Hello, everyone. I'm Andrew Boone. I cover Internet here at Citizens. I'm very pleased to host a conversation with Tim and Chris Vanderhook of Viant. Thank you guys so much for being here and supporting the conference. Let's just kick it off, right? You guys reported Q4 results last night. It was a good quarter. For those that are a little bit less familiar with the story, just give us an overview of what you guys are offering to marketers. What is the Viant platform, and what are the solutions you guys offer?
Yep. We do what our ticker symbol is, DSP. We're a demand-side platform, so we represent the buyers of digital advertising in that transaction. We don't represent the seller. We help buyers place their ads in streaming television, mobile devices, digital out-of-home boards, anywhere electronically. We help them in real time buy it. Our biggest competitor, much bigger company, more well-known, is TTD, The Trade Desk. We are an identical business model. We service the mid-market. They're really focused in the Fortune 500, I would say, international global operations. Yeah, it's a digital ad-buying platform.
Just one point, if you're not super familiar with the story. DSPs, there's only four of them in the world, truly, that are self-service, meaning a marketer can log in and self-direct all their activities. That's where the entire market's going. That market's growing about 13% a year, programmatic advertising. There's only four companies. There's Google, there's T he Trade Desk, there's Viant, and then there's the Yahoo DSP. Only two of us, us and The Trade Desk, only represent the buyer.
The other two, Google and Yahoo, represent both the buyer and the seller of advertising. We believe that's a conflict of interest. These are great businesses, though, DSPs. Once you get a customer who knows how to use your software, you get lock-in, and they're very, very sticky. Every year that they're on your platform, they spend multiples more every year. It's an incredible business. In programmatic advertising, the buy-side is certainly the strongest side you want to be on.
All right, so let's go a little bit more near term.
Yeah.
Right. There have been a lot of questions around 4Q about just the advertising environment overall. CPG has been certainly a kind of persistent question. How do you guys perceive the advertising kind of macro as we sit here today?
I would say it's strong. I mean, look at our fourth quarter results. Revenue was up 40% year- over- year. Adjusted EBITDA was up 31% year- over- year. We exited. That was the biggest print of the entire year, so accelerating metrics there. If you look at our, granted, there was political that came in Q3, Q4, so that was like 300 basis points of growth for us. Kind of top line, contribution ex-TAC, which is the money we keep, think of it like a net revenue calculation, was up 28% in the fourth quarter.
We exited the fourth quarter. Q1 seems to be macroeconomic healthy. I would remind everyone, advertising is the canary in the coal mine for the macro economy. When things are starting to get bad, advertisers pause their ad spend if they think consumer demand is not going to be there. We have seen strength really throughout Q4, exited the year, and Q1 seems to be very stable.
Good. Sounds good. All right, let's bring it down to you guys, right? I want to start off with just mid-market in terms of the strength that you guys have had there really over the last two, three years, through the history of the company, really. Talk to us about what's the difference of a mid-market agency? What's different about them versus maybe some of the big holdcos ?
Some of the bigger companies out there, if you think of The Trade Desk, these guys, Tim said Fortune 500, but really like a Fortune 100 is their focus. These are the P&Gs and the Unilevers of the world. They sell toothpaste and toilet paper. They're not the most data-driven marketers. You don't need to target to sell people toilet paper. Makes sense.
No targeting needed.
None. If you look at that, that's sort of the top of the market, the largest brand advertisers in the world. Where we are in the mid-market, that's a US-based national advertiser. You spend between $100 million-$500 million a year in advertising. They get Nike, we go after New Balance. They go McDonald's, we go Whataburger, Sonic Burger. They need, when they spend money in advertising, they need it. If I spend another dollar, this is our customer, I spend another dollar in advertising, I need it to drive another sale. That's us right there.
Just a huge difference there. When I think about who represents them, they're predominantly represented by independent agencies, but also they are in these hold cos as well. Really, it's about tell me what I get for my money, but they still want the same thing. I still want to self-direct all my activities. I want to control everything. I want full transparency. We offer all of those things, but our platform proves it every day on what I'm getting for my money.
Let's kind of double-click on that in terms of the performance aspect and how you guys are able to do that. The Household ID would be my quantification of what you just said, right? 50% increase last year. Talk about the drivers of that increased adoption. Is that more push towards performance, or what's driving that number?
Yeah, I mean, for us, we look at the Household ID as the linchpin of our technology, and it's a patented technology as well. It's not just proprietary. We've had the patents in it. Household ID, just to take the mystery of it, it's your home address. And then we want to know if we show an ad when someone's watching Yellowstone, did anyone in that household buy the product or service? That's how we're able to create closed-loop measurements so advertisers can understand the return on ad spend. And that's been a linchpin. We can do this across 80% of all the ads that we see, just the requests for a buyer. We see trillions of ad requests coming to us every single day. It's been a huge linchpin. What do marketers care about?
I need to show ads to people who are highly likely to buy my product or service, and I need to measure what I got for my money. Without Household ID at the scale that we have it, none of that is possible. We own, I think, 13 patents around the Household ID. We believe we've got a great moat, and it sets up for that closed-loop measurement system. It becomes like a video game. If I know every dollar is driving another sale, and that's increased revenue, it's really up to the marketers to hit their business growth objectives in the quarter. That's what we offer.
All right, connect that to CTV growth.
Yeah. One other point on that, I'll go to CTV growth. If you go back 10-plus years, 10, 12 years, marketers, everybody relied, it was predominantly desktop-based advertising with, let's say, some burgeoning mobile as well. The cookie was the measurement system. That was your way as a marketer to be able to target your ads, make them personalized, and then measure what you got just based on cookies. I showed someone an ad, cookie. They come to my website, I recognize that cookie, they buy. Closed-loop measurement. As cookies have been deleted and waned, browsers are getting rid of them, and there are more and more channels popping up like CTV, there is no cookie. There is no standard identifier.
Marketers rely on companies like ourselves who have an alternative identifier, in our case, our Household ID, to be able to serve addressable advertising and then measure what they get. Specifically in CTV, our Household ID is available over 90% of the time. If you look, we publish these statistics on our website. There are other alternative identifiers out there, but if you look at something like a LiveRamp, they might be in the low 20% of penetration. If you look at The Trade Desk UID2, they're in the mid to high teens of penetration. Their ability to serve addressable advertising, the scale of that is way down. Marketers are flocking to us in CTV. This is such a huge market. Natural tailwinds absolutely exploding, but we believe we have the best product, and the linchpin of that is our Household ID.
Just to go there, we made an acquisition in the fourth quarter in November. We acquired a company called IRIS.TV. Now we have the best targeting. If you're a marketer and you want to play streaming TV ads, our platform offers the best targeting and measurement, substantially better than the leader even in The Trade Desk. When you buy linear television, you buy network like CBS on the linear side and the show, Yellowstone. I want my ad to show up in Yellowstone. When you come to streaming, you don't get to pick the show in today's environment or through The Trade Desk, our competitor. You only get to place ads in Paramount+ as an example, their streaming platform.
With Viant and the impact of the IRIS acquisition, we now know what video the consumers are watching within that app, and we're able to match up what they did in linear television, now identically in streaming, and that's brand new over the last two months. We are really excited about where CTV growth can go with the acquisition of IRIS .
Let's stay with CTV in terms of Direct Access.
Yep.
Right. You guys added a number of publishers. Talk about what our expectation should be for further publisher growth. Are you guys mostly covered? How do we think about that?
Yeah.
Let's talk about the big boys, right? Can you guys crack into, say, a Netflix or crack into, say, a YouTube? What's the opportunity for you to go into some of the quasi-walled gardens?
Yeah. Direct Access is a program where it's, in our space, we call it supply path optimization. You'll hear a lot about this from different competitors. Essentially, what it means is that the true meaning of that as a marketer, when they use a DSP, they want the most direct path from DSP when we bid. They want to get as close to the publisher as possible because there's less fees in the middle.
Like Disney.
Yeah, they get more money going towards Disney or Paramount when there's less middlemen in the middle. When we go, we have this program, Direct Access, and when we go to market, we sign up these premium content owners. This is Disney, Paramount, Peacock, Fox.
Warner Bros.
Warner Bros. Discovery, all the big guys. In CTV, there truly isn't a long tail like there is in display advertising. There are 25 million websites. There are not 25 million apps that people actually consume. There are probably, if I'm being generous, 30 or so that matter, 30 or so apps. We're in the kind of low to mid-20s of content owners that we have, but everybody big we have in there. There are some notable exceptions. YouTube is completely owned by Google, only accessible through their platform. We do believe that fractures. There is Netflix as well. The scale of Netflix is pretty small in the US at this point, but we will be onboarding Netflix here shortly. We think the scale of Direct Access, it's just an incredible proposition for a marketer. When we go to market, we believe we have the best CTV product out there.
Yes, our Household ID, yes, IRIS, but also Direct Access. We just go to market and say, "Hey, do you want to buy, Mr. Marketer? Do you want to buy direct, or do you want to buy through a middleman?" Nobody says, "I want to buy through a middleman." Direct Access, incredibly important, and has been a big part of our growth.
All right, let's transition to Viant AI.
Yeah.
That's been the story over the last year. Let's start with the AI Bidding Tool, right? Talk to me about just the improvements that you guys have seen in terms of the algorithm now that it covers 80% of ad spend. Clearly, marketers are adopting it. How do we think about algorithm improvements going forward?
Yeah. The AI bidding space, I'll give you over here, you have an AI model doing bidding on behalf of a trader.
When we say bidding, that's determining the price that the marketer is willing to pay for the ad.
On the other side, you have the publisher who is determining at any given time, "What's the price I'm willing to accept?" You have to understand this is a 365-day-a-year, 24/7 liquid market, trillions of transactions happening. The old way was agencies or marketers having humans set the price across six or seven different channels, all the different audience segments, different formats, and doing it on a second-by-second basis. Clearly, very inefficient. Marketers were absolutely getting punished here because the sell- side, the publisher, and let's say even the representative, maybe an SSP, they will run electronic warfare against the marketer to try and get the highest price possible. We have to go back the other way with AI bidding to run that same warfare back to them to get the lowest possible price for our client. That's what AI bidding does. We've made tremendous improvements.
We've had two versions of this model come out. On average, we save the marketer 35% savings in their CPM prices when they're bidding for the specific ad inventory that they want. We're not saying, "Hey, you bid $30 on Disney, but we'll get you this Tubi inventory for $15." It's the exact inventory that they want. We think that there are still more improvements to come here. The models keep getting trained off of data that's getting better and better. It has just been a huge win for our customers. It's the fastest-growing product we've ever rolled out. Why? Because it saves them instant money, and they see the value of it. I would also say this is a step process to socialize and getting our clients comfortable with AI technology where they trust it. That's the biggest issue in AI.
Everyone thinks, "Wow, I'm not sure I trust it. One, two, is it going to put me out of a job?" Really, what we see, we boil it all down. AI is not going to take over humans, but you're not going to be able to beat a human who has AI. That's really what our clients are seeing. As we roll out more AI products, we expect similar adoption here.
Yeah, and let's expand on it. The second AI product we did is we looked at the workflow of our customers, which are about two-thirds ad agencies, maybe one-third advertisers and marketing departments direct. When you look at the workflow to start an ad campaign, it starts with a media strategy, and then you have to create a media plan of where am I going to show these ads, trying to figure it out. We launched AI Planning under our Viant AI suite, which does really everything an ad agency does. Doesn't get 100% of the way there, but goes 0-80% in about 60 seconds. It determines who the target audience that we should reach is. It then selects which channels. It allocates the budget across channels, and then it decides which publisher partners you should place your money with, all automatically in 60 seconds.
That process used to take weeks, three to four weeks. With the simple click of a button, it's active and live inside of our DSP, and you can go from strategy and idea to launching a campaign in about 45 minutes or less, where that process on The Trade Desk would take three to four weeks in actually doing it with way more labor to actually produce that same outcome. We view AI as heavily leaning in. We're the only company really with any products out in the space. The fanfare, if you go to mine or Chris's LinkedIn profile, we post lots on LinkedIn. If you want to learn more about the company, you can watch a video. It's 12 minutes long, shows it, and this thing went absolutely bananas from a virality perspective.
About 175,000 people in our industry watched that video in the first 72 hours. We've never made a post that's gone above 5,000, to give you an idea. It is a very niche industry. It is hard to understand, but at the very 50,000-foot view, we represent the buyer of advertising. They want cheaper prices, and they need AI to make their marketing and growth efforts better, and that's what we deliver in spades.
Got that. That sounded like the closing comment. We're not there yet.
No, it's just AI.
You got a question over there? Sir.
Can you just address the weakness in the stock today for those of you that are newer to the story? Because commentary sounds bullish. The numbers look pretty good.
Yeah. The numbers were, it was a blowout quarter.
What's going on?
Industry-leading growth, beat The Trade Desk. Everyone said it will never be done. It's not possible mathematically, financially, but we delivered on all of that. Unfortunately, when you're the challenger and they trade at such a high valuation, I think you're seeing multiple compression in the whole sector today. When you look at the fundamentals and financials of our business, it's strength to strength to strength. Eight quarters in a row, we've had greater than 30% adjusted EBITDA growth. Six quarters in a row, we've generated over 20%. We call contribution ex-TAC, net revenue growth, with Q4 at the high. Nothing makes sense trading in the stock today. It's a great opportunity for investors, and we gave a great Q1 guide that looks very similar to the past six to eight quarters. It makes absolutely no sense.
We think it's a great entry point for investors to come into the stock. The biggest concern was, "Oh, you ran up so much so fast." Really, we just got back to our IPO price. We were massively punished, delivering great results. We were trading at cash value at one point. A lot of it was too punished, really correcting itself, and it doesn't make sense the fact that we're down at all, let alone the magnitude that's there. We see a fantastic 2025 ahead, and I thought the Q1 guide delivered that, but we'll see where the stock ends up at the end of the week.
I'm also relatively new. The Zacks headlines said something about you guys' numbers, but I haven't really.
No.
That's definitely not true.
Yeah.
Quarters, okay. Let's bring it back to the business.
Yeah.
Yeah. Viant AI, right? You guys talked about the first two modules. Talk about the last two, measurement and.
Yeah.
Analysis.
Analysis, thank you, for the back half of 2025.
That's right.
Yeah. Measurement analysis is our next one. If you think about a programmatic trader who's building these campaigns in the software, and then they're trading on a daily basis, their whole job is to do two things. The number one job actually isn't to hit performance inside baseball secret. It's to pace their budgets evenly. If you're a Whataburger, you don't want to hit a high ROAS, but you're not spending any money because you're not bringing enough customers in the door. You want to spend a certain amount of budget every day evenly, what we call pacing. You want to pace evenly, and then you want to hit your goals. That's just at a high level. What are they doing on a day-to-day basis? They're reading through tons and tons of data. Our platform, just so you know, DSPs historically, they're like Bloomberg terminals.
They take specialized training and knowledge. If you're an average Joe and you look at a Bloomberg terminal, you have no idea what you're looking at. It's kind of like that with DSPs. To figure out how they're performing and how they're pacing and what can I do to improve the campaign, they have to look at an enormous amount of data. On average, we see that traders look through about 50 or so pages of reporting per day. It's insane.
Try and retain that information and then go make changes to the ad campaign based off that data.
Our AI Measurement and Analysis that's coming, this essentially creates a chat interface that you won't log in and press a bunch of buttons and run a bunch of reports. You're going to say, "Give me an update on all my campaigns today." Boom. It's going to spit right back to you, very similar in a ChatGPT experience, but it literally crunches all that data in seconds. It posts back to you an overview of what you're doing. From there, just through a chat experience, it's quickly going to say, "How am I pacing? Okay, great. What's working, what's not? Tell me what I need to do to improve my campaign performance.
By 10%, 20%.
Whatever it is. The human's in control, but the AI is fetching the data and coming back to them. Now, we're doing two things. One, we're enabling you to get real-time insights fast. Yeah, you could get real-time insights if you could find them in reporting and find an insight, but really, we're just delivering that insight to you. That's the first thing we're doing. The second that what we're doing is getting to our next one, which is AI Decisioning. We're socializing, again, getting our clients to trust the AI. It's first going to make recommendations to you. Once you experience that and you see the results and the speed that it enables you to make changes and really help you–
And their actions.
Do your job, we will then roll our next product, which is AI Decisioning. This is when you will opt in as a client that says, "You know what? Don't make me ask you what's going on and then make me ask you for recommendations. Just hit my goals." This is where the future of advertising is going to go. These things should be the self-driving car is to the automobile as what we call this AI Decisioning or what, broadly speaking, we call autonomous advertising. You should just give us your budget, your start date, and your end date that you want to run a campaign and whatever your goal is, your cost per customer, you want to reach whatever your goal is. The customer expectation will be, "You just do it for me." That's really where we're headed.
One of my key takeaways from this is the focus on performance.
Yes.
Right, where you guys have really moved in that direction. Talk about the evolution, though. Is that more like, "Hey, the Household ID used to strike me as reach and frequency where you guys were capping in on that, and now it's like, 'Hey, this is targeting to be able to really drive results.'" What's that evolution look like, and how does that evolve with the product roadmap going forward?
Yeah.
Tie it together.
Yeah. For me, when I think of Household ID, we have substantially, let's call it five to six times more data to train these AI models on because the Household ID is available 90% of the time in Connected TV. If you contrast that to The Trade Desk, Chris said high, like 14%, 15% versus our 80. Our AI models are training off of substantially more data, which is why you can have a lower R&D spend. AI kind of levels the playing field there where we can evolve that product, execute, and have a better product to market because we have more data training those models over time. To me, that's the biggest way where Viant AI just accelerates, and it's only because of the scale that we have with Household ID to train them. To me, it's wide open for where we are today to where we're going.
I think what you'll see is 2025, lots of product announcements where we're going to roll out measurement and analysis and hopefully decisioning at the end of the year where there is no more human involvement, and AI is really powering everything.
I think, to your point, we have been, since we've gone public, our whole point is that we are a performance-based advertising platform. We're not built for brand. Our product roadmap isn't dominated by brand advertising. If you back up, we've been in this space for over 25 years, so we know it cold. I'm not saying better than everyone, just as good as anyone. If you look at 65% of the money in the space goes to three companies: Google, Meta, Amazon. What do they do? They just deliver sales. That's it. They service 10 million advertisers. The open internet services maybe 10,000. So 10 million over here, 10,000 in the open internet. How do we solve this issue?
The biggest risk of the open internet is if you're an investor in the space, if I want exposure to ads, why don't I just buy one of those three guys? It's because most of the biggest and the best content in the world is supported by independent ad tech, and so we're really focused on independent ad tech versus the walled gardens.
Chris, I'm going to stop you because I actually want to hammer this point home.
Okay.
Viant AI is going to help automation drastically, right?
Yes.
Unlock that, though. More performance focus, more automation.
Yes.
Go exactly where you're going to go in terms of connecting that to the SMB opportunity.
Yes. Our product roadmap has been, and one of the unlocks we got is you have to drive performance for marketers. If you drive performance in incremental return on ad spend or just, again, I give you another dollar. Can you give me another sale? If we can just focus on that and drive that, one of the big unlocks, and I think a big catalyst right now, is CTV. This is a channel and a medium that outperforms anything in the market. It's better than Google Search. It's better than Amazon. It is better than Meta, truthfully. Why? Is because it drives another sale. Most of Google Search is half of Google Search is branded search terms. When someone comes to Google and types in Ford F-150, Ford probably spends $50 million-$75 million a year on their own keywords. Why?
Because the CFO leans on the CMO and says, "That thing clicks and converts to a lead at a rate that's unbelievable. You will keep buying it." Every CMO backs up and knows, "But wait, I just showed that ad in TV that drove them there. All right, I got to hit my bonus." I'm telling you, that's how the entire industry works right there. 65% of the money is last touch attribution, meaning whoever showed the last ad gets the credit. That's all of Google Search. That's Meta. That's Amazon. Amazon, $40 billion in their ad business. It's just sponsored listing ads when you search on a product. That's all it is. Is that really advertising? I don't know, but it is performance.
It's digital shelf space.
When you look at things like CTV, you look at things like streaming audio, we see the data. It drives. If you want to drive new demand as a marketer, you buy those channels. Our Household ID is what connects that, that closed-loop attribution, and that's what we're proving every day. Why are we growing faster than everybody in CTV? Because of our Household ID. We're showing performance. We attract the smart money in advertising. Unfortunately, I don't know if you call it the opposite of smart money, it's probably dumb money. If you.
The bigger your budget, the less smart you are.
There is a change that is happening. We believe over the next three to five years, Google Search, half of Google Search is branded search terms. Half. Marketers are going to stop buying that. Let me give you one other read-through. Every other company in our space that had bad numbers, everyone's worried about the macro, blah, blah, blah, I'll connect the line for you. They all have significant exposure to display advertising that's dominated by last touch attribution by the cookie. It's all Chrome. Look at every company that reported it was down, they give you a bunch of little blah, blah, blah. It's because they have huge exposure to display advertising.
They make all their money.
Greater than 50% of their business is display advertising, and marketers are realizing that stuff doesn't really drive what I used to think it drove. That is it right there. We don't have that exposure because we've been showing marketers, just because you showed the last ad to someone, that makes it look like display ads and Google Search drive all of your value. If you back up a little bit, use your brain, you're like, "Oh, wait. No, it doesn't." That's what's happening in the space.
Yeah. It's like crediting the highway with bringing customers to your store. It doesn't make any sense. That's what Google Search is.
I got to end the conversation, but you guys have been fantastic.
Thank you.
Thank you.
All right. See you guys. Thank you.