Okay, so Mark Sigorsky is the CEO of Double Verify, where he has spearheaded the company's growth as a critical trust layer in digital advertising since joining in 2020. A veteran of the ad tech industry, previously served as the CEO of Tolaria, where he managed its merger into the Rubicon project, which was then sold to Magnite prior to Tolaria. Mark was the CEO of Exalate, which he sold to Nielsen. And this is Nicola, and he's the CFO, and so we will create some questions for him on the run, which is fantastic. Glad he's here, because there's always one I ask him that he hates, so we'll do that one first. And I would just like to say as an introduction, we rate DoubleVerify a buy because its acquisition of CyBids, which does AI optimization and Rockerbox for attribution, are pivoting DoubleVerify towards high-value performance workflow optimization with broader ad tech platform economics and deeper integrations into ad campaign executions. We believe that DoubleVerify will successfully transition from vendor verification middleware to mission-critical AI advertising infrastructure, which will give them upside pricing power and accelerate their revenue growth. So that's why we really like the stock. So I want to start with a leadership question, and you're going to get to answer it too because you're on stage with me. And that is that when we think about generative AI, it threatens to disrupt a lot of jobs. So how does your notion of leadership change in this environment where there's so much uncertainty? What kind of demands does it put on you as a leader that are different now?

Wow, that's a great question that you did not send in advance. Yeah, I'm sorry.

I apologize. Am I required to answer that?

No, it's a good one.

I think AI has really upended how we look at talent, how we look at growth and innovation. That's interesting. um and and how we bring those two things together in a very different way i mean in the past when we thought about innovation it was how many engineers can we hire and how many great engineers can we hire okay and and how best can we get the most out of them okay now it's it's more focused on how do we take the tools that are out there and apply them in ways that are going to drive growth in our business but also create efficiencies which the market is absolutely expecting right yeah and from a leadership perspective what that's done is created massive fear yes amongst amongst teams yes and so the way to frame it is less as this is something that's going to take your job as opposed to this is something that's going to give you longevity in a space that's going to change rapidly if you embrace it yes and I think we've seen a really great embracing of AI within the company. And I'll tell you, when we first started, folks were, especially the engineering team, probably half of them were like, I'm not doing this. Seriously. Right? I'm a coder. I'm not going to not code. Because we told them, hey, by the end of the year, you're going to be a manager. You're going to manage five agents, and that's your job. And they're like, well, I don't want to be a manager. And we said, you're not going to have a job then. Good for you. They changed, though. You can see the people embraced it and a lot of times um you know the the normal thought was hey your senior executives are the ones who are going to be like keep that away from me i know what i'm doing but it wasn't it was it was they're the ones who embraced it first because they've seen this change before many of them had been through multiple cycles of of change and they're like if i don't embrace this uh it's the end for me so uh it's changed i once saw jeff bezos right before they're going public and they said you know you got all these guys that are about to be worth 10 million dollars each.

How do you motivate them? And Jeff Bezos said, because the best employees never work for money. But the point is, the best employees don't just work for this job. They work for something bigger, something more interesting, something creative. And if they don't, then they're not a best employee. What about you in finance? And I'm going to actually add something. So one of the most interesting things Roku's talking about, and I think they're right after you, is token cost. He says, I got everybody in my organization using tokens to try things in HR or in, you know, legal and stuff. And he says, I have no return on capital metric. Like in coding, I can put a return on capital metric. But my costs are going through the roof of these tokens, and they aren't telling me in HR how this is making me, the CFO, more productive. So talk about how you think leadership, but also this cost notion that maybe tokens need to have a capital spending cycle around them and put budgeting and legal, you can use this many. So they're forced to prioritize. But talk to me about that.

So we are actually doing that, which is we are managing the use of tokens centrally through our technology group. So that it is spread across the teams in a way that is manageable and that we can monitor. So right now we're just taking a look at where exactly it's used. Is it used in a way that is efficient, that it's actually accelerating our own product, our own efficiencies, rather than just letting everybody try it out and seeing what happens? I think in terms of the responsibility of finance around these tools, we do need to try them, and we are trying them. And the ultimate result of using them will be a higher, more efficient business model, which we're already showing the signs of through our first quarter results of the year. So there will be an ultimate measure to see that it's actually happening. But the way we're rolling them out is in a more centralized fashion.

And I'll just give you the Fubo answer. He said, from now on, I don't look at resumes, anybody for interviewing new people. He says, we put them, I expect them to make a video using generative AI tools to make an app and then explain in the video what they did and why they did it and why it's useful. He says, because the two skills I need are people who can actually use Gen AI. My next employee needs to be able to use Gen AI and explain to people why he used it to do that and why it matters in English. And he's like, I'm back to generalists. I don't want point solution people. I want generalists because I don't know where Gen.ai is going. I just thought it was an interesting way to hire your next guy.

Maybe you can't impose it on your current guys.

I thought it was an interesting idea. Okay, so let's talk about how does DV remain independent while integrating deeper into the walled gardens? Because some of your fastest growing stuff is sitting within Meta or sitting within TikTok. And it feels to me like this gravitational pull to the big pools of money that are sitting in walled gardens does threaten your independence or trust in your brand as an independent brand?

So our role in the walled gardens is exactly the same as the open web, which is exactly the same as the wall in streaming, and it will be the exact same role that we have on the LLMs, which is that as an independent trust layer. Just because we're analyzing something behind a wall doesn't mean we're not objective in doing so from a way that has only our advertisers' desires at the forefront. So that role doesn't change. And I think it's critically important because that's why people are hiring us. They're hiring us because they need trust in those platforms. They've seen their ads run against stuff that they don't want it to be. And how, you know, look, the reality is how can you trust someone who's selling you media to tell you it's good? Tell you that it's good. CBS, there's a reason why Nielsen exists, right? Because if CBS came up with their own ratings and said, hey, buy against my ratings, who would trust them? So I think our role there, and as you noted, it's an increasingly growing role, is important. The first, last quarter, we grew our social activation business by over 90%. We grew our social measurement business by 23%. So we are leaning in there. There's demand for the solutions. And I think our innovation and our products are just catching up to that demand.

Yeah, okay, fantastic. Retail media, CTV, two biggest TAM categories for Double Versa. How do you prioritize resources, and which one will be bigger in three years from now, do you think? And this can be for both of you.

Yeah, so, I mean, we've leaned really into streaming right now, into streaming television as the bigger opportunity for the two. And maybe not for the reason why, you think. okay um you know first of all you know streaming we barely scratched the surface on i think our opportunity there we mentioned that our ctv impressions grew 28 last quarter um and you know we still have strong kind of growth trajectory there our products are catching up there we've launched verified streaming tv which is a pre-bid and post-bid application that ensures that ads are being run in high quality full episode players, not like on a mobile gaming site or something like that. It's running in Hulu. It's running in Paramount. We created a product called Automated Do Not Error Lists, which give the advertiser the ability to avoid specific programs or specific genres of programs.

Or Gen AI? Or is that a different product? That's a different product. Okay, sorry.

But this is specifically around streaming. We launched that through trade desk and it actually doubled the attach rate um on trade desk of our abs product because you buy the do not error list through uh abs um which was pretty significant in a quarter in less in less than three months now we went we're starting from a low rate to a higher rate but it was great so i mean the reason why we're leading stream to it we just think there's a lot more of a gap there for what we can deliver clear market need to what we've been able to deliver in what we can deliver now and kind of what our attach rate is there okay okay all right and retail media really does retail media network just have an outcome so people don't really attach as much to the double verified products i mean if you look at some of our biggest retail customers are folks like walmart and amazon which are also the biggest retail media platforms and amazon um is interesting i think last stat i saw something like amazon's like 80 of the retail media network business yeah that makes sense to me um i guess higher actually yeah so it's huge and we work with amazon as a supply platform as a demand platform through the dsp and as an advertiser okay so on all different aspects right so that part of our business is really growing but when you talk about retail media for us it's really about amazon okay and um and we're meeting kind of all of those demands i think the interesting thing about our amends though which I don't know if people are fully starting to embrace. An RMN is basically just a giant retargeting network, right? You're taking data from a site and then they're using that data to retarget somebody when they leave your site. If you're Best Buy, if you're Target, that's what it is, right?

I thought an RMN was, a retail media network was sort of, I spend an ad dollar and I can actually just have an outcome of an actual physical sale at the other end. And that's what the RMN did, is it tied the ad dollar I spent to the actual outcome of a sale.

It's part of it, but the money comes from me as Best Buy, me as Target. Right, that's the ad dollar. Me as whatever, saying, you came to my site and you looked for a television. Now, Sony, I'm going to sell you that same user someplace else, and I'm going to extend that data or that impression off-site. that's where the money comes from in retail media the spend of impressions or dollar impressions based on data that I get from that retailer okay that's so but if you think about that they're buying impressions off-site most of that's basically mobile online video or display it's not right in a walled garden that's right that's true that is that that business is slowly going to be starting to be eaten by the LLM's who are going to be focused on commerce yeah So I think a lot of retail media is moving to the LLMs.

Oh, that's interesting. Oh, that's pretty controversial.

So that universe, I think, is going to start to become an LLM universe. That's interesting.

You think it's cannibalized first by the LLMs?

The media part of that, for sure.

Okay, interesting. So let's integrate you into our play here, Nicola. When you think about your prioritized, do you prioritize by product category? Like, how are you guys prioritizing in the back office?

In terms of product development? we're prioritizing by the channels where we're not yet fully penetrated which is like OTT would be social and CTV okay really the ones where we we spent a lot of product development resources last year to launch the products they're not in market yeah the one that's growing the fastest is social activation yeah sure they're now in the market and I've already mentioned the 90% percent so that that's where we're prioritizing the product development and of course the background we're also getting ready for uh verification on the ai platforms on the ai platforms on the ai platforms is that like open ai is that what you mean exactly okay is a is open ai letting you in uh that sounds like a no yeah we we can't talk about anything that's not been

publicly announced yet gotcha okay but we've mentioned on our calls that we're in conversations with LLMs around advertising.

Since Claude doesn't have advertising, it narrows them down. And we're not letting in Google.

I mean, our perspective is this. When we talk to advertisers, they expect us to verify media transactions everywhere they spend. Yes. And it started off in the open web and then moved to programmatic and then to social and then to streaming TV. The next phase will be LLMs. They've made it very clear to us and to those LLMs, for them to move beyond test campaign budgets, they need verification. When Reddit went public, what did they say? We want third-party verification. When Netflix started selling ads, what did they say? We're going to have third-party verification and measurement ends. So they called us. They called Nielsen. It's just history repeating itself.

So long as you have brand advertisers. I do not think you need it if it's SMBs, because they have clear performance or outcome orientations.

You know, look, I think if you look at every platform has some percentage of brand advertisers, right? So even the social platforms have 30%, 40% on brand advertisers.

Yeah, because I would have said Meta didn't need you because they do all SMBs. They have 10 million SMBs, but you're right.

Right, but they have 30% of their billions in revenue. I mean, you look at someone like P&G. P&G spends a billion dollars a year on YouTube. That's crazy.

A billion dollars just on one platform. That's crazy, and that's just P&G.

Yeah. So, you know, you have to assume that there's going to be a decent, and if you go to, you know, some of the LLMs now and look at the advertising, there's big brands there. We've seen brands there.

Well, and OpenAI doesn't have the capability of doing granularity. They have to do big brands, almost like a, it's almost like a billboard sale.

Like it's, you know, they've made recent deals with demand generation companies, right? Cargo and Pacview and Criteo because they're trying to attract dollars from brands to spend across their platform. They don't have a sales infrastructure. Yeah, that's true. So, you know, we, and we know we have dozens of our current advertiser brands who are testing campaigns across the LLM. So we just feel it's, you know, it's inevitable at some layer, at some level that, you know, verification will come there driven by advertiser demand.

And by the way, Claude saying hell no. And I'm like, I've heard this with Netflix. Like, it's not a thing. Like, ultimately, you guys need money. And advertising is targets a whole part of the US that likes less than $70,000 a year. That's where advertiser targets. You just can't ask people to pay a fortune. That's the top half of them. But you need to reach everybody, and that means you need advertising.

Especially outside the U.S. Remember, Netflix hit the wall. It's when subscribers started to slow in the U.S., and they moved outside the U.S., and you can't charge somebody in developing countries, Southeast Asia, $24, and spend $20 billion on content a year.

But even here, almost all of their new ads are here, ad-driven, because people have seven streaming services and they want to pay $10 for Netflix, not $24. So it's not only offshore, but I take your point about the slowing.

As you expand into markets where you can't pay $19.95 a month, You must have an ad-driven option.

Well, and also to me, it's more fair because if you have a hit piece of content, why are you paying a fixed price to something crappy? Like advertising allows you to make a little more money when you have Stranger Things and it blows everybody away or some breakout hit. And same with sports. They now have five sports, in this case, five different live sports for the NFL. If you have programmatic, if you have advertising, you get to capture the upside if it happens to be a great game. Whereas if you just have a flat subscription fee, it's like the consumer got too much value in that particular month, in a sense. So I like the combination of the two, like a downside protection layer of subscription and then an upside warrant from advertising revenue. if you do a really great job at your core business, which is making content. So, but anyway, okay, great. Let's go to social and do activation and measurement products on Meta, TikTok, YouTube, Snap. They continue to grow at double-digit rate. And does growth slow? Are we in one of these periods, sometimes you guys have this fabulous first year or fabulous year because you have a new product, but then it sort of goes to, like, normalized growth rates of sort of single digits? Do you see that happening in social?

I think we have a while to go before we see that kind of pacing. You know, we just launched our social activation tools on Meta early last year. And to be honest with you, like, the V1 of that was not even close to where we are today. So the tool's advanced. You've seen an acceleration in revenue on social activation in Meta. We just enhanced our TikTok activation tool. That's gotten better.

And want to explain to the audience, activation versus measurement, how you distinguish between that.

Yeah, so think of activations, what we call pre-bid. So it's actually filtering out a violation before you even buy it, before you bid on it. And measurement is what we call post-bid. So I've already bought an impression someplace, but we have the ability to block the actual rendering of that. Obviously, advertisers would prefer not to buy it first than they would to try to get a make good from a block and get money back. So activation is pretty new for us on social. We just started kind of scaling it and launching it over the last several quarters. But what we found, which is what we saw on our open web, our activation business in the open web is significantly larger than our measurement business.

Makes sense. Because they don't want the ad to run next to inappropriate content.

So right now, our activation business on social is smaller than our measurement. Our measurement business is half social, half open web right now. And that was, you know, how much was that last quarter? 60 million bucks. Yeah, 60 million bucks in measurement, right? But our activation business is considerably smaller than that. So we see activation continuing to grow on the social side to where a ratio that we see in the open web is similar, where it's almost twice as much revenue from activation as we do.

So one of the things I remember when you guys did the pre-bid product is I was very whining at you about why can't we raise our price from $0.08. And you said, well, the good news is in order to buy a pre-bid product, we require you to post-bid product, right? So you're calling them activation of measurement. But do you do that in social, too? They can't buy the pre-bid product without buying the post-bid. So it sort of doubles your take rate, in a sense, because you're right.

The systems work together. We catch violations in measurement, and then we filter them out in pre-bid.

And if they have just a post-bid, let's call it measurement, which is your word, what is the benefit they get? Like, on average, how much does it save them? How much does this measurement number go down for the fraud when they add a pre-bid to it?

So we see anywhere from kind of like 3% to 6% or 7% percentage point increases in suitability, for example, by using a pre-bid filter. So if you were at 90%, you know.

You think, so you start at 90 and it goes to like 96%.

96%, 97%. But think about that. If you're running a campaign that has 100 million impressions, six percentage points is a lot of impressions that you're keeping away from stuff. So it's incredibly valuable. And we see those rates going up and the product getting better over time. The product learns, right?

So we're getting all this crap. Let's call it AI slop, by the way. I use that term because you guys call it a product AI slop. On the data panel this morning, I'm like, we should have data slop because there's too much data. Data's confusing it. but at some point it doesn't add value. I'm like, well, let's take AI slop and apply it here to data slop. So it's just a good, it's a great title. You guys made a product of AI slop.

Slop stopper, man.

Slop stopper, I love it. But on this point specifically going from the 90% to 96%, when you have a slop stopper, or when you have more slop, could this 90% be structurally under siege going towards 80%?

Because generative AI is going to make so much more content that's just you know bad not viewable or is it a different you know that's i mean look the volume of challenging content continues to grow yeah right and but our filters are still our filters right you're just jamming more into them they're still identifying everything right so volume is never our product problem okay sophistication for example around ai cyber fraud which is becoming more challenging. We saw 140% increase year over year in fraud variants between Q1 of 25 and Q1 of 26. Think about that. 140% increase. And what does that mean? That means there are more fraudulent attacks using AI. These are like bot attacks, things like that, than we've seen year over year. It's becoming more sophisticated. And this is where there's good AI and bad AI, right? And that AI is being used to spoof impressions, spoof advertisers, steal dollars. That's beyond quality and suitability.

It's actual fraud. True fraud. I mean, it's like true fraud. Okay, and is it coming from offshore? Is it state actors from offshore, which is what I assume? Okay, so it's not bad actors in America.

This is not a kid in his basement. These are sophisticated. No, because people sometimes think, like, oh, this is like sophisticated.

Some 15-year-old that's taking time off from his lunch break to do fraud in the end.

There's always that, but these are sophisticated criminal enterprises. They spin up literally thousands of servers. This costs money to do. So they spend money to steal money. And this is a multi-billion dollar industry. Billions of dollars get lost every year.

Wow. Not from advertisers who use TV. That's really great. Okay, so we're going to continue to grow. The answer was we're going to continue to grow at double-digit rates. And we're going to continue to have monetization. Okay, so, Nicola, starting with you, then we'll do you second. How are you using AI today to lower costs, and how much AI-driven productivity gains will be reinvested versus being allowed to expand your margins?

So how are we using AI to lower the cost? on the efficiency of what we do in terms of how we classify content. AI is allowing us to do it faster and for more content at a more efficient clip. And that's part of the way we've maintained gross margins over 80%. So that's on the top of the funnel in terms of what we classify. Below that, we're able to, what we said at the beginning of the year, is we'll be able to grow with fewer employees. And we've already started to see it at the beginning of the year. And we'll end up seeing it at the end of the year. and the ultimate result is that our margins are growing. So in Q1, we had 31% margin. It's the first time we had a margin over 30% in the first quarter. So we're seeing the results at the bottom. We're obviously being responsible on how we're doing it because people still need to trust us. So we're using the AI tools in the right way to classify. But the efficiencies are great. They're large. Up until now, we've always said we're going to continue to invest and reinvest in the business. That's not changed for us, except that the way we're able to do that creates a lot of efficiencies, which is why we're able to expand margins.

Okay, and I'm glad you're managing tokens. I think a lot of CFOs are not doing that yet. So you're really ahead of the game on the token cost. What are you seeing, Mark, maybe on the product development side in terms of... By the way, I will say there was a time there where you guys were super innovative on product and then everybody went to sleep for three years. And now it feels like you're back in the new product introduction game. That's how it feels to me from the outside. I don't know if you see it that way.

I think, you know what it was, the innovation was done incrementally and we were doing things around the edges as opposed to big swipes and big hits. And I think that's where we've moved to now, which is like taking on big challenges like streaming TV and transparency around streaming TV. And Gen AI Slop. Like Gen AI Slop. Like, you know, social and, you know, the opportunities within social. So I think, you know, we mentioned last year, at the end of last year in the call, like, we launched more products in 25, like, in two quarters than we had launched in two years before that. And I think it's, part of it has to do with...

Why would you ever work on incremental if you can work on a big new category?

I think, you know, we still saw a big pool of money there that we could go after, that just tweaking things and investing, you know, small. Now, it wasn't like we weren't doing anything, right? We were building the base layer from which we could then launch deeper into social, deeper into streaming. But I do have to say, over the last several quarters, AI tools have allowed us to do that so much faster. Nicola mentioned classification. We can classify content 2,000 times faster now.

That feels like a cost thing, not a new product thing.

It's cost, but it allows us to expand to new languages faster. And to new markets faster. So we employ semantic scientists. We employ linguists and translators. All of those roles are now being done by AI. I don't need to have someone translate text and label it and then put it into a model. I have AI doing that. We're going to be down 100 contractors this year by just using AI to do labeling as opposed to having humans do them labeling and feeding our models. So it's driving efficiency. It allows us to move into markets faster. It allows us to test products faster. So, you know, we're now building natural language interfaces for customer service, right? In the past, we'd launch that on a normal pace where it'd be like, okay, let's do a beta, which will take us six months, then get it to a customer.

Why do it yourself? Aren't there guys off the shelf that you can just use theirs day after tomorrow?

Well, I'm saying that's the old way. No, because we can use AI to actually build prototypes very quickly and launch it.

And we don't use off-the-shelf stuff because when you rely on third parties, that's not your own product. then you're tied to them forever we build our own stuff but it takes longer to get to market then and you have to prioritize not anymore not anymore okay fair enough um okay um so we i have one ceo that is saying and maybe you don't care because you guys are sort of hedged but he's saying that programmatic rails are going to be replaced by agentic rails and he says over time but what he means is like three years like in time isn't like a 10-year idea right do you guys agree with that in your neutral position you sit at you know no matter how someone buys or sells media we're kind of indifferent right as long as our solution set is there as long as you know we're verifying that

transaction we're kind of indifferent how they buy or sell in this case though you know what's really interesting is think about how folks used to buy with a piece of paper that's true and they i have a lot of media still bought that way it's crazy they bought with an io and then they bought an insertion order which looks like a trading ticket like this and you hand it with the video to the company you want to run the ad right and then it moved to programmatic yep right now programmatic ate everything and like 85 of display and 85 of mobile is programmatically bought yeah but it'll become agents right our role is still going to be the same and the interesting thing about agentic buying which um if you thought programmatic was going to be fraught with challenges and opacity, think of an agentic world where I'm like, because everyone's like, you don't need a DSP anymore, you're just going to send your agent out to go buy media, right? That's true. And then I'm Netflix, I'm going to send my agent out and we're going to negotiate, those agents are going to negotiate. Guess what's going to happen? What? That universe is going to be flooded with fake agents. Flooded.

You know that fraud we were talking about? Yeah.

There's some kid in his basement right now creating an agent.

And that agent's going to sell media.

And it's going to look just like a Netflix agent.

Right.

And it's going to say, hey, you know, Procter & Gamble, $30 CPM. Yeah, don't you want to buy this? And they're going to be like, this looks legitimate, but how can I tell? Because we're going to be able to tell. Right, right, right.

The more fraud there is, the better for you.

We'll be able to tell because we've already built a tool called Agent ID, which is the first iteration of kind of giving advertisers the ability to understand what the role is of that agent and who they're at is interacted with. But the next stage will be when agentic buying truly scales is playing that same role. Is this person really selling you a safe page? Is this person telling you?

A page at all.

A page, right. Is it safe? Is it viewable? Is it viewable? All those things. We're just going to be employing. And so we joined ADCP, which is the standardization group. We're involved with the IAB standardization group. But we'll be agnostic. Whatever protocol someone uses, we'll build for it. And, you know, but we're going to play the same role, which is, hey, you need to stop here and we're going to check it first.

So one of the big, and I really do want to, is trust. Like, does trust in an AI world become more valuable?

I mean, I think it becomes as valuable as, you know, when you continue, we're continuing to move people out of the equation, right? That's true. We just said you went from a person you trusted sitting across the table from you to then a machine to then buying through a programmatic platform where you had no idea what was happening. So transparency is always going to be an issue as you bring more machines to it. Efficiency is there, but who can you trust? And I think that's the role we play, which is driving trust and transparency in opaque environments. And I'll give you a good example of where this comes to play.

I like sort of that tagline.

So think of meta. we started talking about social platforms yeah we did meta has an amazing product called advantage plus which is a black box solution that you put your money into and it guarantees you an outcome right um you don't know where it runs you don't know how it runs you don't know the context it runs but they'll say look we'll get you this many clicks we'll get you this many conversions and it's doing quite well however there's no transparency in it right right so when we see campaigns running on meta using dv measurement verification the attach rate is twice as much on advantage plus campaigns as it is on non-advantage plus campaigns that means when you're buying into a black box people are relying us on twice as many attach rates twice as high okay because they want that transparency okay so the more things move to black boxes and just trust me outcomes the more they need transparency and they lean on companies like dv okay right and the the more fraud there is, the better it is for you.

Because you're like an insurance policy. You're like a low-cost insurance policy.

We, yes.

One of the things I've really liked, as I've told you a million times, is this move towards a percent of take rate, like a take rate that's a percent of media. So let's talk, and I don't think you guys talk about this as much, but talk about, because of SciVids and because of some of these new products you're introducing, you're sort of getting, I would call it a dual revenue stream, where you have, let me call it a subscription fee, which was like, it's really a fixed fee. It's not a subscription fee. It's a fixed fee. Round number is like $0.08 or $0.14 per thousand impressions. Now you're going to a percent of money spent, which I think has more upside. But can you talk about the dual revenue streams and how you think about those?

Yeah, so on the optimization products, it makes plenty of sense to be on a percent of media, right? It makes a lot of sense because you're showing an immediate return on your investment and what we're able to optimize for the media part of the business. That is the one that we are pricing directly on a percent of media. The rest of the business is still, as you said, a fee. We receive a fee per impression that we're measuring and verifying for the advertisers. That is the model that we like for where we are today, which is we are still penetrating new verticals. We're still penetrating new platforms where, for us, it's very important to be very simple for the advertiser. So rather than having a negotiation every time there's a new product that's available, it's a very simple fee per impression, and we just tack on more and more products to the impression. It creates a very simple upsell motion for the client with our new products.

Why is that different from a 10% take rate or a 2% take rate? Just as simple.

Because every platform is not the same. It would be not everybody's thinking of what they're spending on social the same way as what they're spending on the DSPs. It's generally not necessarily even the same budgets, and so the conversations are different. And it's easier to just say, this is how much we are charging you per impression that we see per channel. And it will vary by client. It just makes it very fluid and very simple. I think once we end up in a situation where we are upsold into all the channels, then we'll have a better opportunity to differentiate the price based on the CPMs that they're actually paying.

But the debacle in this was the $0.08 when you went to CTV. You never were able to raise the price when you went from a $2 CPM to a $0.20. So you were stuck at the $0.08, which is one of my big complaints because you just walked away from all this excess value. And you've never been able to raise the price. You keep saying, oh, we're going to do it, we're going to do it.

No, you still haven't. So part of that was the value prop on CTV versus other video versus social. I think we're now leaning into having that value prop that gives us greater ability to raise prices. We have raised price on video versus display. We think there's the trifurcation opportunity as we've launched new tools like verified streaming TV, like the do not air list. So there is an opportunity to increase price there for sure.

If simplicity costs you 10x, that wasn't the best economic decision.

Well, again, it's not just simplicity, but it's actually the attach rates and the value of the product that we want it to go for, right? Because, you know, most CTV is now is bought by PMP or PG.

Yeah, which is private marketplace or programmatic guarantee.

And, you know, there's a little bit, you know, our value prop there is a little bit less defined when, you know, I'm directly buying an impression from Hulu. right but when as more ctv inventory comes into the fold as it becomes more opaque as these black box solutions come into play yeah our value starts to increase which means we have more room to start to raise prices there as well okay questions from the audience any questions for market okay from the audience okay great okay um okay um when you think about staying on this issue of rev shares When you think about share of revenue versus fixed fee three years from now,

this is a growing segment, I assume, what we're doing over at CYBID. So, you know, how big do you think that could be in three years?

Well, if you think about where our target for CYBIDs by 28, 29 was like about $100 million in revenue. So $100 million out of a billion by that time. So 10%. 10% or so. Now, we have a new catalyst around that, which is the product we launched kind of late last year, which is Authentic Advantage for YouTube. That's a combination of a pre-bid filter, a post-bid measurement, and then side bids as the sandwich in the middle. We mentioned on the call that's growing really well. It's at $10 million plus run rate right out of the gate. We see that now we're expanding that to TikTok and to Meta as well. so you know that could also positively influence how fast that because that's a percentage of media there's a piece of percentage of media sure that as well that will positively influence what percentage of our business goes there and okay as you will like yes you know youtube is video it is right cpm's are higher there they're not ctv video impressions but they're they're higher yeah so we have a chance to get a bigger chunk of that than just our straight you know pre-bid And what I would say is the goals we have that are stated is 50% of our business being social, CTV, and then AI when it comes.

Right now it's less than 30%. Whether it comes because of a percent of media or not, the goal is to penetrate the channels where we just launched our product. So there'll be a motion there. Whether it's held by percent of media or not, I think we're more set on just making sure we are where the advertisers are advertising. And now that we have the products, we're on our way to reaching the goal of 50% being social, CTV, AI. That's more of an operational goal that we have in terms of diversifying our business and going where the dollars are now that we have the products.

I see. Yeah. I really love all the new product innovation. I mean, it must be more interesting for you guys, too.

It absolutely is. I mean, look, as Nicola, it's like we need to go where the advertising dollars are going. And that's where they're going, those platforms.

Well, and on that, just listening, like one of the things somebody said on stage is the problem with trade desks is they stop listening to their customers, you know? And I think when you listen to your customer, where advertising dollars is going is code for, we're listening to our customers, you know?

And, you know, we have to, like, we don't need to be the first ones there because there's always, remember Clubhouse a few years ago?

Remember Clubhouse? No, I don't.

It was like a collaborative audio thing. Everyone jumped into, this could be the next big thing. And we're like, should we be building for that? We're like, yeah, let's hold off a little bit. and then, you know, no real advertising dollars followed. So we follow the ad dollars. And if they're like, hey, we're going into the LLMs, then we will be in the LLMs.

Right, right, right, right, right. Well, that makes sense. I mean, that makes sense.

That's how we make money, right?

Yeah, that makes sense to me. So measured transaction fees have been falling, and is this pricing compression structural, consumer-specific, competitive, or tied to discounts for new clients only? Why has the average price been falling?

So this is a story of mix. We're going in categories where the price for the social product is not yet the price that we have for mobile and online and display and video because we're just launching the products. The price on CTV is still the same as video because we're just launching the products, and we are not yet at a point where we can charge a premium for CTV versus a regular video. So what you're seeing on the MTF is really just the mix of the business. As we grow, as we penetrate, especially on activation, you should see an impact positively on MTF. I think the number that we keep a close eye on is revenue per client, right? So the top 100 were per client. Yes, the top 100. That was $2.6 million in 22. It's $4.5 million in 25. Good for you. So that's like scaling. The fee is an output of that, which is we're scaling the opportunity with the clients wherever they're spending their dollars.

So you're doubling your average spending per client, but you may be tripling their impression growth, so it looks like a lower MTM in a sense. Okay, that makes sense. Okay, I'm going to call it there because we're out of time. Thank you so much.