shows that we're going to have on the service. Most important thing to think about as you're thinking about Peacock and its role inside NBCU and broader Comcast is we're not doing the same strategy that Netflix and people chasing Netflix have adopted. We're primarily working with the existing ecosystem and doing a lot of AVOD activities

  • Viacom -- The success of our Advanced Marketing Solutions business, where revenue grew 83% in the quarter, shows how we’ve evolved the ad sales business to thrive even in the phase of linear impression constraints

  • Discovery -- Ratings momentum has been an outlier in an industry where both cable and broadcast performance has been increasingly soft.

  • CBS -- Underlying network advertising revenue was up 2% for the quarter and the momentum continues here in the fourth quarter with strong scatter pricing and steady advertiser demand

  • Disney -- Ad revenue at the ABC Network was up modestly in the quarter, quarter-to-date prime time scatter pricing at the ABC Network is running 47% above upfront levels.

  • The New York Times -- This is the first time that a Silicon Valley major (Facebook) has recognized the value of Times journalism to its platform with a substantial mult-iyear fee.

  • News Corp -- There has been a fundamental change in the content landscape. For over a decade, News Corp has led the international debate in seeking fair returns for our high-quality content from the digital platforms. Clearly, the dominant digital platforms are under intense and continuing regulatory scrutiny on issues such as privacy and an opaque advertising market. There has, however, been a substantial development with Facebook's decision to pay a significant premium for our premium journalism at the WSJ and beyond. Other publishers around the world should feel free to send us a commission for services rendered -- VERY Funny!!!

  • IAC/Dotdash -- Going to continue to look for acquisitions in new verticals or new additions in existing verticals

  • Meredith -- Been adding a number of people in helping us produce more content and more video content specifically. And when we look at the first quarter that we just closed, we've had some great trends in video. Video revenue was up 20% in Q1, and video views were up in that mid-double-digit range.

  • J2 Global -- Since January 2018, of the 21 deals that J2 is consummated, 11 were in cloud services, and 10 were in digital media. Through a combination of organic growth and programmatic acquisitions, have more than doubled our revenues over the past five years

  • iHeart Radio --Automated self-serve advertising product called AdBuilder creates customized audio ads for advertisers; represents a long-term opportunity to capture the long tail small business advertiser that has historically been unavailable to us because of the economics of using a live salesperson allows us to efficiently begin to address the 7 million small businesses that are uneconomic for our sales force to call on instead of just the 60,000 clients we reach today. The 2 big digital players have proven this market and the opportunity

  • Criteo -- Most exciting results for Q3 is the momentum of our new solutions, which as a reminder, include all our solutions outside of retargeting. They grew 57% on a revenue ex-TAC basis and now account for 11% of our total business, up from 7% a year ago. Over the past year, identity graph has also grown both in size, we have over 2 billion unique Criteo IDs and in density, over 95% of our Criteo IDs now contain long-term persistent identifiers rather than just basic cookies.

  • Rubicon -- Long-term growth drivers remain unchanged supply path optimization, video and Demand Manager

  • Telaria -- CTV momentum has also driven an impressive 27% increase in platform eCPM, up year-over-year to $15.68 from $12.32

  • The Trade Desk -- Control a little over $3 billion in spend in 2019. CTV is the most strategically important focus of our business going into 2020.

  • Publicis -- Let Steve King talk

  • IPG -- Marketers are concerned about the economy, but they realize that marketing actually works and they have to spend dollars to build their brands


Platforms/Aggregators

Netflix

  • Grew revenue to $5.2 billion in revenue, up 31% Y/Y

  • No mention of advertising.

  • Some churn following price increases in the US.

  • 5 million net adds in the US in 2018 and this year will be about 2.6 million.

  • Focused on providing amazing value to members. Hulu, YouTube and Amazon Prime back in 2007, 2008, in the market have been competing heavily with linear TV. Streaming is relatively small compared to linear TV.

  • Compete broadly for entertainment time, believe less than 10% of TV screen time in the US.

  • Uniquely positioned with a $15 billion cash content budget in 2019

  • On a very competitive show, there's probably been 30% price escalation from this time last year.

  • About 2 billion active users of Facebook, 2 billion active users of YouTube. There are 6 billion active mobile phones in the world. Netflix is a fraction of those figures.

  • Established IP, like Disney+ has a leg up with consumers. They know what they're getting into. There's a prebuilt-in excitement. It makes the marketing a little easier.

  • No plans to announce doing something differently for password sharing

  • Looking to expand presentation of the top 10, so that people can come to Netflix and see the top 10 most popular things in different categories

  • Been moving increasingly to original content both because of the anticipated pullback of second run content from some studios and because our original content is working in the form of member viewing and engagement

  • Very large increase in our marketing spend last year. This year, will spend at similar levels to last year, because we learned a lot. Continue to test and learn and find new and different ways to reach members every day.

  • Just like the evolution from broadcast TV to cable, these once-in-a-generation changes are very large and open up big, new opportunities for many players.


Verizon

  • Verizon Media Group revenue was $1.8 billion, which was down 2.0% versus the prior year

  • Great take up on our NFL that we have now with Yahoo! Sports. So all in all, our Verizon Media Group is executing on the strategy we laid out one year ago in a really good way.

  • Gains in native and mobile advertising continue to be offset by declines in desktop advertising, though the business is building momentum in key areas.

  • Migrating customers to our recently integrated native and demand side advertising platforms with double-digit growth year-over-year.

  • For the first time, seeing mobile traffic increases outpace desktop traffic declines in core owned and operated products, including sports, finance, news, entertainment, home and mail.

  • Although it's early in the NFL season, customer engagement has doubled over a year ago in terms of minutes watched as more and more fans are using their mobile devices to watch games on Yahoo! Sports.

  • Diversifying monetization streams in Media Group, including additional customer engagement opportunities on Yahoo! Sports and fantasy platforms and the launch of new integrated content-to-commerce capabilities.

  • Verizon Media Group over-the-top with of Yahoo! Finance, Yahoo! Sports, Yahoo Entertainment, Yahoo! News, all of that is over-the-top services. Get engagement, learn how content is working.

  • Have the advertising platform with owned and operated content that drives the flywheel of the advertising platform

  • Executing on the 5G strategy, and now up to 15 markets deployed our 5G Ultra Wideband

  • For Disney+, partner with the best partners, and it's actually a win-win.


Twitter

  • Q3 revenue was $824 million, up 9% Y/Y

  • Total advertising revenue was $702 million, an increase of 8% Y/Y. During the quarter, encountered a number of unexpected headwinds in the ads business

  • Data licensing and other revenue totaled $121 million, an increase of 12% Y/Y

  • US advertising revenue was $385 million, an increase of 11% Y/Y

  • 17% year-over-year increase of daily usage to bring us to 145 million Product related issues.

  • By sales channel, large to mid-tier customers continue to represent a sizable majority of our advertising revenue, while our self-serve channel continues to deliver growth off a smaller base

  • By product, video ad formats continued to show strength, particularly our Video Website Card and In-Stream Video Ads

  • In aggregate, issues relating to revenue products reduced the year-over-year growth. Discovered and took steps to remediate bugs that largely affected our legacy MAP product. These bugs affected ability to target ads and share data with measurement and add partners. Also discovered that certain personalization and data settings were not operating as expected.

  • Still have more than half of our video ads being served at longer than 15 seconds. As you’d imagine on a service like Twitter, the completion rates for video ads that are 6 seconds are much better, they are much more effective for the advertiser, they’re much more compelling for the person watching them that knows that are 15 seconds or longer.

  • CPMs have been up for the last period of time here because of the product related issues that we’ve talked about, it should be no surprise that CPMs were actually down this quarter.

  • Still feel like more demand constrained and supply constrained when across the service

  • 20% or so headcount growth/expense growth for this year, those are going against things like rebuilding the ad server, they are going against coming out with a new version of MAP, things that should help us address the product related issues that came up over the course of the quarter.

  • Let me give you a couple of examples, which can help them come to life. The first is, we asked people a series of questions when we put them – before we put you into a timeline when you are new to Twitter. Among the questions, we asked our - if we can use your device settings to figure out the best ads to show you. It turns out that that setting wasn’t working as expected and we were using device settings even if people had asked us not to do so. So when we discovered that, when we tweeted about it which we often do to try to be transparent with people when things aren’t working as expected. And two, we turned off the setting, so that it would work as expected. That has a negative impact to revenue, because it’s one less input you’ve got, when you are figuring out which ads to show people. So instead of getting a partial quarter impact, you get a full quarter impact in Q4.

  • A second example is specific to MAP, where we typically will share data with measurement partners who will then share with advertisers, so that they can see the effectiveness of their campaigns, not just on Twitter, but across platforms. And another one of the questions that we ask people before we put them into a timeline, is if we can share their data with measurement partners. That setting also was not working as expected and we were passing on data, which we have not intended to. So, we stopped doing that and although we are working on remediation, there isn’t remediation yet in place, and so the effects of that will continue into Q4.As you can imagine, the remediation would be sharing aggregated data, as opposed to personalized data when people have asked us not to share their data.

  • So those are two good examples which hopefully helped the issues come to life a little bit, but this wasn't one thing, there were things that we found out over the course of the quarter and then when you get a full quarter’s impact of them even if you’re working to remediate there can be negative impact to revenue


Snapchat

  • Revenue increased 50% year-over-year to $446 million

  • Community grew to 210 million daily active users, an increase of 13% year-over-year

  • Today, each daily active user opens Snapchat 30 times per day on average

  • Remain extremely under monetized relative to audience and engagement and underpenetrated in terms of advertiser budgets.

  • More than 100 Discover channels reaching a monthly audience of over 10 million viewers

  • Obsessively focused on ensuring ad products are innovative and performant, self-service marketplace is delivering ROI at scale and that team is operationally set up for success

  • In the U.S., reached 90% of 13 to 24 year-olds and 75% of 13 to 34 year-olds

  • Extended the maximum length of video ads, allowing advertisers to leverage videos up to 3 minutes in length. Added this capability to unskippable Commercials as well, transitioning to a skippable video after the first 6 seconds.

  • As an example, for entertainment partners, added new measurement tactics and direct-to-ticketing calls to action so they cannot only ascertain how a film is tracking but also how they can directly attribute advertising on Snapchat to ticket sales.

  • Continue to see success from our Shopify partnership, allowing e-commerce brands to reach incremental audiences at scale and efficiently gain new customers

  • Across beauty, beverage, grocery and more, advertisers are turning to Snap to win the hearts and minds of the world's 13 to 34 year-olds

  • Saw cost per impression decline modestly, down 6% sequentially

  • Continue to have ample supply and lots of room to grow ARPU through both improved sell-through rates and higher yields over time

  • The way the calendar falls this year, there's 1 fewer week of activity between those Thanksgiving and Christmas holidays, and so that's a potential for a headwind

  • At a high level, looking at TikTok, definitely consider them a friend. They're a developer partner. With Snap Kit, they're an advertising partner. Most importantly, the value they provide to their community is very different than the value Snap provides.

  • On Snap Select, continuously hearing from advertisers that they want Snap win. They're seeking more options with performant and innovative assets. Snap Select is a cornerstone to the winning strategy


Microsoft/Linkedin

  • Saw record levels of engagement again this quarter across the Linkedin platform.

  • Linked Marketing Solutions remains the fastest growing segment, up 44% year-over-year, as marketers leverage the community-based tools to connect with LinkedIn

  • Nearly 660 million members.

  • Continue to innovate across our talent portfolio, including Talent Solutions, Talent Insights, Glint, LinkedIn Learning to help every organization attract, retain and develop the best talent.

  • LinkedIn Skills Assessment is a new way for members to showcase their proficiency and become more discoverable to recruiters.

  • LinkedIn revenue increased 25% Y/Y

  • LinkedIn sessions increased 22% as engagement again reached record levels


AT&T

  • Turner revenues were up on subscription revenue growth, partly offset by lower advertising and content licensing and other revenues, but operating income was up almost 3%. HBO revenues and operating income saw double-digit growth, thanks to strong content sales driven by international licensing. HBO's third quarter is even more impressive when you consider the DISH carriage dispute and Game of Thrones finale both occurred in the second quarter.

  • Direct customer relationships, and we have about 170 million of them across mobile, pay TV and broadband

  • That number reaches 370 million when you include our digital properties such as cnn.com, Bleacher Report and Otter Media. As we prepare to launch HBO Max, our direct customer relationships are an asset that any streaming company would love to have.

  • Expect to see significant incremental growth during the planning period from HBO Max and targeted advertising from Xandr.

  • Warner Media $7.8B in revenue, down 4.4% Y/Y primarily driven by lower Warner Bros. revenues partially offset by gains at Home Box Office and Turner

  • Turner $3.0 billion, up 0.6% Y/Y due to a 3.9% increase in subscription revenues, partially offset by a 3.3% decline in advertising revenues and an 11.6% decline in content licensing and other revenues

  • Turner Advertising: Decreased due to lower audience delivery at Turner’s domestic entertainment networks that was partly offset by higher pricing

  • HBO $1.8B in revenue, up 10.6% Y/Y reflecting an increase in content and other revenues and a 1.1% increase in subscription revenues Content Increased due to higher international licensing revenues Subscription increased Y/Y due to digital and international growth, partially offset by lower domestic linear subscribers

  • Xandr $504 million, up 13.3% year over year; without AppNexus, revenues were up 5.0% year over year


Amazon

  • Total sales increased 24% to $70.0 billion in the third quarter, compared with $56.6 billion in third quarter 2018

  • Other revenue of $3.6B, which is principally advertising grew 45% this quarter, up from 37%

  • Very happy with the progress in the advertising business, continue to focus on advancing advertising experiences there, helpful for customers, helping them to see new products, want to empower businesses to find attracting and engage these customers and it’s increasingly popular with vendor sellers and third-party advertisers.

  • So it’s still early focused on really at this point is relevancy, making sure that the ads are relevant to our customers, helpful to our customers, and to do that, we use machine learning and that’s helping us to drive better, better and better relevancy.

  • On the advertising side and the opportunity continuing to see some increased adoption. You know one of our areas of focus is expanding video and OTT offerings for brands. It’s still early in this space, but a few things with IMDb TV, Live Sports, things like adding more inventory through Fire TV apps, IMDb TV, adding more OTT video supply through Amazon Publisher Services or APS integrations and streamlining access for third party apps and really just making it easier for advertisers to manage their campaigns and provide better results


Facebook

  • Q3, total revenue was $17.7 billion, up 29%

  • Mobile ad revenue was $16.4 billion, contributing approximately 94% of total ad revenue.

  • As I indicated on our second quarter call, we continue to expect a more pronounced deceleration of our revenue growth rate in Q4. We expect our Q4 reported revenue growth rate will decelerate by mid to high single-digit percentage compared to our Q3 rate.

  • Ad impressions served across our services increased 37% and the average price per ad decreased 6%. Impression growth was primarily driven by ads on Facebook News Feed, Instagram Stories and Instagram feed. The year-over-year decline in average price per ad was primarily driven by the ongoing mix shift towards geographies and Stories ads which monetize at lower rate.

  • Now around 2.8 billion people using Facebook, Instagram, WhatsApp or Messenger each month and around 2.2 billion people using at least one of our services daily

  • Estimate that more than 140 million businesses, mostly small businesses are using our services each month to grow, create jobs and become social hubs in their communities

  • Estimate that these ads from politicians will be less than 0.5% of our revenue next year.

  • Now last year, you'd probably remember that we made a series of changes that emphasized friends and family and reduced time spent on our services. The one change removed 50 million hours of viral video watching a day and we did this knowing that it would mean that people spend less time on our apps

  • From the biggest brands in the world to the local barber, we are committed to leveling the playing field for businesses of all sizes. We give businesses free tools that previously only the largest companies could access. But we know this is not enough. We also need to ensure that small businesses have the digital skills to use those tools effectively.

  • But on the Instagram shopping product itself, it is still very early days and we're working to improve the product and it's quite small. We started testing in Q3 shopping ads, the idea that shoppers can tap on ad, see a product description page and can purchase from the business' mobile site.

  • Of our more than 7 million advertisers, we already have 3 million advertising across Facebook, Instagram and Messenger Stories

  • Stories does not monetize at the same rate as a News Feed right now. So, we're keeping an eye on that.


Spotify

  • For the Ad-Supported business, revenue growth of 20% Y/Y underperformed our expectations in Q3. Roughly 80% of the miss was related to self-inflicted implementation and integration issues we experienced with the rollout of a new order management software to replace Google’s Doubleclick Sales Manager which was sunset in July. This resulted in a combination of lost orders and under delivery of other orders totaling about €9 million of “lost” revenue.

  • The balance of the revenue shortfall related to a slowdown in programmatic growth from 65% Y/Y in Q2 to 48% in Q3, mostly related to a slowdown in video PMP revenue. Programmatic revenue was sluggish early in the quarter but regained momentum during Q3.

  • Podcasting revenue outperformed expectations with strong Y/Y growth but is still a relatively small slice of the total Ad-Supported business at less than 10% of total ad revenues.

  • We continue to see exponential growth in podcast hours streamed (39% Q/Q for 3Q19), albeit off of a small base. Podcast adoption has reached almost 14% of total MAUs. The U.S. accounts for the largest share of podcast streams but share of listening is higher and growing faster in several European countries. Podcast engagement is clearly a growing global phenomenon.

  • For music listeners who do engage in podcasts, we are seeing increased engagement and increased conversion from Ad-Supported to Premium. Some of the increases are extraordinary, almost too good to be true. We're working to clean up the data to prove causality, not just correlation. Still, our intuition is the data is more right than wrong, and that we're onto something special. So expect us to lean into our early success with podcasting and to share more insights with you when we've established causality


Apple

  • Make adequate investments in marketing and advertising to raise the awareness of the new products and new services and that is what you're seeing for example in the guidance that we provided for the first quarter as we’re launching new services right now, and so we're making investments both in engineering and in advertising to support the new launches.

  • We've also expanded the reach of Apple News+ beyond the United States and Canada to readers in Australia and the United Kingdom, bringing together popular publications, such as the Times of London, the Australian and Hello Magazine, in addition to major publications like The Wall Street Journal, The LA Times, The New Yorker, People, GQ and much more

  • We now have 450 million paid subscriptions across the services on our platform compared to over 330 million just a year ago, and we are well on our way to our goal of surpassing the 500 million mark during 2020.

  • We continue to put user privacy at the center of everything that we do and we know that Apple is strongest when our commitment to diversity and inclusion brings all voices to the table


Google

  • Total revenues of $40.5 billion were up 20% year-on-year, once again, our results were driven by ongoing strength in mobile search, YouTube and Cloud.

  • In terms of dollar growth, results were led again by mobile search with a strong contribution from YouTube followed by desktop search.

  • Network revenues were $5.3 billion, up 8% year-on-year, continuing to reflect the performance as a primary drivers of growth within network, namely, Google Ad manager followed by AdMob.

  • Evolved from a company that helps people find answers to a company that helps you get things done.

  • As we’ve often discussed, manage the business for the long term and not on a quarterly basis, and remain very-focused on continuing to enhance the experience for users and advertisers over the long term.

  • On to YouTube. Keeping YouTube safe for users, creatives and partners, while preserving the openness of the platform is the top priority. This quarter, continued to update community guidelines and enforcement to protect users from harmful content and will keep doing this work. In September, YouTube launched its new fashion and beauty destination called YouTube/Fashion. It's designed to meet the growing demand from consumers for better ways to explore and connect with some of YouTube's biggest fashion and beauty creatives.

  • Now, moving on to how we are helping advertisers. We are bringing our strengths in machine learning to help advertisers build their ad campaigns. Machine learning power tools like search auto bidding are gaining traction. In fact, more than half of advertisers’ search spend is now optimized via full auto bidding. We now have more than 1 million advertisers using responsive search apps, and ad format, we launched a year ago that uses machine learning to create the right ad for each search queries. And our new Video Reach campaigns allow marketers to upload multiple video ads into a single campaign. From there, we use machine learning to serve the most efficient combination of these ads to help brands reach audiences at scale.

  • It's also important for advertisers to have standardized measurement that’s fair across all media and that delivers insights in a way that fully protects user’s privacy. We are making it easier for businesses to do just that. Our next generation of Google Analytics unifies web and app measurement reporting for the first time to help businesses understand which channel is driving the best result.

  • Headcount was up 6,450 from the second quarter. And consistent with prior quarters, the majority of new hires were engineers and product managers.

  • So, in terms of desktop, I described it as a solid contributor to revenue growth. And what we see is that desktop does remain an important form factor for certain more complex tasks. So, things like planning vacations or assessing insurance options, what we see is users continue to go back to desktop, notwithstanding the growing utility of mobile. And I think one of the things that we’ve been very focused on is that innovations that benefit mobile also enhance the desktop experience for users and advertisers.

  • Subscription is an area we are different definitely excited about. We are pleased with our options so far across both, YouTube Music and YouTube Premium. They're now available in 71 countries from five markets at the start of 2018. So, we are definitely scaling that up and we're seeing great traction. YouTube TV is also doing well


Roku

  • Total net revenue of $260.9 million, up 50% YoY

  • Platform revenue of $179.3 million, up 79% YoY

  • Active Accounts of 32.3 million, a net addition of 1.7 million over last quarter;

  • Streaming Hours increased 0.9 billion hours over last quarter, to 10.3 billion

  • Recently announced an agreement to acquire dataxu, a demand-side advertising platform. While we work with many leading DSPs and will continue to do so, we believe the dataxu acquisition will accelerate our OTT advertising road map and enable Roku to provide marketers a single data-driven software solution to plan, buy and optimize their ad spend across TV and OTT.

  • Business momentum and competitive differentiation make Roku an essential partner for content publishers and advertisers. This is evident in the launch of major new streaming services on our platform and by the growth in the number of advertisers who work with Roku.

  • According to eMarketer, around 56 million households in total will have canceled cable or satellite TV subscriptions by 2023.

  • Approximately 1.7 million consumers cut the cord in Q3 alone. Our own research indicates that roughly 50% of U.S. cord cutters are Roku customers, and cord cutters who choose Roku products are highly satisfied with the decision and extremely unlikely to consider returning to a traditional pay TV subscription.

  • During Q3, we saw strong unit sales for both Roku TV and players. We continue to lead in smart TV operating system (OS) licensing as the #1 licensed TV OS in North America. We believe that Roku TV represented more than one in three smart TVs sold in the U.S. during the first nine months of the year.

  • According to Magna Global, OTT accounts for 29 percent of U.S. TV viewing, but so far has only captured three percent of TV ad budgets. That gap is starting to close. For example, Magna Global forecasted $5 billion OTT ad spend for 2020. We believe that we are well positioned to benefit from this trend.

  • Roku monetized video ad impressions more than doubled again year-over-year. The Roku Channel contributed to this growth as impressions within the channel are growing faster than our impressions within the overall platform. While we continue to work with the majority of the Ad Age 200, our ad clientele continues to diversify and now also includes a wider range of small- and medium sized businesses as well as local, direct-to-consumer, mid-market, performance, programmatic and direct-response advertisers. Average annual advertiser spend is increasing on our platform and we are bringing in new advertisers. This includes strong interest in increasing ad effectiveness with anonymized first-party data and audience guarantees. Our sponsorships business – an ad product within the consumer user experience, such as a home screen takeover – is also growing faster than the overall business.

  • Consumers are reaping the benefits as the biggest and best names in TV programming embrace the transition to streaming. Investment in content is soaring and free options are proliferating. Just as advertisers are hungry to reach consumers who no longer watch linear TV, they want to measure campaigns and have access to tools that automate them. Roku is well positioned as a neutral party that helps the whole ecosystem build value in OTT. We make it easy for our large and highly engaged TV audience to find the content they love. We are taking the strengths that have made us the leading TV streaming platform in the U.S. and laying the groundwork for enlarging our international footprint.


Pinterest

  • In Q3, we saw significant progress in the company. Revenue grew 47% year-over-year, monthly active users grew 28% to 322 million people

  • Total U.S. revenue was $251 million, an increase of 39% year over year. U.S. revenue growth was largely driven by ARPU expansion and also supported by growth in MAUs. Our highest-growth advertisers were CPG and direct-to-consumer businesses. Growth was also driven by small- and medium-sized advertisers.

  • Expanded our international footprint in Q3. Global MAUs grew 28% Y/Y to 322 million, driven by double-digit growth in nearly all international countries.

  • Now sell ads in 28 countries, up from 19 at the end of Q2. 1

  • Continue to enhance our products for advertisers, specifically around bidding, targeting and measurement. On bidding, added a video-view objective in August, and already seen very strong adoption by advertisers. On targeting, improved dynamic retargeting to better capture immediate conversions and launched region targeting. Rolled out age targeting to international advertisers (an extension of the age targeting option we rolled out in the US in Q418). On measurement, continue to make progress helping merchants integrate the Pinterest Tag into their ecommerce sites. Tag adoption from tag integrations has increased 10X since May.

  • Launched several SMB-friendly features in Q3, including simplified reporting to support Quick Promote, SMB-friendly budget suggestions and an expansion of our ad credit program. Smaller businesses are less likely to have experienced marketing teams, so we launched Pinterest Academy, a free e-learning tool we designed for businesses new to Pinterest. It can help businesses get started on our unique visual discovery platform, discover the benefits of all our ad products and leverage our advanced targeting and other features.

  • There are three kinds of generally positive themes that we're hearing from advertisers.

  • One comes down to sales impact. We're driving net new customers and new occasions to buy more top line sales.

  • Second, we hear advertisers are especially excited about insights, especially about early intent and finding early signal on some of the coming end market.

  • Finally, we hear advertisers universally saying that they want to appear on platforms where the general tone is positive. Across the board, we're also hearing that increase in the number of buying tools and targeting options is making it easier to spend.

  • On the flip side, we see a bunch of opportunities to continue improving our product offering. One on ad expenditure. We want to bring in even more advanced features to manage campaigns, things like custom reporting and simplify workflows.

  • On the measurement side, want to do more sophisticated measurement modeling like incrementality testing. And on the creative side, we want to make sure it's easy for brands to bring their creatives on to Pinterest and reduce the amount of bespoke work they have to do to appear on the platform. So those are the major themes in the U.S.

  • This quarter, we increased our SMB offerings. So we added things like click Insights to complement the mobile ad manager that we've already built, and we're seeing great traction from advertisers.

  • Two new product areas that have been - we've been focused on now and talked about for some time, but will scale going forward. They will drive advertiser diversification -- shopping and SMB.



Media Companies

Disney

  • Disney+, a combination of four years of planning, organizational transformation and a lot of hard work and we're excited to be on the verge of this new era

  • ESPN+ which was an immediate hit with sports fans when it launched last year and continues to deliver steady growth. I'm pleased to announce that as of today, ESPN+ has over 3.5 million paid subscribers,

  • Acquisition of 21st Century Fox was largely driven by the value it brought to our overall DTC strategy, adding a number of critical elements including control of Hulu, which opens numerous growth opportunities domestically and internationally

  • At launch, Disney+ users will have immediate access to more than 500 movies including all of our beloved titles and more than 7,500 episodes of library television content, including 30 seasons of The Simpsons. By year five, this growing collection will include more than 620 movies and more than 10,000 television episodes along with countless shorts and features.

  • ESPN's domestic linear advertising revenue was down 2% and so far this quarter, ESPN's domestic cash ad sales are pacing up 3% compared to last year.

  • Ad revenue at the ABC Network was up modestly in the quarter, quarter-to-date prime time scatter pricing at the ABC Network is running 47% above upfront levels.

  • Hulu is a significant driver of advertising revenue and we will continue to be particularly, as we grow Hulu. Aad supported Hulu has very high RPU, which is one of the reasons that it's being bundled with ESPN+ and Disney+ for that $12.99 price, because the value of an ad supported Hulu subscriber given the advertising revenue that it drives is very, very high


Comcast

  • It goes without saying the utility and demand for high-speed and reliable Internet access are ever increasing. see this in our customers' behavior, monthly data usage more than doubled in the last 3 years and our power users are connecting nearly 20 devices in their homes daily.

  • Surpassed 55 million customer relationships

  • Added 1.3 million broadband customers over the last 12 months

  • Total video subscribers declined by 2.8% year-over-year to 21.4 million, continue to be disciplined and are not chasing unprofitable subs

  • content continues to resonate with consumers. NBCUniversal has the largest TV viewership share of any major media company in the U.S. and one of the leading film businesses in the world.

  • NBC IS 1 in prime time among adults 18 to 49 for the sixth consecutive 52-week season.

  • Telemundo was 1 in Spanish-language weekday prime for the third consecutive season

  • Cable Networks revenue decreased 2.8% to $2.8 billion

  • Broadcast revenue decreased 9.1% to $2.2 billion

  • Advertising revenue declined 12% primarily reflecting a difficult comparison to last year's results, which included Telemundo's broadcast of the FIFA World Cup.

  • For the remainder of the year, we have a positive outlook on the ad market with the start of the NFL season and the return of original entertainment programming as well as the benefit from higher upfront pricing

  • Regarding Peacock, announced about a month ago the name and listed a fair number of shows that we're going to have on the service. Most important thing to think about as you're thinking about Peacock and its role inside NBCU and broader Comcast is we're not doing the same strategy that Netflix and people chasing Netflix have adopted. We're primarily working with the existing ecosystem and doing a lot of AVOD activities. And what that's going to do, we think, is make the -- is cut the investment pretty substantially because I think we're going to get to cruising altitude much more quickly than a subscription service.

  • In terms of the Peacock spending, marketing plan, going to remain pretty quiet until a month or 2 before launch in terms of the details for competitive reasons


Discovery

  • Strong 5% domestic advertising growth, marked by accelerating performance at both the legacy Discovery and Scripps Networks on the back of improved ratings, healthy overall pricing, nice growth on our TV Everywhere apps and strong execution by the sales and network teams.

  • Ratings momentum has been an outlier in an industry where both cable and broadcast performance has been increasingly soft.

  • Discovery is the number two TV company in America, including both broadcast and cable, with NBCUniversal being the only company in the U.S. that reaches more people and is larger

  • On any given night, we are getting between a 3 and a 4 rating in women 25 to 54 across the portfolio, and typically exceeding a 4 rating on Sunday night. And across the pay-TV universe alone, we are achieving between a 5.4 and a 7.2 rating in women 25 to 54 across the portfolio. Putting some context around this, premium IP in the U.S. today is incredibly scarce, with perhaps the NFL as the very top of the pyramid with respect to aggregating both male and female demos in large scale. And advertisers pay a significant premium for this IP. So, if you're an advertiser buying the NFL to reach women, you could reach the same number by buying one spot, a roadblock, across our top women's networks, HGTV, Food, TLC, ID and OWN. It's like a women's super-pack. And I believe we can intercept some of those huge CPM, NFL or broadcast dollars, which would be a big win for advertisers, because it would be at a much lower CPM, a big increase for us and a huge reach. And it's something that nobody else can do because we have this ability now to aggregate so many compelling and strong female networks. It's one of the wow reveals of Discovery and Scripps coming together.

  • Third quarter U.S. total revenues were up 4%, with 5% advertising growth and flat affiliate revenues. This was an outstanding quarter for our U.S. ad sales. The better than expected 5% growth was due to a combination of solid ratings, strong pricing, strong demand driving additional inventory, and continued monetization and integration of our GO platform and digital offerings.

  • Again, as David noted, we are benefiting from overlaying smart cross-promotional activity against an increasingly large footprint, which, on certain evenings, is delivering a near 30% share of women watching television.

  • For the fourth quarter, we expect continued strong pricing, continued monetization of digital as we expect further success of our GO apps, slightly

  • I would like to give some color around our expanded Hulu partnership. While I cannot comment on specific deal terms, there are some key high-level points that are important. This is a mutually-beneficial deal, where both sides will see incremental value. And I am extremely pleased with the solid economics we received. As I said before, this is one of the main drivers of our expected growth acceleration in 2019. There are many elements of the deal, including additional SVOD hours and an increase in our channels carried to a total of eight Discovery networks in the base package on Hulu with Live TV. We are also pleased that additional networks will be available on the new Hulu with Live TV tier packages later this year. The deal has strong carriage projections, as do all of our deals for our top networks. And, overall, we will see incremental economics next year and remain excited about our ability to drive greater returns from this distribution partnership as Hulu adds additional subs.


News Corp

  • $2.34 billion represents a decline of 7% Y/Y

  • There has been a fundamental change in the content landscape. For over a decade, News Corp has led the international debate in seeking fair returns for our high-quality content from the digital platforms. Clearly, the dominant digital platforms are under intense and continuing regulatory scrutiny on issues such as privacy and an opaque advertising market. There has, however, been a substantial development with Facebook's decision to pay a significant premium for our premium journalism at the WSJ and beyond. This decision begins to change the content equation, and we expect a positive impact on financials at our News and Information Services segment over the long term, beginning this fiscal year. The Facebook deal complements the agreement we reached with Apple in March when The Wall Street Journal became a launch partner for Apple News+, which expanded the reach of The Journal and its journalism to new audiences. Our brands and our content obviously benefit from the marketing region prowess of a partner, which has nearly 189 million phones in the U.S. and 1.4 billion devices globally.

  • We expect the sectoral shift in the value of digital content to have significant implications for our investors and our bottom line. And let us be clear, these unprecedented changes in the publishing industry would not have been achieved without the determination of Rupert and Lock and Murdoch and the unwavering support of the board, which has taken a long-term principal stand on the need to change the digital ecosystem. Other publishers around the world should feel free to send us a commission for services rendered.

  • Consistent with that theme of simplification, we have our Unruly ad tech business under strategic view and are also in discussions about a potential sale. We have learned much from the very talented team at Unruly, and those lessons will inform our ad business for many, many years to come

  • Advertising revenue at Dow Jones grew 2% in the quarter and led notably by strong digital outperformance at wsj.com, which grew 13% as compared to a decline of the New York Times. It's led by digital growth with a relatively stable print performance. Digital advertising accounted for 42% of total Dow Jones advertising compared to 37% last year.

  • We took the bold step of sharply increasing the cover price of the New York Post in June, and there has been a 12% year-over-year increase in circulation revenue. Advertising also rose at a similar rate. It is worth noting that more than 70% of The Post advertising revenues in the quarter were digital.

  • The Facebook deal is a big deal. It establishes a clear precedent of paying a premium for premium journalism. And there are a couple of other initiatives that are notable. When you click on a headline in the Facebook News tab, you'll be taken to our site. So the story is not hosted by Facebook. And that means that we're able to sell advertising directly, and we'll have a more lucrative flow of permission data. And these were all essential preconditions for our ascent and our agreement, and will have a long-term benefit on our accounts.

  • The digital advertising market is dysfunctional. The so-called open market is a virtual monopoly. We've been very public about our concerns on that segment, which is in dire need of reform, and is thankfully now under close scrutiny by 50 U.S. attorneys general.


CBS

  • Revenue of $3.3 billion grew 1% from last year when we had record political spending.

  • Digital advertising for network content across platforms grew 19%.

  • So we are adding intellectual property to our content pipeline, which gives us even more strategic windowing opportunities in the years to come.

  • D2C revenue was up over 39% for both the quarter and year-to-date as consumers shift from traditional bundles to skinnier bundles to CBS All Access and to Showtime OTT, we are getting paid higher rates per sub. Our rapid growth in direct-to-consumer means that our total subs are growing as well.

  • Underlying network advertising revenue was up 2% for the quarter

  • And the momentum continues here in the fourth quarter with strong scatter pricing and steady advertiser demand

  • In one major example, starting next September, Nielsen’s measurement of out-of-home viewing will be included in our ratings. So we will have an opportunity to monetize this viewing for the very first time. The NFL offers a great example here. Nine weeks into the season, the NFL on CBS is off to a strong start, up 6% year-to-date

  • When you factor in out-of-home viewing, we get an additional 11% lift to that increase and while sports is an obvious beneficiary, we are also seeing increases in out-of-home ratings in our prime time, day time and news programming, which we will begin monetizing next fall and at CBS News, our emphasis on quality reporting is leading to additional opportunities as well.


iHeart Radio

  • Revenue of $948.3 million, up 3.0% year-over-year with Digital revenue increased 33.4% year-over-year

  • Audio has never been hotter, and iHeartMedia has leadership across all major platforms: broadcast radio, streaming radio, podcasting and social. Approximately 135 million registered users, 20,000 live events and 211 million fans on social media

  • Consumers spend 30 minutes a day with us on average, whereas Google and Facebook's audiences averaged 26 and 18 minutes per day, respectively.

  • As the leading audio company in the U.S., we're benefiting from that. The most prominent example of this has been Procter & Gamble, who've been a vocal leader about their shift back to radio and which just matched its strongest quarterly sales growth in over a decade. And we believe its performance since shifting its media mix back to include radio is no coincidence.

  • The reality is consumers have never left radio. Radio's reach has remained constant, above 90% dating back to the 1970s, while TV steadily declined from 95% in the early 2000s to 86% today

  • First, the podcasting industry is growing rapidly and shows no signs of slowing down. In fact, the Forrester Research report that was published earlier this week estimated that the podcasting industry could reach $1 billion by the end of 2020.

  • iHeart is the number one commercial podcast publisher based on Podtrac's rankings, which are the industry standard for measurement

  • #1 priority is getting new advertisers to try us

  • We also have an opportunity to solve advertisers' problems with TV's declining reach and its large segment of light viewers by adding radio to the mix.

  • Automated self-serve advertising product called AdBuilder, which is now in beta. AdBuilder creates customized audio ads for advertisers using proven techniques to get their businesses heard based on information the advertisers share about the businesses.

  • We believe that this represents a long-term opportunity for us to capture the long tail small business advertiser that has historically been unavailable to us because of the economics of using a live salesperson. We do want to be clear, however, that we expect the adoption period to be very gradual over the next 3 years to 5 years before it begins to reach critical mass. More details on this to come, but we're extremely excited about the AdBuilder product as it aligns with one of the key revenue opportunities, which allows us to efficiently begin to address the 7 million small businesses that are uneconomic for our sales force to call on instead of just the 60,000 clients we reach today. The 2 big digital players have proven this market and the opportunity, and we're rolling out our product to serve it as well.

  • We also have an opportunity to solve advertisers' problems with TV's declining reach and its large segment of light viewers by adding radio to the mix.


New York Times

  • Now have more than 3 million subscriptions to our digital news product, more than 4 million total digital subscriptions and just under 5 million total subscriptions

  • Added 273,000 net new digital subscriptions in the quarter, of which 209,000 were subscriptions to our core news products. That 209,000 was 46% more than the equivalent net adds in Q3 2018

  • in Q3, we also made a significant change to our pay model. Most anonymous users now have to register and log into The New York Times if they want to read more than a very limited number of stories. Now it's much easier for us to encourage these logged-in users to engage more deeply with our content and consider subscribing. And we certainly saw a positive effect from this change in our net subscription adds during the quarter.

  • Increasing run rate of new subscriptions makes our goal of hitting the 10 million total subscription milestone by or before 2025 look well within reach.

  • Facebook News is a new initiative within the broader Facebook experience that is intended to offer users a curated selection of news from quality sources. Under the agreement, The New York Times will make its content available in the form of headlines, very short summaries and links. A small number of stories, under 1% of the whole, will be unlocked so that Facebook users can read them in their entirety. To do so, just as with the other stories, users will have to move from Facebook to our digital assets. Facebook News should bring new users to The Times. Consumption of the overwhelming majority of stories will increment our pay meter and support our subscription model. But we chose to participate in the model only after we reached a multiyear agreement for a license fee, which is a step change compared to previous content deals.

  • This is the first time that a Silicon Valley major has recognized the value of Times journalism to its platform with a substantial multiyear fee.

  • Digital advertising fell by 5% year-over-year in Q3, as I said, a little less than we predicted, and print advertising by 8%. The main reasons to the decline on the digital side were a tough comp with Q3 2018 and fewer large deals than we achieved in that quarter. We talked about this variability or lumpiness in the large-scale deals before.

  • Expect this pattern to continue into Q4. We face an even more daunting comp: Digital advertising grew in Q4 last year by 32% on a like-for-like basis, with several individual partnerships, including one that brought in nearly $10 million not repeating

  • we've described ourselves as a subscription-first company. And where there is a trade-off to be made between engaged user experience and a media advertising revenue, we will increasingly favor the subscription side.

  • Our iOS and Android apps are the digital services that drive the highest per user consumption of our journalism. We've decided that beginning January 2020, in an effort to improve low time and the overall user experience, we will no longer present open market programmatic advertising within these apps. That will result in the loss of digital advertising revenue in the single-digit millions, but we believe that this will be more than made up by gains in engagement and a higher propensity by app users, both to subscribe and retain.

  • The decrease in digital advertising revenue is largely driven by declines in our core direct sold platforms, partially offset by continued growth in podcast.

  • The print advertising result was mainly due to declines in the financial services, home furnishings and luxury categories, partially offset by growth in the advocacy category.

  • The success of our price rise tests and our growing confidence in our ability to deliver discrete messages to different segments of our subscriber base has convinced us that we can execute a price rise for tenured subscribers with minimal risk of reducing new subscriber growth momentum

  • Overall advertising revenues and digital advertising revenues are expected to decrease in the mid-teens compared with the fourth quarter of 2018.

  • The Daily is a monster hit, with an astonishingly valuable audience, and it just continues to grow with more than 2 million listens a day and 3/4 of this audience is 40 years old or younger, 45% is 30 years old or younger


Viacom

  • $3.43B in revenue down 1% Y/Y

  • Viacom maintains the number one share of U.S. basic cable viewing among key demos and our portfolio grew market share in the quarter

  • Moving to domestic ad sales, thanks to the combination of our vibrant brand and strong ad sales execution including our sophisticated suite of Advanced Marketing Solutions, we delivered 6% ad growth, marking the second consecutive quarter of positive performance.

  • In particular, the success of our Advanced Marketing Solutions business, where revenue grew 83% in the quarter, shows how we’ve evolved the ad sales business to thrive even in the phase of linear impression constraints.

  • Pluto TV is of course one of those strategic acquisitions and has quickly become an integral part of our AMS offering. Pluto TV continues to grow, expanding its leadership in the free streaming TV space, and its contribution to our ad sales growth.It now has approximately 20 million domestic monthly active users

  • Viacom owned more top 30 original cable series in the quarter than any other cable family among key demos

  • IAC/Dotdash

  • Adjusted EBITDA doubled and revenue grew 34% year-over-year, up from 23% growth in the prior quarter. Now have emerging brands in seven high-intent categories — Health, Finance, Home, Food, Tech, Travel and Beauty. The opportunity in Beauty alone is measured in billions

  • Dotdash – In Q4 we expect revenue growth over 25%.

  • Look at each vertical as a huge opportunity.

  • In Health, ranked in the top five when you look at audience In Health and some very big players ahead of us, in terms of both revenue and profitability, and we've been very focused on innovating in product in this area.

  • Always focused on having the best and freshest content and the fewest ads

  • Monetized with other format of advertising. e-commerce as a format of advertising, sending audience on to other sites

  • Finance has several huge players in front of us several of them. Doing very well with Investopedia and The Balance and we're going after the people who are bigger than us with bigger audience and bigger revenue.

  • Beauty is another one. Home's another one. All these are multibillion-dollar categories of advertising online where we can deliver really compelling content

  • More better content in our existing category in 2020

  • And then we're going to continue to look for acquisitions in new verticals or new additions in our existing verticals.



Meredith

  • Total Company revenues from continuing operations were $725 million, compared to the prior year of $774 million. The prior year included $33 million more of cyclical high-margin political spot advertising in Meredith's Local Media Group.

  • Digital advertising revenues grew 8 percent, driven by growth in Meredith's programmatic platform.

  • Print advertising performance was down in the mid-single digits compared to the prior year, in-line with Meredith's historical performance. The EatingWell, Southern Living, Real Simple and InStyle brands all generated growth in print advertising

  • Been adding a number of people in helping us produce more content and more video content specifically. And when we look at the first quarter that we just closed, we've had some great trends in video. So overall, video revenue was up 20% in Q1, and video views were kind of up in that mid-double-digit range.

  • The other area that we're looking at investing is in consumer, what we would call our consumer digital business. A lot of that's in e-commerce.


J2 Global

  • Digital media grew over 21% to $173 million. Particularly pleased with the 34% growth in digital media subscription revenues.

  • Completed four acquisitions in Q1, and two acquisitions in Q2, making the total number of acquisitions this year 10. Generally speaking, seeing attractive deals across the markets in categories in which we operate.

  • Organized the company into 13 business units. Of the 13, 5 of the units are below $75 million in annual revenues. Continue to grow as a company, it's a priority for to scale these units to be north of $75 million and ultimately north of $100 million in annual revenues.

  • Since January 2018, of the 21 deals that J2 is consummated, 11 were in cloud services, and 10 were in digital media, with 11 of the 13 business units closing at least one transaction.

  • Through a combination of organic growth and programmatic acquisitions, have more than doubled our revenues over the past five years

  • BabyCenter. The parenting and pregnancy space is a very attractive one to us. It sits at the nexus of a broad range of digital health extensions including fertility services, women's health, child and family health care and genetic health services. By owning both BabyCenter and What to Expect, believe we have become a global leader in this vertical where users can be served at every stage of the pregnancy and parenting journey. From a value creation point of view, this is very similar to our past digital media acquisitions. We see opportunities for business model innovation, as well as focusing the business on profitability. On the former, we have at what to expect and that many of the j2 digital media brands a great track record with performance marketing solutions, where we generate customers and leads for our clients. Today, the BabyCenter business is primarily display advertising, while the What to Expect business makes a majority of its revenues from performance marketing. We believe, we can successfully implement performance based solutions at BabyCenter to drive growth.

  • Continuing good display advertising revenue

  • If you can be a cash buyer in the digital media industry, which we are, and historically have been. I think it's a buyer's market.

  • Deployed over $420M for acquisitions this year in the nine months.

  • Video is a key part of how we monetize properties today inside of the advertising business. You know IGN has got a substantial video business. Mashable has got a substantial video business. Everyday Health has a video business. So video has been part of our advertising mix for a while. We don't do as much in audio. We know it's the space, we'll look at. But remember, in our advertising business I say a couple of things. Number one is, the display business continues to grow. And it's been growing for four consecutive quarters after there was a period of time when we were having some challenges.

  • The customer generation performance marketing components of what we do, where we're not selling CPM advertising, cost per thousand display advertising, but we're selling cost per clip, cost per lead, cost per acquisition, that is sort of that. That is what the marketplace is really looking for., Can you generate customers for us? Can you get us measurable ROI where we're fitting into their LTV equations? That's where we do our best. And so any format that can produce those outcomes we're interested in.

  • There are a lot of interesting acquisition opportunities for us right now and I think again depending on where the markets are and what business climate is, there may be even more. So I'm optimistic from an acquisition point of view in terms of what the next 12 to 36 months will look like.

  • There's an anti-unicorn sentiment that seems to be pervading the marketplace

  • in terms of general macro conditions in the U.S. I think we can – we see it to continue to be in a good and stable.


Ad Tech

Criteo

  • Revenue ex-TAC, our key metric to monitor the business, was also flat at constant currency at $221 million. New client business drove our performance, especially in the midmarket, offsetting a limited decline in our existing client business, despite continued adoption of our new solutions across the client base.

  • Among the Q3 highlights, our quarterly net client additions were again positive, with 240 net new clients, in line with our expectations. As in the prior quarter, this was again driven by focused execution and productivity improvements in our midmarket sales teams.

  • Most exciting results for Q3 is the momentum of our new solutions, which as a reminder, include all our solutions outside of retargeting. They grew 57% on a revenue ex-TAC basis and now account for 11% of our total business, up from 7% a year ago. Over the past year, identity graph has also grown both in size, we have over 2 billion unique Criteo IDs and in density, over 95% of our Criteo IDs now contain long-term persistent identifiers rather than just basic cookies.

  • Announced a new partnership with LiveRamp on IdentityLink. By combining LiveRamp’s identity solution with ours, we offer marketers additional capability to reach their customers in a privacy-by-design manner. We believe this enhanced identity solution is quite unique in the industry and very competitive compared to walled gardens’ own proprietary approach. This combination also broadens our reach by providing access to additional cookie-less inventory, including connected TV.

  • Over 4,200 publishers now connect to our Direct Bidder both on the web and app inventory

  • Regarding our legacy retargeting business, we saw a decline in the mid-single digit range on a revenue ex-TAC basis. The softness was mainly concentrated in the large customer segment and is driven by two main factors: first, the much higher penetration we have reached here compared to midmarket; and second, their delayed investment in mobile app marketing that doesn’t fully compensate for the slow erosion of browser usage yet.

  • As discussed about Retail Media, we are seeing some of our most sophisticated retailers seek more control over their ad tech stack. Sometimes, this appetite for control becomes even more important than campaign performance itself.

  • Google’s first-price. So this is important. Google was the last large exchange, plus at a speed to move from second-price to first-price. And we were very well equipped for this transition, because we’ve been developing first-price bidding engines for the long time now. And as a result, their overall impact was likely positive for us because as we believe our first-price bidder is all things equal, relatively speaking better than the competition. We could take advantage of this change of Google to first-price to increase our bidding competitiveness. So all-in, it’s been a positive change for us.

  • Second, to evolve from what was perceived as a narrow point solution to an actual tech platform, we made huge efforts migrating our managed services into self-service tools that can be operated directly by our clients, large and small, and their agencies.

  • Regarding CTV, it’s an early market. So it’s probably a little early to speculate what was – it’s pretty obvious way one that it’s a very fragmented market today. And it’s a bit like the web, I would say 15 years ago. So eventually one day you might – it might consolidate into a handful of a super strong walled garden, that’s again, you should look at what – where was the web landscape 15 years ago? You had no walled gardens at all. You had a bunch of publishers that are all trying to better monetize inventory. And you mentioned Roku and others, they all looking to increase the value of their inventory and maximize the opportunities to monetize the inventory. And this is high quality inventory, where you don’t have the typical flow that you have on the web. So this is what it’s promising. Right now, it’s a smaller – it’s a small market and compared to the web. So again, we are testing the waters there. But I mentioned that as a midterm area of interest for us.

Rubicon

  • Revenue of $37.6 million, reflecting year-over-year revenue growth of 27%.

  • Realized the first, albeit small, revenue from Demand Manager in the fourth quarter.

  • Header bidding caused an explosion in ad requests over the past few years and we're focused on ingesting as many impressions as possible to really understand the new market dynamics of header

  • Q3 started strong, followed by some volatility, which included: first, Google's move to a first-price unified auction structure that included Google's removal of last look advantage, which had historically hurt win rates of others

  • Our long-term growth drivers remain unchanged, supply path optimization, video and Demand Manager

  • We are very pleased with our Demand Manager customer engagement with the additions of Business Insider, LA Times and Everyday Health among others

  • Q4 guidance, expect to post year-over-year revenue growth of approximately 25%

  • The year-over-year increase in revenue was once again driven by solid growth in both take rate and ad spend

  • Mobile revenue grew 26%, our desktop revenue grew 28% and video and audio revenue continued to be growth drivers in the quarter.

  • Not updating our take rate guidance, but at the beginning of the year, we talked about take rate being in the mid-13s and so we'll stick with that

  • federal privacy initiative, which frankly we welcome, although we haven't seen any details, I should be careful, but it sure beats having to do 50 different ones or in the States.

  • Demand Manager -- Instead of winning a small portion of a publisher's inventory in our auction, we're able to monetize 100% of their inventory, albeit at a much lower take rate. So we're very excited about it, the traction has been terrific. Who's their biggest competitor in market, Prebid itself.

Telaria

  • Revenue grew 23% year-over-year to $16.6 million with CTV growing 115%

  • CTV revenue grew to $7.3 million for the quarter and represents nearly 45% of our revenue up from 39% of our revenue last quarter.

  • CTV momentum has also driven an impressive 27% increase in platform eCPM, up year-over-year to $15.68 from $12.32

  • A recent report from advertising analytics and cross screen media estimates political ad spend for the next election cycle could reach $6 billion in the U.S. with approximately $1.6 billion of that projected for digital video.

  • With over 30% of U.S. households whoever no longer reachable through traditional TV CTV is becoming essential to reach and engage voters.

  • Roku is a venue with vast majority of their ad sales have been Direct a pretty strong validation of that thesis around programmatic driving the future of CTV advertising.

  • eMarketer came out with stats for CTV this year that grow at 40% for the year.

  • the desktop business that sees the most negative pressure on it. So if you look at industry statistics, desktop video will actually shrink over the next several years.

  • Reaching a point of subscription fatigue which we've talked about since day one, and is that there's going to be a limited portfolio of subscription-based services that people are going to be willing to pay for and the rest of their viewing portfolio will really be made up of AVOD players. And I think that even with rumored transitions of even such things as the Peacock Network, which was supposed to be a fully SVOD network coming out as potentially an AVOD opportunity as well, you're seeing the increase in advertising-supported platforms out there actually creating a greater proliferation of opportunities for us as a company to help those guys monetize that inventory. So, again, I think these are great market tailwinds for us.

The Trade Desk

  • Revenue grow 38% year-over-year. Revenue was $164.2 million

  • Spend on our platform and Connected TV was up 145% from Q3 of last year. We have seen strong growth in available CTV inventory, especially in live events

  • CTV is the most strategically important focus of our business going into 2020.

  • Audio spend was up a stunning 162% year-over-year. Like CTV, audio is a large and growing market, about $3 billion according to PwC digital radio estimates.

  • CTV and audio are two of the most effective forms of advertising because of high audience engagement

  • In Q3, almost half our revenue came from ads on mobile devices, which includes mobile video

  • In Q3, data was up 63% year-over-year.

  • Content providers are not our direct customers. They are our partners. More and more, they are asking to work with us. It's not just Amazon and Disney as its other major global providers worldwide, including Channel 4 in England, ProSieben in Germany, TF1 in France and pretty much every other significant network and content providers

  • Seeing game-changing progress from other partners. For example, FreeWheel, the largest ad server in the CTV space, launched their version of header bidding, unified yield.

  • With Amazon, the number of impressions on our platform increased 21x during the quarter

  • 95%-plus retention rates

  • More than 70% of the Ad Age top 200 advertisers have spent on our platform in the last 12 months

  • As the worldwide advertising market moves towards $1 trillion, The Trade Desk is perhaps the best-positioned company to win the largest share of the programmatic portion of that market, which is the fastest-growing segment

  • It's an interesting move that Roku buys Dataxu. To just give a little bit of context in terms of size, this year, just round numbers, we'll control a little over $3 billion in spend. They'll do a little over $100 million in spend at dataxu.

  • On the linear side, figures from Leichtman research group shows that the entire traditional linear TV industry lost about 1.53 million subscribers in Q2 2019. Linear broadcasters are fighting for fewer viewers while content costs are going up. That's a ticking time bomb. For advertisers, that means their ad-to-viewer ratio is worse than ever. Until recently, there's been a sense that they have nowhere else to go

  • Expect CTV growth of over 100% again in 2020

  • Our investment also includes areas such as measurement as advertisers look for the most precise information on campaign performance. Our measurement tools allow any agency or advertiser to use third parties for verification. This helps the ecosystem become more transparent and avoid the "grading your own homework" syndrome that advertisers experience with walled gardens and which often office gates ROI and data


Agencies

IPG

  • Continued global increases across a very broad range of verticals, healthcare, financial services, retail, tech and telecom and consumer goods. The auto and transportation sector decreased mainly due to last headwinds

  • A disconnect between business and what's happening in the stock market and in the global world, if you will, in terms of what's happening there. The uncertainty obviously is not helpful.

  • Marketers have money and they're willing to spend. The difference between now and in a stronger environment today is is very project oriented

  • Marketers are concerned about the economy, but they realize that marketing with IPG actually works and they have to spend dollars to build their brands

  • Of course, no mention of Google, Facebook or Amazon

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions in the foreseeable future. I wrote this missive myself, and it expresses my own opinions. I am not receiving compensation for it.

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