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Q4 2020 Earnings Analysis

My thoughts on the quarter

It’s a great time to be a consumer of entertainment. There are a wealth of options ranging from linear TV to video gaming to user generated content on Netflix to YouTube and TikTok. Though there are ongoing major secular changes, accelerated by the pandemic.

Like GDPR previously, IOS14 permeated many of the conversations. Section 230 will in the next year or so. Apple is the most dominant tech company that ever existed. Facebook's biggest competitor is now Apple. Though Apple made no mention of Facebook in their earnings call. Facebook claims to be the hero of small business throughout the world.

Traditional linear TV did well because of political advertising, otherwise the outlook does not look good. Under 10% of television viewing time is on Netflix. For traditional television there is a 21% decline in broadcast primetime ratings last year according to Nielsen. 2020 was a wake up call to the advertising industry. The upfront process is as a holdover from the 1950s.

CTV advertising continues to excel.

The big growth in streaming entertainment has led legacy competitors like Disney, WarnerMedia and Discovery to compete with us in new ways, which Netflix has been expecting for many years. Peacock is having a very slow start, same for HBO Max -- might make sense for them to merge.

COVID-19 headwinds have largely diminished in Q4. Pretty much all advertising companies in the programmatic space performed very well. We know the quarter is good as Verizon Media Group increased revenue by 25% Y/Y. Twitter seems to finally be getting its ad platform working better.

Once again performance marketing continues to grow. Gaming is becoming more relevant for advertisers. YouTube continues to shine and may be worth $500B+ as a publicly traded company.

The acceleration of online commerce into the holiday season and the shift in consumer spend towards products vs. services was evident. Closed loop attribution is all the rage, including Walmart partnering with The Trade Desk. Retailers are now becoming publishers.

Three concepts are bringing permanent and structural implications to retailers. One, customer shopping behavior will be permanently changed in a way that is even more digital and puts customers entirely in control to shop how they want. Two, the workforce will need to evolve in a way that meets the needs of customers while providing more flexible opportunities. Three, technology is playing an even more crucial role in people's lives.

Q1 2021 outlook seems very strong for all non-TV advertising companies and products.

Economic Overview -- Comments From the Earnings Calls

2020 was an incredibly difficult year with extraordinary loss for so many families on top of new restrictions that none of us have ever had to live with before and great uncertainty. A year like no other in recent memory. As we entered the year, few could have predicted how volatile the operating market -- operating environment would be as the health crisis precipitated by the COVID-19 pandemic resulted in a global economic recession, which the world is still dealing with.

A few years from now, we'll look back at 2020 as the year that gave us the opportunity to structurally change the business for the better. Aggressively managing the challenges in 2020 depended on our ability to make big changes quickly. But the truth is that COVID-19 has changed us forever. As we recover from this crisis, we've stopped using the term return to normal because it creates an environment where it's just too easy to go back to doing what we were doing before. Instead, we want to focus on a return-to-new.

Seeing an ever-greater need from clients to accelerate their digital transformations; we are witnessing the dawn of a second wave of digital transformation sweeping every company and every industry.

Phase 1 has been about managing through the peak of the uncertainty, which is what we focused on for most of 2020. We are now solidly in phase 2, which is about investing to rebuild our growth momentum. Our goal in phase 2 is to prepare us for phase 3, a return to pre-COVID levels.

It will take a society-wide effort across the public and private sectors as individuals and communities, every one of us, to ensure that what's ahead of us is not simply the end of a disease, but the beginning of something durable and hopeful for those who gave, suffered, and endured during this time.

Now because of COVID-19, we now have a deeper appreciation on just how pivotal good health is to our safety, security, and prosperity and as a society. We have a profound respect and gratitude for all the doctors, nurses, and hospital staff serving on the frontlines of care, the everyday heroism of the essential workers who show up every day to keep the world's critical infrastructure up and running, and expectations that companies can and should help drive positive change in society are higher than ever.

Q4 Company Deep Dives


  • Facebook -- Total revenue for Q4 was $28.1 billion, which is a 33% Y/Y increase, our fastest growth rate in over two years. The growth in advertising revenue was largely driven by a strong holiday shopping season for retail, which benefited from the ongoing shift to online commerce.

  • 2.6 billion people now use one or more of our apps each day; and more than 200 million businesses, mostly small businesses use our free tools to reach customers.

  • Continue to fine tune how this works, but now we plan to keep civic and political groups out of recommendations for the long term, and we plan to extend that policy globally. And to be clear, this is a continuation of work we’ve been doing for a while to turn down the temperature and discourage divisive conversation and communities.

  • We have a lot of competitors who make claims about privacy that are often misleading. Apple recently released so-called Nutrition Labels, which focus largely on metadata that apps collect, rather than the privacy and security of people’s actual messages. But, iMessage stores non-end-to-end encrypted backups of your messages by default, unless you disable iCloud. So, Apple and governments have the ability to access most people’s messages. So, when it comes to what matters most, protecting people’s messages, I think that WhatsApp is clearly superior.

  • I do want to highlight that we increasingly see Apple as one of our biggest competitors, iMessage is a key linchpin of their ecosystem, it comes pre-installed on every iPhone, and they’ve preference it with private APIs and permissions, which is why iMessage is the most used messaging service in the U.S. And now, we are also seeing Apple’s business depend more and more on gaining share in apps and services against us and other developers. So, Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own. And this impacts the growth of millions of businesses around the world, including with the upcoming iOS 14 changes, many small businesses will no longer be able to reach their customers with targeted ads. Now, Apple may say that they’re doing this to help people, but the moves clearly track their competitive interests.

  • Ecommerce's goal is to give every individual, entrepreneur and small business access to the same kinds of tools that historically only the big companies have had access to.

  • In December, we estimated that approximately 2.6 billion people used at least one of our services on a daily basis and that approximately 3.3 billion people used at least one on a monthly basis. Facebook daily active users reached 1.84 billion, up 11% or 188 million compared to last year. DAUs represented approximately 66% of the 2.8 billion monthly active users in December. MAUs grew 299 million or 12% compared to last year.

  • In Q4, the total number of ad impressions served across our services increased 25%, and the average price per ad increased 5%. Impression growth was driven by both Facebook and Instagram. The increase in average price per ad was driven primarily by Facebook mobile feed as well as pricing improvement in Instagram Stories.

  • In the past year, we added a record 13,600 net employees and reached our goal of adding 10,000 employees in tech and product roles. We ended the year with over 58,600 full-time employees, up 30% compared to last year. We continue to be pleased with our ability to recruit, onboard and retain talent in this environment.

  • Turning now to the outlook. We continue to face significant uncertainty as we manage through a number of crosscurrents in 2021. We believe our business has benefited from two broad economic trends playing out during the pandemic. The first is the ongoing shift to online commerce; the second is the shift in consumer demand towards products and away from services. We believe these shifts provided a tailwind to our advertising business in the second half of 2020, given our strength in product verticals sold via online commerce and our lower exposure to service verticals, like travel. Looking forward, a moderation or reversal in one or both of these trends could serve as a headwind to our advertising revenue growth.

  • We continue to believe that that will be a headwind in the ads business. It’s in our view, not just limited to IDFA, but broader than that is we’re going to have to be providing a prompt asking people for permission to use third-party data to deliver personalized ads. So, that’s going to be true whether you’re using IDFA or not, and we do expect there to be high opt out rates related to that, and that’s factored into our outlook. We expect that to roll out sometime -- we expect later in Q1. But, the timing is uncertain, and Apple hasn’t given clarity on that at this point. And we do expect that will have increasing impact through the year as more users adopt iOS 14 and go through those permissions.

  • I do think that Congress should update Section 230 to make sure that it’s working the way that people intend, right? And it’s after, I think, being in place for almost 25 years. And the Section 230 has been very important. It’s helped give rise to the internet as we know it today. And it’s given internet platforms tools to be able to balance free expression and safety. And I think, it’s also gone pretty far in terms of helping to ensure that values like free expression are built into the internet’s DNA. So, I think that any changes should be thought through very carefully, and should be thought through not just from the perspective of what a larger company like Facebook or Google or Twitter could handle in terms of updating their content moderation policies, but also from the perspective of making sure that new companies can continue to emerge


  • In the fourth quarter, retail was the largest contributor to the year-on-year growth of our ads business. Tech, media and entertainment and CPG were also strong contributors. The trajectory of search advertising over the past year demonstrates its responsiveness to consumer interest and needs and how marketers can quickly adjust their spending as circumstances change to focus on generating ROI for their businesses.

  • In YouTube, Direct Response had a substantial year-on-year growth throughout the entire year, including the fourth quarter. After a substantial pullback at the outset of the pandemic, brand spending began to recover in the third quarter. Marketers realized that even if there was a pullback in consumer demand in the short term, they needed to keep their brands in front of people to stay top of mind when spending picks back up. In the fourth quarter, we saw significant acceleration of brand spending on YouTube. Network revenues in the fourth quarter benefited from the same uplift in spend by advertisers, particularly in AdMob and Ad Manager. Google other revenues were driven by growth in YouTube's non-advertising revenues, primarily from subscriptions as well as by Google Play revenue growth.

  • I now want to step back from the results of the quarter and quickly reflect on the generational shift to digital we've seen over the past year and what that means for our business. First, dramatic changes to consumer behavior have fundamentally changed the way companies are doing business across many industries and geographies. Lufthansa is a great example. Like many airlines, they needed more insight on where to fly, at what capacity and how often as travel started to open up last year. Over the summer, we built a product called Flight Demand Explorer, which gave real-time answers to these questions, helping them find demand and ramp up. Within 2 months, they tripled destination routes and got more than 80 planes back in the air, with many flights fully sold out within days.

  • We're putting real-time insights into the hands of businesses and other verticals. In fact, we just launched a new insights page to give our advertisers the latest on ever-changing search trends relevant to their business right inside of Google

  • Google Search and other advertising revenues of $31.9 billion in the quarter, up 17%; YouTube advertising revenues of $6.9 billion, up 46%, driven by a rebound not only in brand advertising but also ongoing strength in direct response; network advertising revenues of $7.4 billion, up 23%.

New York Times

  • Advertising also performed better than expected in the fourth quarter. The pandemic substantially impacted our ad business all year, and we experienced a hastening of decline in traditional print categories, at least some of which are unlikely to return, but we also saw some stabilization in our digital ad business by midyear.

  • We credit that stabilization to the increasing potency of our ad products and to our ad teams’ continued ability to rapidly transform our value proposition. In advertising, first-party data targeted media and audio remain our biggest growth drivers. In the second half of 2020, we introduced more unique first-party audience products, which are performing well. We also recorded $36 million in podcast advertising revenue in 2020, up $7 million from the prior year powered by our expanding portfolio of audio programs. We expect podcast revenue growth to be strong into 2021 as we continue to see steady demand for the daily and our other shows and as we benefit from our acquisition of Serial and the rights to sell advertising against This American Life.

  • Total advertising revenues declined approximately 20% in the quarter as print continued to be severely impacted by lower marketer demand during the pandemic. digital advertising declined approximately 2% in the quarter, compared with the prior year with growth in podcasts and open market programmatic, partially offsetting declines in our creative services businesses. As a reminder, in the early part of 2020, we closed our HelloSociety and Fake Love agencies, and turned off open market programmatic advertising within our apps. These together were responsible for approximately $8 million in revenue in the fourth quarter of 2019 and $28 million for a full year of 2019.

  • It’s also worth noting that our fourth quarter digital advertising revenue is better than the guidance we gave in early December, largely as a result of better than expected rates earned on open market programmatic advertising. Our first-party data offerings delivered more than 20% of our core digital advertising revenue in the fourth quarter, compared with less than 7% in the same period last year. Meanwhile print advertising declined approximately 38% with entertainment, media and luxury categories hit hardest.

  • Let me conclude with our outlook for the first quarter of 2021, which is based on our current knowledge and assumptions, and could be impacted by the evolving effects of the pandemic. Total subscription revenues are expected to increase approximately 15% compared with the first quarter of 2020 with digital-only subscription revenue expected to increase approximately 35% to 40%. Overall advertising revenues are expected to decrease in the high teens compared to the first quarter of 2020, and digital advertising revenues are expected to increase in the low to mid single digits.


  • Digital advertising revenues grew 22% to a record high $161 million.

  • Our multi-year efforts to bring all of our brands together on a single digital platform continues to enable strong consumer engagement, along with growth in advertising and e-commerce revenues.

  • Of note, traffic to our digital properties and partner networks grew significantly, with 16% session growth from the prior year period. Our fiscal second quarter, which includes several holidays, is heavily influenced by food. Allrecipes, the world's largest digital food site, as ranked by Comscore, delivered record performance, with almost 0.5 billion sessions, up 23% from the prior period.

  • also delivered record performance and remains the number one destination in the entertainment category. Additionally, our powerful National Media Group brands, led by people and Better Homes and Gardens, delivered strong growth in brand licensing revenues, particularly from our digital relationship with Apple News Plus, along with continued growth from our long-time licensing partner, Walmart.

  • Our performance is driven by our trusted brands, relevant content, consumer experiences at scale, digital first-party data, and unique offerings for our partners. We're seeing significant demand from the capabilities offered by our Meredith Data Studio, which we launched last quarter.

  • Our clients are seeing value from it across a broad range of offerings, including predictive insights that help our brands and our partners create the right content and messaging for consumers, robust data-driven audience targeting for our partners, and leveraging our taxonomy that is unique in the industry, and predictive advertising solutions based on our contextual data that's driven click the card experiences.

  • As a result of our unique and robust suite of offerings, we sold twice as many million dollar plus programs during the second quarter compared to last year. As our digital business continues to grow, we expect to provide additional disclosures in an effort to provide more transparency. We've already heard from many of you about this and continue to welcome feedback on digital-related disclosures that would be helpful to better understand our business results.

  • advertising performance during the quarter, we are benefiting from our multi-year investment in the technology platform we highlighted last quarter. As a reminder, the new platform brings together consumer profiles, real-time insights and intent signals to; one, predict trends that inform our editorial and products road map; two, provide personalized experiences to our consumers; and three, give our advertisers the ability to tailor the right messages and products to the users most likely to buy at any given time.

  • It also prepares us well for a world where third party cookies are no longer supported. The magazine platform is recovering in line with our expectations. Here too, clients are looking for dependability, flexibility and brand safety. As a result, our magazine brands are outperforming the competitive set and continue to take market share. According to Media Radar, Meredith's share of the U.S. magazine advertising market stood at more than 45% in calendar 2020 through December, up from 31% in the same period a year-ago.

  • We saw more advertisers coming back into the open programmatic market, which helped increased programmatic pricing. Importantly, we also saw strong growth in direct sales, driven by advertiser demand for our powerful brands, premium content, and first-party data, along with the flexibility that our digital platform offers


  • In 2020, our full year revenue was $2.5 billion, growing at 46% Y/Y, an acceleration of 1% from 2019. In Q4 2020, we generated revenue of $911 million, a significant acceleration of 18 percentage points to 62% Y/Y growth. These results are a byproduct of the hard work being done across all teams at Snap and validate the decisions we've made around our business structure, our go-to-market strategy and the products we have built for our community and advertisers.

  • While brand advertisers encountered some disruption during the year, direct response advertisers remained steady as we continued to demonstrate that we are an efficient platform for driving results across down funnel metrics. In Q1 of 2020, our business grew 58% Y/Y during January and February but slowed in March and throughout Q2 as the realities of COVID-19 and subsequent economics impacted the course.

  • However, in Q3 and Q4, we saw many existing advertisers return to Snap and so many new ones leverage our innovative ad formats and bidding capabilities to drive real business value on our platform. This drove active advertisers to an all-time high. In addition, our brand safe environment and privacy-first approach has differentiated us from our peers.

  • These emerged as important themes in 2020, we don't believe they are going away and they have led to improved advertiser retention and increased demand. The recent audit of digital platforms and advertising spend by many brands has given us an opportunity to educate the highest levels of our industry on our points of differentiation and safety by design principles.

  • We have been able to tell our story to an attentive elevated audience but are reevaluating marketing dollar allocations, while there is still more to do, we are excited to continue building on our recent results and investing to capitalize on our momentum. We are fully focused on making progress against our revenue and ARPU opportunities, which we believe will be driven by our three key priorities.

  • The COVID-19 pandemic has brought rapid change in shopping patterns, as people have moved their consumption online. Direct-to-consumer businesses are flourishing and consumers are looking for new ways to discover product at home. We are committed to finding new ways to support businesses via our ad products and tooling capabilities while providing our community with new ways of experiencing the products and brands that they love.

  • Expects its yearly revenue to grow by at least 50% for the next several years, thanks largely to new ad formats and sections of its app it plans to monetize

  • In conclusion, we started 2020 on a high note and we ended it with accelerating momentum, which we plan to carry forward in 2021, continuing to drive ROI and performance for our advertising partners investing in innovative ad unit and providing support for our sales and marketing functions. I am confident in our long-term trajectory and I look forward to sharing even more at our Investor Day in a few weeks.

  • Overall eCPM in Q4, increased 46% Y/Y driven by a combination of mix shift towards a higher eCPM product, such as Commercials, mix shift towards higher eCPM regions with the relatively higher growth in North America, as well as a rapid rise in overall demand sequentially. Despite this growth in eCPM, we believe our eCPMs remain well below market rates for our audiences and ad units.

  • The ongoing growth of our community combined with deep engagement within our app, including deep engagement across platforms we have not yet begun to monetize, gives us ample opportunity to expand inventory and our ARPU opportunity over time.

  • We continue to make improvements to our targeting and optimization capabilities that allow us to utilize our inventory more efficiently. In addition, we more than doubled the number of active advertisers Y/Y in Q4, which further contributed to our ability to optimize our targeting by providing a greater diversity of advertising offers for our models to select from.

  • For example, while eCPMs for inventory monetized by our pixel verified purchases rose by 41% sequentially in Q4. The cost per purchase for our advertising partners declined by 11% over the same period. Consequently, we believe that we will be able to deliver attractive returns on ad spend to our advertising partners as eCPM grows over the long term


  • Total revenue was $1.29 billion in Q4, an increase of 28%. Total US revenue was $733 million, an increase of 24%. Total international revenue was $556 million, an increase of 34%. Revenue from Japan, our second largest market, increased 26% to $176 million or 14% of total revenue. Total advertising revenue was $1.15 billion, an increase of 31%. Data licensing and other revenue totaled $134 million, an increase of 9%.

  • We made significant progress on our brand and direct response products in advance of the recent relaunch of our Mobile Application Promotion (MAP) offering. New ad formats, stronger attribution, and improved targeting resulted in a 31% Y/Y increase in total ad revenue and greater than 50% Y/Y growth in MAP revenue in Q4.

  • We saw advertisers increase investments across both brand and direct response in Q4. MAP ads totaled more than $300 million in FY20, roughly flat Y/Y, but increasing significantly over the course of 2020 and ending the year with revenue up more than 50% in Q4, reflecting significant improvements to the product as well as easier comps from our legacy MAP product in Q4’19.

  • On February 8, we announced the launch of our rebuilt MAP offering and website clicks objective. Our newest MAP offering reflects more than 30 product improvements across five key areas: campaign management, quality supply, ad formats, optimization, and measurement, collectively increasing mobile app impressions by 80%(1) and driving better performance for MAP advertisers. For website clicks, we introduced Twitter Click ID and improved conversion optimization. Twitter Click ID provides a more reliable way to report (in a privacy-sensitive way) who visited an advertiser’s website after clicking on a Twitter ad, improving our ability to attribute site visits without cookies, with early test results showing a 10X increase in attributed site visits.(2) Our conversion optimization model improves campaigns that optimize for site visits and is driving a median increase of 26% in click-to-land rates with a significant decrease in cost per site visit in recent tests.(3)

  • We made progress on a number of new ad formats across both brand and direct response in Q4, including: the launch of an extended beta for Branded Likes and the global release of single destination Carousel ads, designed to deliver a more immersive and interactive experience and better performance. Carousel ads include an edge-to-edge design, third-party measurement, accessibility support, and new reporting features, such as swipes within the Carousel and the ability to measure individual Carousel card performance. We’ve seen strong results in early testing, with an approximate 15% increase in clickthrough rates on average for Website Carousels and an approximate 24% increase in installs per impression on average for App Carousels, both relative to single asset formats.

  • We also delivered stronger attribution and measurement across brand and direct response in Q4 with a new A/B testing tool that allows advertisers to test the relative efficacy of various creative and targeting approaches to better optimize campaigns — and we announced a partnership with Neustar for multi-touch attribution, helping advertisers better understand how exposure to an ad on Twitter contributes to an individual’s ultimate purchase decision.

  • Building better performance products is an integral part of our long-term strategy and we see a clear path to driving more direct response advertising on Twitter over time. An improved MAP offering and more direct response ad formats should increase our addressable market and diversify our customer base, with more access to always-on advertising demand, while continuing to build on our strengths in helping brands launch something new and connect with what’s happening.

  • We are also actively working with key industry partners to advance brand safety as a central component of the advertising and measurement solutions on Twitter. To that end, in Q4 we announced that we selected DoubleVerify (DV) and Integral Ad Science (IAS) to be our preferred partners for providing independent reporting on the context in which ads appear on Twitter. We see this as an opportunity to build solutions that will give advertisers a better understanding of the types of content that appear adjacent to their ads, helping them make informed decisions to reach their marketing goals. These solutions will complement our existing third-party viewability measurement solutions with DV and IAS

  • Total ad engagements increased 35%, driven by strong growth in ad impressions due to our growing audience and increased demand for ads. Cost per engagement (CPE) decreased 3%, which was largely a function of supply opportunities outstripping demand. As a reminder, CPE is an output of our ads auction process, and will vary from one period to another based on geographic performance, auction dynamics, the strength of demand for various ad formats, and campaign objectives.


  • A top priority throughout the year has been to evangelize the adoption of our Authenticated Traffic Solution, ATS. Across every major publisher brand and tech platform and we made great progress again in the third quarter. To-date more than 325 publishers worldwide up from 215 last quarter have adopted ATS in the US, UK, France, Italy, Spain, Germany, Australia and Japan including 65% of the US comScore top 50. We more than tripled the number of ATS enabled campaigns in Q3 relative to the prior quarter and expect continued explosive campaign growth in Q4 as well.

  • ATS is comprehensive, agile and built to scale and can be used anywhere in individual logs in or authenticates its multi-channel and supports customer journey engagement across display on mobile and desktop as well as mobile apps and connected TV. This means that brands have the means to buy media using LiveRamp's people-based identifier, cross channel and know that they can reach and measure individuals not just devices with consistency and accuracy. Our market momentum is being fueled by these factors along with our interoperability, neutrality and unmatched global scale.

  • Most importantly, ATS simply works better, it works better than what is replacing. I recently a wrote a blog on the transition from third party cookies to ATS which can be found on our website and that contains useful detail that I hope you'll have a peruse. Also I address the exceptional results we're seeing on our last call. But it bears repeating. ATS helps publishers make more money, marketers generate higher ROI and consumers maintain greater choice and control over their data. In recent years, impressions flowing through browsers like Safari, Firefox and Edge together comprise 40% of US internet traffic haven't been addressable with third party cookies. ATS makes these impressions available and addressable, enabling publishers to monetize more people-based inventory and marketers reach more of their target audience.

  • We've seen publishers generate 350% greater yields on Safari and marketers are experiencing greater unique reach and at least two times higher return on ad spend. In fact, in a campaign with Goodway Group and Index Exchange, a national retail client saw three times higher reach with consistent performance when transacting on LiveRamp's people-based identifier compared to third party cookies.

  • Marketers are taking notice and taking action. For example, recognizing the significance of these results. One of our agency partners Goodway Group has subsequently pledge to migrate all of their first party LiveRamp audiences to bid on our identifier via the Trade Desk by the end of the month. Their commitment underscores the sheer scale and proven performance of ATS and mirrors the larger industries movement towards buying sustainable, people-based inventory.

  • In short, ATS is transformational and we must ensure every publisher, brand and tech partner is using ATS to drive results and real value. Evangelizing ATS remains a top priority in Q4 and beyond. While we believe the transition away from third party cookies will be a long-term positive for LiveRamp. The transition will also have several financial implications for us. So I want to provide a bit of detail here as we finalize our budget and expectations for FY 2022.

  • First, our customers and partners success with ATS equates to our success and we continue to believe that ATS will help fuel our growth over the medium to long-term. In addition to becoming a channel for new logo acquisition ATS should drive greater adoption and usage of our platform globally as it catalyzes and pulls through used cases, like measurements, Safe Haven and data marketplace. This gives us confidence in our direct subscription value proposition and corresponding direct client growth rates for FY 2022 and beyond. This revenue represents the majority of our subscription base and will drive continued company growth.

  • Second, we'll also be sunsetting a portion of our current revenue. We've historically licensed cookie-based components of our digital identity graph to a few technology platforms and plan to either exit or reimagine these relationships over the next 12 months. These relationships have been slower growth in recent years and the overall revenue impact could be up to $30 million in FY 2022.


  • Q4 revenue grew 76% Y/Y to $706 million, driven by strong holiday advertiser demand and positive returns from our investments in ad products and international expansion. Full year 2020 revenue grew 48% Y/Y to $1.69 billion.

  • Unlike other platforms where ads distract users from reading the news or connecting with friends, commercial content can enhance the Pinner experience. People come to Pinterest looking for products and services to plan their futures and build their lives.

  • Helping advertisers reach new customers is essential to our mission. So we plan to make a number of investments to support advertisers, including improving automation so it’s easy to do business on Pinterest, improving our measurement capabilities and growing our sales coverage for all types of advertisers. We want to make it easier for Pinners to buy the things they see and love. This means helping more businesses get their products on Pinterest, and helping Pinners discover, evaluate and buy products that inspire them. We’re also planning to expand these features more globally so that no matter where you live, you can shop on Pinterest. Advertiser demand was broad based as businesses have increasingly adapted to the COVID environment.

  • Building off of the positive trends in Q3, we saw strength in Q4 from small and medium sized advertisers, international advertisers, CPG advertisers and retail advertisers. Demand was also strong across awareness and performance objectives, and shopping ads once again grew faster than our overall revenue.

  • Automatic bidding supported higher budget utilization, better performance, and overall budget expansions, particularly for small and medium businesses. We continued to grow our active advertisers to new levels and further diversified our revenue across advertisers. Our current expectation is that Q1 revenue will grow in the low-70% range Y/Y.


  • In Q4, we grew our active account base by over 5 million, resulting in a record 14.3 million incremental active accounts for the year. And we ended 2020 with 51.2 million active accounts. Our scale has extended rapidly over the last several years. And to put it in perspective, Roku's U.S. active account base is more than twice the size of the video subscribers of the largest cable company in the U.S.

  • In addition to increasing our scale, we continue to see growing engagement with our platform, with 2020 streaming hours up 20.9 billion Y/Y to a record 58.7 billion hours. In Q4, we grew streaming hours 55% Y/Y, consistent with the Y/Y growth rate for the full-year. Furthermore, we grew average streaming hours per active account 10% Y/Y in Q4, demonstrating the strong engagement of our user base

  • In Q4, total revenue increased 58% Y/Y to $649.9 million. Platform segment revenue was up 81% Y/Y to a record $471.2 million, driven by strong advertising demand

  • Q1 outlook at the midpoint of total revenues of $485 million, up 51% Y/Y

  • Programmatic, it is true today that the majority of the spending in OTT is still a more traditional spending pattern. Insertion Order based, and that's largely because most of the money - the early money that's flowed into OTT has come out of TV budgets and that's generally the way TV has been spent historically. But programmatic is rising quickly, it's a key part of why we've been investing in OneView.

  • And we do believe long-term, although it's not the case today, that programmatic will be a majority of how OTT is bought and sold, not the least of which because programmatic is a superior way to leverage our data, to leverage measurement to do dynamic optimization of your spend. So in short, our strategy is to sell the way buyers want to buy, they're still buying both ways. It's still predominantly traditional, but we do believe that it will be heavily programmatic over time.

  • The growth of our ad business is the result of - as we highlighted in prior quarters, just ongoing major secular changes, accelerated by the pandemic. Just for context in traditional television there is 21% decline in broadcast primetime ratings last year, according to Nielsen.

  • Even as rates in the upfronts have gone up, 13%, due primarily to scarcity. And the median age of the viewer of the top three broadcast networks is now over six years old. This pattern is not sustainable for TV marketers and the pandemic really accelerated the decision by marketers, by advertisers to right size their investment towards streaming.

  • And then on the side of streaming, there is all sorts of stats to support why there should be more spending, half of adults, 18 to 34 - half of their viewing is now streamed

Trade Desk

  • Spend on our platform in 2020 was nearly $4.2 billion, a record. Fourth quarter spend alone was over $1.6 billion, also a record. CTV spend more than doubled for the year. And once again, despite all the uncertainty of the year, we delivered strong profitability highlighting the operating leverage we have in our business.

  • We are right around that point where there are more U.S. households without a cable subscription than those with one, and that trend is not reversing.

  • But perhaps more important than all that data is, where we go from here, because 2020 was a wake up call to the advertising industry, when it came to TV. I can't put it any better than Mark Pritchard did, the Chief Brand Officer of P&G, the world's largest advertiser. I was on stage with him at CES a few weeks ago, virtually, of course, and he talked about how 2020 has forced advertisers into a world of ''constructive disruption''.

  • He highlighted the upfront process, which he described as a holdover from the 1950s where TV ad campaigns were tied to new vehicle launches every year – every fall. He talked about the need to be more flexible, more real-time to bring the same measurement techniques we've grown accustomed to in digital to the world of TV. Ultimately, he and I believe we are heading toward an inevitable future, where all of advertising is, and I quote using his words, digital, programmatic, data-driven and automatic. By the way, he's not alone in this thinking about the upfronts. According to our research, 60% of linear TV ad buyers are planning to spend less at the upfront this year for these very same reasons.

  • UID 2.0 is the new common currency of the open Internet, one that respects privacy and improves consumer controls, while preserving the value exchange of relevant advertising. UID 2.0 is also free. And as we speak, it is being integrated into the transactional pipes of the entire open Internet. And that common currency is not just centered on if this new currency allows for effective comparison and measurability across all advertising channels across the open Internet. Ultimately, that's what advertisers care about most. If you were to ask most of them, they'd probably say they expect the identity piece to get fixed and they expect the key industry players, such as The Trade Desk, to figure that out for them. What advertisers really want is a trusted system that solves the identity problem while also solving for the measurement opportunity. And if we get that right, once again, we prove out the value of the open Internet versus the limitations of walled gardens, where measurement is typically some variation of grading your own homework.

  • But perhaps nothing highlights this shift more than the news we announced a few weeks ago around our new partnership with Walmart. The work we're doing with Walmart is actually indicative of an entire industry that is starting to shift to a data-first marketing model. This is significant for our business because, according to some estimates, the TAM for shopper marketing is well over $100 billion. Let me use Walmart to explain. Walmart is the world's largest retailer after all, with the world's largest supply of shopper data, across a massive array of consumer products. And for the first time with this partnership, they are making that shopper data available to advertisers. So Walmart suppliers, who happen to be among the world's leading advertisers, can now run digital ads, whether on mobile, desktop, CTV, audio, et cetera, and understand how shoppers are reacting to those apps. By that, I mean which ones led to sales and when. And advertisers can then refine those ad campaigns based on which ones work best with which kind of customers, at what times and what channels and what regions and near which stores.

  • Q4 revenue was $320 million, a 48% increase from a year ago. For full year 2020, revenue was $836 million, a 26% increase from a year ago. We have been encouraged to see advertisers accelerate their shift to data driven advertising in the second-half of 2020. Our results reflect the ongoing strength of programmatic advertising and the value that The Trade Desk provides to thousands of agencies and brands as they work to connect with their customers across our platform every day.

  • In terms of our verticals that represent at least 1% of our spend, nearly every category improved during the quarter; health and fitness, our largest vertical in 2020; shopping, which benefited from the holiday season; food and drink and home garden all performed very well. Automotive was also particularly encouraging as it bounced back quite a bit in Q4 versus the prior quarter. Travel continues to stand out in terms of delayed recovery. And while it improved slightly from Q3, it still has a lot of room for growth that we expect will follow as the world returns to normal, whenever that happens. And finally, as you can imagine, we had strong US political spend during the quarter. In Q4, political spend represented a high single digit percent share of our spend. For the full year 2020, political spend represented a mid-single digit percent share of our spend. And importantly, this impact was felt beyond just the second-half of the year.

  • Turning to our outlook for the first quarter. During the first month and a half, spend is strong, and we're off to a great start to the year. We estimate Q1 revenue to be between $214 million and $217 million, which would represent growth of between 33% to 35% on a Y/Y basis, a modest acceleration from our Q1 results in 2020.

Q4 Company Quick Takes

  • Verizon Media Group -- had the first quarter of Y/Y revenue growth since Yahoo acquisition; Advertising revenue grew 25% Y/Y; strength in Finance and News with daily active users up 52% and 11%, respectively Demand Side Platform revenue grew 41% Y/Y

  • Netflix -- 8.5M paid net additions in Q4, we crossed the 200m paid memberships mark. For the full year, we added a record 37m paid memberships, achieved $25 billion in annual revenue +24% Y/Y and 22% Y/Y for the Q4

  • Warner Media -- $8.6 billion, down 9.5% Y/Y, driven by a decline at Warner Bros. partially offset by an increase at Home Box Office and Turner advertising decreased primarily due to the delay of the NBA season to the latter part of the fourth quarter and lower overall ratings. Warner Brothers revenue was $3.2 billion, down 21.2% Y/Y primarily due to declines in television and theatrical

  • LinkedIn -- advertising business had a record quarter, accounting for more than a third of LinkedIn’s total revenue. LinkedIn’s Marketing Solutions was up over 50%, as advertisers increasingly turn to the platform as the trusted way to reach professionals ready to do business. Record levels of engagement across the platform, as LinkedIn’s nearly 740 million members use the network to connect, learn, and find new opportunities. Sessions increased 30%. Conversations were up 48%. And hours spent on LinkedIn Learning were up 2X, compared to a year ago.

  • Peacock -- premium ad-supported streaming service Peacock now has 33 million sign-ups within just six months of its nationwide launch. As a light ad load and unlike any other, offers a breath of content that appeals to just about every demographic, at an unbeatable consumer value, much of it for free. Peacock generated revenue of over $100 million while EBITDA losses approached $700 million. We continue to expect that EBITDA losses for 2020 and 2021 combined for Peacock will total roughly $2 billion.

  • Apple -- achieved an all-time revenue record of $111.4 billion. Hit a new high watermark for our installed base of active devices, with growth accelerating as we passed 1.65 billion devices worldwide during the December quarter. iPhone grew by 17% Y/Y, driven by strong demand for the iPhone 12 family, and our active installed base of iPhones is now over 1 billion. iPad and Mac grew by 41% and 21%, respectively, reflecting the continuing role these devices have played in our users' lives during the COVID-19 pandemic. Delivered an all-time quarterly Services record of $15.8 billion.

  • DotDash -- revenue growth of 28%, including 33% growth in the most recent quarter, and with margins expanding. We’ve stuck to our knitting publishing evergreen content of exceptional quality to answer specific questions or solve specific problems, always placing the user’s needs first. The market is now also coming our way structurally. More privacy and less tracking now matters. Our properties work for advertisers because we don’t need any personal user information to know what our users need. If a reader visits a Dotdash site to plan a holiday, or a meal, or a retirement, that’s all the advertiser needs to know to want to reach them. And when we enable users to more easily transact with advertisers from our properties, everyone wins. We’ve got a wish list for acquisitions in 2021 and we’ve built the confidence to take some bigger swings, but we’re not counting on getting any deals done. Top 25 advertisers, 100% of them renewed 2019 to 2020 and spent more. The ads perform for advertisers. And we're still doing that with the fewest ads in the competitive landscape. That starts to build a real competitive moat. We're investing more in content than others, and we're monetizing it less while performing for advertisers

  • Amazon Advertising -- saw strength in other revenue grew 64% in Q4 versus 49% in Q3 and 41% in Q2 that is primarily advertising. That’s the majority of it. I would say that there has been a recovery, in advertising spend as the year progressed. The fact that we moved Prime Day into Q4 has an impact here, because again it carries a lot of clicks and eyeballs into Q4 for this time period. But I want to highlight a lot of great work being done by the advertising team. Their main principle is to help sellers, vendors, authors, publishers and partners use our tools, navigate them as fluidly as possible, and add value both for them and for our customers – and customers and get to see and find and discover new and different products. There is some things that are adding to the efficiency of advertising. We are now using a deep learning model to show more relevant sponsored products and had success with that. We are improving the relevancy of ads shown on the product detail pages all the time. And we have seen rapid adoption of video creative format for sponsored brands. All these things help checkup the conversion and the productivity of the advertising both for the seller or vendor involved and also for Amazon and makes it more productive experience with the customer as well.

  • Spotify -- Ad-Supported revenue of €281 million outperformed our forecast. We saw strong Y/Y revenue growth across all of our regions and channels as advertiser demand continued to rebound from Q2 2020 lows. The strength in Ad-Supported revenue was led by our Podcast, Direct, and Ad Studio channels, with Podcast and Ad Studio both growing over 100% on a Y/Y basis. Podcast performance benefited from strong underlying demand from advertisers with a 50% increase in the number of companies spending in this channel vs. Q3. We saw healthy double digit CPM gains, along with contributions from The Ringer, The Joe Rogan Experience, and the acquisition of Megaphone (closed on December 8th). Streaming Ad Insertion (“SAI”), our targeted, impression-based podcast ad product, is now live across most of our Owned & Exclusive (“O&E”) portfolio and available in four markets (US, Canada, UK and Germany). Our Programmatic and Direct channels increased 12% and 7% Y/Y, respectively, due to a significant increase in impressions sold.

  • Ebay -- In Q4, advertising growth outpaced volume once again as sellers lean further into promoted listings to grow their business. For the quarter, promoted listings delivered over $215 million of revenue, up 57% despite having lapped a major product launch that drove strong acceleration a year ago. For the full year, promoted listings grew 86%. This product continues to grow, in part because sellers who have adopted promoted listings are seeing, on average, a double-digit sales increase. Our total advertising revenue reached a new milestone in 2020, passing $1 billion for the year. We see tremendous growth potential remaining as this represents approximately 1% of GMV, well below industry benchmarks. We expect advertising revenue to outpace volume for the foreseeable future.

  • J2 -- The Digital Media segment had an outstanding quarter, with revenues up 26% Y/Y. We saw strong growth and positive signs at a number of our businesses. In our Gaming business, IGN had a very strong quarter, as the start of the new console cycle unlocked budgets, as we hoped. We view advertising in the Gaming and Streaming Service categories as a nice tailwind going into 2021. We understood the privacy issues that underpin the decisions that you’re seeing from Google, Apple and others in the ecosystem. So context will matter, premium content will matter, trusted brands will matter, affiliations with those brands will matter, and first party data, one of the things we haven’t talked a lot about, but figures into our plan. So for the quarter, display advertising was about 38% of our revenue, performance marketing heavily coming out of Ziff Davis from a number of categories was 44% and that does dilute the subscription piece down to about 17%. So those are the rough estimates of the total Media revenue in Q4 broken down by type.

  • Fox -- Exceptional gains in advertising revenues, which grew by 14%, spurred by record political cycle, in which we generated more than $420 million of net political revenue company-wide during calendar 2020. The overall advertising strength was propelled by our FOX Television Stations, gains at FOX News Media, and the dramatic growth of Tubi.

  • ESPN -- domestic advertising revenue decreased 4% in the quarter due to lower average viewership and the cancellation of certain college sporting events partially offset by an increase in rates. Ad revenue at ESPN is currently pacing down quarter-to-date due in part to the timing of key events.

  • ABC -- at broadcasting, higher political advertising revenue at our owned television stations drove an increase in operating results versus the prior year, partially offset by a decrease at the ABC television network.

  • Disney+ -- a lower loss in the first quarter compared to the prior year was driven by subscriber growth partially offset by higher costs due to the launch and expansion of Disney+. With 94.9 million paid subscribers at the end of Q1, Disney+'s global net additions were 21.2 million versus Q4.

  • Criteo -- Revenue increased by 1% Y/Y. In partnership with our clients, the constant and safe protection of first-party data is the foundation of our identity strategy. As first-party cookies go away, and with iOS14 changes, we’ll further lean into our price position and continue to offer our clients the services they need. This would essentially have us leapfrog the competition, and we believe we’re in great shape outside of what will be otherwise a market storm. We’re also closely monitoring the impact of iOS14 changes over the coming months. it will be harder for apps to monetize those users that we might otherwise place an advertisement. We're rolling out our SDK much more broadly with publishers. That will help us in the app environment.

  • Activision/Blizzard -- For the full year advertising revenues grew nearly 50% Y/Y. As the team continues to invest in the direct sales channel, tech infrastructure and further product innovation we expect that advertising business to deliver another strong year in 2021. King also delivered significant Y/Y growth in advertising with net bookings in both the direct and partner sales channels growing sharply.

  • Zynga -- Advertising in Q4 was also a key growth contributor, driven by strong seasonality and advertising yields, as well as an excellent performance from Rollic in its first full quarter at Zynga. Investing in new technologies and solutions to build an advertising network. At the core of Zynga’s live services platform is our first party data network, which captures key insight about how our players are interacting with our games. We use this data to deliver highly engaging, interactive experiences for our players, optimize our user acquisition and determine how best to monetize our games, including advertising. We delivered record advertising revenue on bookings of $117 million, up 47% Y/Y. From an advertising perspective, our guidance assumes that the upcoming changes to IDFA will create some pressure on advertising yields, but we expect this impact to be short lived. Our teams have multiple strategies that should more than offset this potential headwind, including yield optimizations, and the opportunities to expand our advertising inventory.

  • Shopify -- which powers the websites of direct-to-consumer e-commerce firms, nearly doubled its fourth-quarter revenue to $978 million. For the full year, Shopify’s revenue nearly doubled to $2.9 billion. Shopify is at the heart of our merchants’ businesses with entrepreneurs around the world trusting us with their livelihoods. This year, we are doubling down on creating a frictionless path to successful entrepreneurship, as we continue to build a future-proof commerce solution to serve generations to come.”

  • Walmart -- Alternative revenue streams like advertising and Walmart Fulfillment Services are gaining traction and are expected to become a larger portion of profit growth in the future including FY '22 along with a fairly steady gross margin rate. We have a rapidly growing advertising platform, which should be a multibillion dollar business in the very near future. We've got all of the things available to us related to eCommerce growth and digital growth. And the reporting we provide for the investors in our advertising program is there. And we can show you that down the road if a customer decides to come into a physical store, our store and buy it, we can connect those dots for you. That's the unique proposition of our advertising program. And we just haven't been that aggressive with our site and app. 5 years from now, we expect to be well within the top 10 advertising platforms in the U.S., ahead of big players like Hearst, Fox and Twitter. And Walmart is one of the biggest buyers of media in the country. We understand the relationship between advertising spend and business returns. So we know what marketers want. And we are excited about the potential for a high margin advertising business, Walmart Connect, which we expect to grow by 60% in the coming year.

  • Discovery -- Total revenues of $2,886 million were flat compared to the prior year quarter. We have now surpassed 11 million total paying direct-to-consumer subscribers globally and are on pace to be at 12 million by the end of the month. Advertising was flat as higher pricing and the continued monetization of content offerings on our next generation platforms were offset by secular declines in the pay-TV ecosystem and lower ratings. We now have over 100 advertisers and brands on the platform in the US and we expect to double that by the end of Q2. Our team is working hard at implementing our feature rich product road map. We are now offering contextual keyword targeting, and interactive ads will roll out by the end of Q1 with pause and binge ads scheduled for Q2. And as the subscriber base further scales, the benefits of combining the intelligence and data-mining capabilities on our end, together with advertiser first party data will represent a significant opportunity for us and our advertising partners.

  • Magnite -- Revenue was $82 million, a 20% pro forma increase Y/Y ll now shift to give a brief update on our efforts with respect to identity solutions. As you're aware, third-party cookies and IDFA's are going away. We believe three primary identity solutions will co-exist and complement each other to replace the current landscape and we're deeply involved in the development of all three.

    • First, and particularly important to us publisher first party data segments that are created within our Magnite marketplace and can be bought at scale across a large number of publishers to find desired audiences.

    • Second, open source identifiers such as offered by the Trade Desk and LiveRamp that are based on logged in users will play an important role in the market. We're particularly pleased to see the Trade Desk announced that its Universal ID 2.0 will now live within and be operated by Prebid, an independent organization that we co-founded which is designed to ensure and promote fair and transparent marketplaces across the industry.

    • Third, the Privacy Sandbox from Google Chrome where the browser preserves identity and creates cohorts or groups.

  • Viacom -- Q4 results, where total company revenue was $6.9 billion, up 3% Y/Y advertising revenue grew 4% Y/Y, driven by an acceleration in streaming advertising growth and strength in political. Notably, advertising revenue growth in the quarter improved significantly versus the 6% decline we experienced in Q3. Affiliate revenue grew 13% year-on-year in Q4, and acceleration compared to our Q3 growth rate of 10%. We ended 2020 with 19.2 million domestic streaming subscribers, up 71% Y/Y In the domestic free ad supported streaming TV market, Pluto continues to be the leader. We closed Q4 with 30.1 Pluto TV MA used domestically and 43.1 million globally. Moreover, based on publicly available information, Pluto TV is not only the leader in MAUs, but also leads in total viewing hours and revenue.

  • Gannett -- the Publishing segment revenue in the fourth quarter was $794.2 million. Within that total, print advertising revenue decreased 26.9% compared to the prior year on a same-store pro forma basis, reflecting continued secular pressures as well as the disruption from the pandemic. Digital advertising and marketing services revenues decreased 2% on a same-store pro forma basis driven by the disruption from the pandemic. Digital advertising and marketing services returned to Y/Y growth in December and improvement in the quarter was largely as a result of national digital growing 29% Y/Y on a pro forma basis. Circulation revenues decreased 13.6% compared to the prior year on a same-store pro forma basis, which reflects the ongoing pressure of the pandemic on single-copy sales during the quarter, which remain negatively impacted as a result of lower travel and consumer activity. For the Digital Marketing Solutions segment, total revenue in the fourth quarter was $107.3 million, a decrease Y/Y of 10.3% on a same-store pro forma basis, which is a significant improvement from the 17.4% decrease we saw in Q3

  • iHeart -- For iHeart, the year 2020 was defined by adaptation, innovation and intense focus. Like every ad-supported business, we were hit hard by the pandemic. We responded quickly to the downturn and used this to speed our adoption of new technologies and best practices, making lasting changes to our company's operating structure. Despite the major slowdown in advertising revenue, our ability to innovate shown through this year as we worked quickly to develop new products and services and provided guidance and insights to help our advertising partners connect with their customers and tailor their messages for the unique moment, which in turn helped us mitigate some of the advertising downturn and also kept our fast-growing digital businesses, including podcasting, on track.

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