Welcome to the DoubleVerify meeting today. I'm Laura Martin. I'm a Senior Media and Internet Analyst. I'm also baby in the corner for this meeting. So let me introduce. Well, welcome to my stage, the DoubleVerify CEO and the CFO. Let's start with Mark. Mark Zagorski is DoubleVerify CEO. Prior to joining DoubleVerify, Mark served as the Chief Executive Officer of Telaria, an NYSE licensed retail management platform from July of 2017- April of 2020. Following Telaria's merger with Rubicon, he served as the President and Chief Operating Officer for the Rubicon Project through June of 2020, and prior to that he was the Chief Executive of eXelate from December 2010. Nicola Allais, we're very pleased to have you with us. He served as DoubleVerify CFO since 2017. At DoubleVerify, he partners in all areas of the business, including M&A, which we're gonna talk to.
Mm-hmm.
Prior to DoubleVerify, Nicola was CFO of Penton, which was acquired by Informa plc, an information services company, and he held various finance positions at Downtown Music, Primedia, and HBO. He has really great academic credentials, but since I didn't read yours, I'm not gonna read yours.
Mine are very good, so.
Are they? Okay. Well, sorry Nicola.
All right.
Okay. Let's. Oh, well, big room.
Yeah.
Like 40 people in the room. I'm asking everybody a personal question. I'm just gonna ask you each one since I have two of you, and that is best advice. Best advice you would give your 18-year-old self that you really wish you knew back then, or best advice you've ever gotten in your professional career about professional things. There's a couple seats here. There's one in the front here. There's one in the front here, if anyone wants to sit. Okay, best advice.
Best advice to my 18-year-old son.
Yes
... or my 18-year-old self?
Yourself.
My 18-year-old...
What do you wish you'd known at 18 that you now know?
You know, I would say, I had a boss who told me once, you know, "Bring yourself to work." I know it's a cheesy one, but it is true.
As opposed to bring Mark to work?
No, right. No.
Bring baby to work?
As opposed to bringing your own, different personality to work, just bring yourself to work. I think it's actually, been quite a, quite a good advice in my own career. It's just too hard to have two selves.
Okay. Don't bring your mess to work.
Don't bring your mess to work.
I like it. It's excellent.
Uh...
What about you?
Okay.
See if you can one-up him.
Can I tell a quick story?
Yeah.
Just a very quick story?
Tell us a story.
All right. I'll give you advice that my dad gave me-
Okay
when I was in high school.
Best advice.
I'm not the biggest kid, as you can tell. I'm a little bit on the challenged side. I'll never forget, I wanted to be on a sports team. I didn't make the soccer team and I cried all freshman year.
I'm sorry.
The only team that would take me was the track team. They wouldn't cut anybody, right? They didn't cut anybody. I still was a pretty crappy runner. My dad had advice, he's like, "I don't care what you do when you're out there." He bought me these shoes, it was back... Like, I couldn't even afford, like, track shoes. He bought me these expensive shoes. He's like, "You gotta make sure you pay for those shoes." He goes, "Just beat one kid." "I don't care if you come in second to last in every race." That year I came in second to last every race, but I beat one kid, and I would pick out the smallest, weakest kid that was running. I'd be like, "I can beat him.
If I can beat him, I can do this." It turned out, just beating one kid was, like, the start of confidence. It was like, just beat somebody. Just look for a target to go after and just beat that one person. By the time I was a senior, I was like captain of the team, I was winning races.
Wow.
... stuff like that.
Worst to first.
Story to go through. Exactly. Even in business, like, just look out and beat somebody, and then from there you have confidence going...
I better beat you. You better be careful.
No, not you. Not this. Not this.
Um-
You're strong. I have to work for years to do-.
Can you guys start the timer please? Okay. That's awesome advice. I totally love that. By the way, that's my New Year's resolution, is collecting advice from people I respect.
There we go.
Listening to it. You know, maybe I'll do a note at the end of the year.
Oh.
Best advice ranked through the year.
Fantastic.
You know? Both of yours are in the contention for the top 10. Okay, fantastic. Let's move on to the company. Let's talk about what you're each most excited about and most worried about from the CEO point of view and from the CFO point of view. Presumably, those are different things. Mark?
I'll talk about the excitement thing 'cause the CFO is supposed to be the worrier. Right.
Fair enough.
I'll say there's three things I'm excited about this year. The first is our opportunities in social. I think social will continue to boom, particularly companies like TikTok and others where we have a really strong engagement. I think social is very exciting for us as a company. The second is connected television. I think, you know, it's not new, but it is at a point where ad-supported or AVOD connected TV will continue to grow, and I think it creates a nice opportunity for us. The 3rd is something specific to DoubleVerify, which is the emerging sector of attention. Attention was all over CES last week. There's continued discussion about attention as a tradable metric in the space.
Can you turn up his mic? I can't hear him.
You know, I think attention is gonna be a really exciting area for us in 2023. We just were the first and only MRC accredited attention metric that was launched. That just announced that last week. We have a partnership now with the IAB to start building standards around attention. We think that could be a huge measurement and verification segment moving ahead.
When you say excited, I'm a Wall Street analyst, I expect money. It doesn't sound like there's money from this in 2023.
We're playing the long game. I think it can be a huge sector.
Yuck.
Hey, you know, look, I think people invest in DoubleVerify because they believe in the long term we're gonna own the space. I think owning the space means innovating, building scale, and doing things that no one else is doing, and attention is the space where all three of those things are happening.
All right. Fair enough. What are you most worried about, CFO? Nicola?
Um, so-
What do you lay at nights awake?
I gave you the hard one, by the way.
Yes, you did.
I gave you the easy one.
Look, I'm worried about the beginning of the year. I think it is, it is sounding like a slow start in terms of ad spend, which will obviously have some impact on our business. We are immune to those CPM fluctuations, but, you know, if it is a, if it is a tough market, which sounds like it's gonna be at a, at a minimum, slow at the beginning, you know, it could have an impact on our, on our own growth. Worried about that. I am worried a little bit about the market for talent, although I think we are better placed than other companies in the space. We.
I'm shocked by that given the layoffs. Shocked.
Right. You're shocked that we're nulling up?
I'm shocked that you're worried about talent.
Um-
There's so much talent coming free in the market.
I think-
-from Amazon and Facebook and Google.
I think there's confusion as to where this talent is gonna go and how we can attract the right kind of talent for what we need to do. I think it's just there's still a topsy-turvy market for talent. Those two things are the ones that worry me. I think in the market what worries me a little bit is that we're still bunched up with the ad tech companies and we really are a tech company. Especially on the first part I made.
Ad tech isn't a tech business?
I think what I mean by that is we're not a media take rate type of business. I think most of the companies that are gonna be most hurt at the beginning of the year will be take rate companies rather than us, which are, you know, a company that's most based on measurement and on volume.
I wanna comment on that too.
Sure
You know, ad tech has become this big ugly umbrella that includes anything that touches advertising. If you think about what the word means, it should be technology that focuses on the ad space. A lot of what's considered ad tech is just media sales that happens to have a technology underpinning. They're not tech companies. They're media sales companies that maybe have some technology underpinning it. I think those businesses are very different than software type businesses with the kind of gross margins that we have, with the kind of, you know, net retention rates, with the kind of client longevity that we have, and the fact that, you know, companies like us are much more similar to something like a Salesforce than we are with a take rate company that's in the media space.
I totally disagree with everything you just said.
Oh, well-
However, what I agree with is.
That wouldn't surprise me.
You are different.
I'm willing to take you on that one.
You are. One of the things we've been pushing you on, Mark, is that you guys have not been raising price, that $0.08 number. You did a nice thing and you did add pre-bid, which you then upsell.
Yep.
Talk to us about one of the things you guys are great at is product. You really are good at product. When you introduce new products, often you bundle it with the old products and you upsell.
Yep.
Tell us about the product roadmap, and specifically I'm very interested in sort of price per average customer, if you want.
Sure.
Like lifetime value is driven by price.
Sure. you know, our model's pretty straightforward. We have what we call fee per transaction or MTF.
$0.08 our estimate.
Right. Then an MTM, number of transactions that we measure. Measured Transaction Fee, you know, media transactions measured. That MTF actually went up last year, it went up not because we raised price. It was partially because we raised price. We actually, we did a price bifurcation, so we started charging a different price for video than we did for display. A lot of it was due, a majority of it was due to the fact that our price, our product mix started growing, right? The number of solutions and the price of those solutions that we sold each customer on each transaction that we measured went up. That lends itself to the idea that you're talking about, which is this whole idea of selling more products to the same customer.
Yeah.
What we do as a company is we analyze media transactions, right? We measure them, we help filter them so that they actually get to the right type of context or content. Every time someone pings us for information to do that, we get paid, right? We wanna drive volume, but we also, every time we see that transaction, we wanna do lots of different things to it. We wanna tell them if it's viewable. We wanna tell them if it's fraud free. We want to ensure that that ad's being delivered in the right context. The more things we layer onto that, the more money we can make, right? That's where product comes in. Attention, which I mentioned earlier, is another add-on to that, right?
The ways that we drive growth are from product development, right? Taking the same data, measuring the same transaction, and providing more information around that and charging more, and driving more volume, right? Both of those two things are important to us. One is a market factor, selling more, selling more clients, getting more transactions. The other is a factor of product development. How many times can I charge you as an advertiser for the same impression to give you a different look on that impression?
Again, it started with, let's tell you if it's fraud-free. It became, let's tell you if it's viewable by a human, then if it's delivered in the right geography, then if it's delivered in the right context. Soon it will be if it's delivered to a high-attention media, right? Attention will be another layer on that. The way we build price is by adding more and more data features to that transaction analysis.
I love your attention work. You absolutely are the leader in this. What I heard you say is that we're not gonna make any money from attention, and you're now using attention as the answer to my product roadmap for 2023, which means I don't have an add-on product in 2023 that's gonna upsell?
Now think of the other aspect of this too. It's the volume aspect of this also has a product component, which is it's not just what data I'm delivering, but where I'm delivering it from. I.e., social.
Yeah.
Our ability to actually analyze different types of platforms is also product development, right? TikTok, new platform. We hope to launch Meta sometime this year, new platform. We're expanding our capabilities in CTV with folks like Netflix. That's new platform. That drives volume, but it also drives the type of analysis we're doing in that transaction too. There's product development work both on attention but also on the sector front as well in how we analyze those sectors.
Okay, those products might generate incremental revenue this year.
Absolutely. A 100% will.
Okay. Great. Fantastic. Okay, great. One of the things that's really unique about DoubleVerify is you measure impressions both in walled gardens and in the open internet.
Yeah.
In walled gardens, in fact, in walled gardens like Roku and Snap and YouTube, meaning you can't buy that inventory, those ads, unless you are that company.
Yep.
Nobody in the open internet The Trade Desk can serve ads into those walled gardens. One of the things we're writing, but I'm very interested in your opinion, is we are writing that walled gardens are losing power to the open internet. You're hedged, you're in a good position to opine on that without an agenda or without an axe to grind. What's your point of view? Are walled gardens losing share to the open internet, or are we just shifting walled gardens into Netflix and Disney and...
I think we're shifting from one walled garden to the next.
Okay. That's bad luck for me.
I think I mean, look, I think the open internet is always gonna be there, it will always be championed, and there's great companies out there playing like The Trade Desk and others that are continuing to grow it. Look, walled gardens continue to take an important position, which is, A, they're either user-generated content-
Yep
which has incredibly high levels of engagement. That's what advertisers want. B, it's incredibly high-quality content, right? That's where your Netflix and your CTVs of the world come out. Those are things advertisers really like. They love engagement, and they love quality. The open internet, you have to dig for those things, right? You have to dig for quality, and you have to dig for engagement. That takes more work. That's why there's, you know, again, valuable companies out there who are looking to help make that easier for advertisers. You know, it's a no-brainer when someone like Netflix approaches you and there's quality there.
I gotta tell you, though, this raises a question I've never thought of.
Yeah.
If attention is where you're going and engagement is higher with user-generated content, which brands don't like 'cause they don't it's not predictable, it's risky, and it's not very high quality. I mean, depending on how you judge, like, the biggest influencers, doesn't that mean that your product positioning is moving you more towards lower quality, quote, "lower quality content" with higher engagement, which is user-generated? It is TikTok and YouTube and Reels on Meta. You're leaving your traditional business, which is high-end programming, high-end content.
It'll be interesting to see because I think, you know, when we look. Attention is made up of a lot of things. Quality content can sometimes drive attention, but, you know, UGC drives attention as well.
User-generated.
It's still pretty early in the attention game to see what works and what doesn't because remember also attention's a factor of things like the creative quality, creative size and engagement.
Mm-hmm.
we will see, but I think it's a great point. It is actually very interesting to see if it actually... I can tell you, the platforms that are most interested in attention right now...
Mm-hmm
are the social and UGC platforms because they know that they have a incredibly high level of engagement.
Mm-hmm. Brands are really reluctant to go there. Super risky.
if you can say, "Hey, look, man, we're super high attention-
Mm-hmm
... and high engagement," there's just another reason. Everyone's here. That's the other thing too is, like, think about it. CTV is great, and TV is wonderful, but where do you reach 18- 24 year-olds?
Yeah. Snap.
It's on TikTok.
Yeah.
Snap.
TikTok, Snap.
You know, like, that's where they are.
Mm-hmm.
I think.
It's true.
... you know, if you're gonna reach younger folks, you're not gonna reach them, you know, watching TV, I hate to say it.
Yeah. Yeah. I think it's a fair point. That's a fair... advertisers have to follow the consumer-
Correct
... even if they don't agree with where the consumer's going.
Exactly. Unless it's X.
I remember watching the first Survivor and bad-mouthing at the party, like, "This reality TV, it's never gonna work.
Never gonna work.
Survivor, like, 37 is now on the air. I was totally wrong about that.
That's good.
Good thing I don't buy ads. Okay, let's talk about, when you think about, your shares, what would you most like Wall Street to... I'm gonna ask it of both of you...
Yeah
... from a financial point of view. What do you think Wall Street's missing? What do you think... I take your point that they sort of wrap you into this DSP, SSP-
Mm-hmm
... craziness, and you're an infrastructure company. It's, it's an easy one. I'm not sure Wall Street misses that, although maybe you think they do. What do you think Wall Street's missing that you would really like them to know from your two seats?
Why don't you go first.
I'll start with the obvious, which is our balance sheet is strong.
Mm-hmm.
We have a lot of cash. We don't have any debt. As money becomes more expensive, we're not exposed to that risk right now. That's step one. Step two is we are a very profitable business model. We are continuing to invest in it, right? A lot of the questions we get is, you know, "Why don't you just let your margins grow, you know, at a faster clip?" You know, that comes to it's a very large market. We wanna become a currency. We wanna be where all the ad dollars are going, regardless of the platform, which is why our pricing strategy right now is fairly-
I hate your pricing strategy.
The pricing strategy allows our advertisers to use us indiscriminately wherever they put their ads. That allows us to become more of a currency in the market. I think That's a message that we're really gonna stick to for a while until we become a larger share of the whole market.
Yeah, I mean, just I would say. Nicola hit the big ones there. The other thing I would think about is, you know, we are still we are not a wallet share company.
Right.
Number one, which means I don't fight other companies for a piece of an advertiser's business.
Right.
We win the business. They use, for the most part, one platform to do verification, right? Unlike even the biggest companies in the world, Facebook does not get 100% of someone's ad spend. Google does not get 100% of ad spend. We get 100% of the verification business for vast majority of our enterprise clients. It is a pretty binary equation, and so we don't fight over wallet share, which positions us a very bit different in the market. The other part is, it's still pretty early days for us as a company, you know? You know, and because of that, we're still gaining customers. 70% of our closes in Q3 were greenfield customers. They don't work with anybody. They're totally new, right? We're not fighting folks for wallet share.
We're not, you know, trying to conquest competitors' business to grow. We're actually going into new markets. We're gaining new customers, and that gives us a really interesting growth trajectory over time. It is a long game. We're playing a long game, I think, you know, I would love to be here. Well, I'm not going to be here 10, four years from now. I will retire. Maybe five years from now saying, "Yeah, you know, look, now it's a matter of us worrying about launching new products and raising prices." We don't need to do that. We have so many more customers to go out there and just close that, like, that in itself is a huge growth driver for us.
Love this answer. I wanna ask you to buy IAS. The incumbent here was your really only competitor, IAS.
Mm-hmm.
You say on your calls that you're winning 70% of business. Tell me in the marketplace, not to Wall Street, but in the marketplace, why are you winning 70% of the RFPs, requests for proposals that you're getting?
It comes down to technology. You know, this is an RFP process that usually ends up, you know, starts with 100 questions and ends up with a head-to-head competition.
Okay.
They launch both systems against each other.
Okay.
What they look at is who filters out more fraud, who gives me a greater level of granularity when it comes to brand suitability and brand safety, and allows me to turn the knob the finest, and ultimately, who delivers the highest ROI. It, you know, there's lots of things around it. There's relationships, there's service, but it really comes down to what works better.
When it comes down to that, I think we do really, really well. The reason why I think we've been gaining share is because for years we just weren't getting in front of customers. We had underinvested in sales and marketing. The year of the IPO, we IPO'd in 2021, we talked about it. We're investing heavily in sales and marketing. We built a very large sales force. I think we looked the other day, I think we grew our sales force by how many people was it?
We grew 48%.
48%.
Yeah.
our sales force that year. like, what we're seeing now is the benefits of that is like, okay, if we're in the game, we're in front of the customer, we know we can win.
Okay. It is now 15 minutes left. I'm gonna take questions from the audience, theoretically, the rest of the time. Yes, sir.
A quick question. 70% of greenfield, but how does one measure the success in terms of what's called reordering or the existing clients? How does one kind of project the models that are using?
You wanna go for that?
I'll give two stats. One is the net retention rate is over 120%. Once we have the customer, that customer grows because we go into new sectors and we have new products. The growth in customers that spend more than $200,000 with us on an LTM basis grew 40%. This just gives you the power of the scale. Once you have the customer, you really can just grow with them with new products in new sectors.
The average tenure, and the interesting thing is...
Tenure
The average tenure of our top 25 clients is over seven years. Top 75 is something like six and a half years, and that continues to grow. People, it's a pretty sticky engagement, unlike ad dollars, which again can flow from platform to platform. I'm gonna spend on TikTok this year. I'm gonna spend on, you know, not spend on X this year. You know, dollars move pretty fluidly, platforms don't.
What percent of your LTMs are on rate card versus negotiated rates?
That's a-
I mean, most are negotiated based on volume tiers, right? As we grow into larger, global kind of customers, we'll be able to give a discount if we get more and more impressions. That's how we grow. That's how we get the 120% plus net retention rate. The very few people that are on the rate card, like any media business, right? The rate card is just what's published.
Do you think that will stay the same as you guys grow?
I think there's a long road-
We're gonna keep whining at them if it keeps staying the same.
No, My answer in the short term, I think there's plenty of opportunity to continue what we're doing, which is always get more volume for more territories or more sectors against the rate. Yeah. Our marginal cost-
Yeah.
One thing that's important, like our marginal cost of measurement is incredibly low.
Yeah.
You know, again, Laura doesn't like it. We, you know, we're about volume.
Yeah.
Like we wanna continue to drive volume, reduce friction. I think we'll get to a point someday, for sure, where we have price leverage now. We increased price last year on our programmatic pre-bid products by splitting the price between video and display. Basically doubled the price. We get zero pushback. Zero. We didn't lose a single customer, didn't lose a single impression. We know we have some leverage, but for us now, I think it's a matter of driving volume, going into new markets and, you know, I think we'll have that leverage will only increase over time as we become scaled, as we, you know, able to marginalize, you know, other solutions and other competitors.
What else? Yep.
How important is TikTok to kind of convince Facebook, if you will, or, you know, just talk about what kind of Facebook needs to get there? I have a second question just on seasonality. Like, you know, just maybe talk about how to think about seasonality?
I'll take the first one. You take the seasonality one.
Yes. Yeah, I'll take the easy one.
Yeah. I think, you know, look, you know, Facebook announced almost a year ago that they were gonna open up the news feed to third-party brand brand safety and suitability companies. You know, they still haven't launched any yet. However, you know, a big part of that pressure, we believe, was the fact that, you know, companies like TikTok had been very vocal and very public about opening up their feed to third-party verification. I think it definitely played a pretty significant factor. I mean, TikTok is no joke. It's a $10 billion-plus ad business that came from nowhere that's growing at triple digits each year. And that's gotta be hurting Meta in some way.
I think there is definitely some pressure on them to start to do the same, when their biggest advertisers were looking at TikTok as a viable option with brand safety and suitability controls, versus Facebook. As we talked about, social has incredibly high engagement. The other aspect of it too is the fact that TikTok is a much younger audience than what Facebook's core is, right? You're drawing dollars away because the demographics, which is hard to compete against. You're not gonna change Facebook's news feed overnight to make it younger. But what you can do is actually make it more competitive from a brand safety and suitability perspective. I think that did drive a lot of the change that happened there.
What's the hesitation to that? Why are they not trying to do it faster than TikTok?
They've always kind of walked to the beat of their own drummer, which is we do things.
Which is the Metaverse?
... the Facebook way, right? You know, they're investing in the Metaverse.
Yeah.
They are, you know, they have always been reluctant to allow third parties in to do anything on their platform, which is totally understandable. They're getting there. I mean, look, they've been very open. They've been great partners with us. We're excited about working with them. I think it will be, you know, continue to be a great relationship.
The seasonality question is in theory, Q1 should be the smallest, Q4 should be the largest, and Q2 and Q3 are kind of the same. That hasn't happened in the last three years. I do think that Q1 2023 should be the smallest, just considering what we're hearing in the market.
Yeah.
Um-
Mm-hmm.
Could you expand on that trade-off between investing in your sales force and marketing and then flexing margin? At what point do you feel comfortable with letting like the SG&A and lever drive, if you will, and taking in margin?
We certainly don't feel we're there right now. The reason why I say that is because of the impression growth that we're seeing, even in the market, the way it was last year, was very strong, right? It was +20% in markets where the CPMs were going down a lot, and that meant that we were still growing revenue quite fast. That's gonna be the main driver for us, right? Because revenue is still growing so fast that there's no reason for us to really look at the margin play.
We feel like we have a long way to go there. It doesn't mean that we're always gonna be, you know, at that 30% margin that we've seen in the past few years, right? We could easily go to 27%, 28%. We see a tremendous opportunity, right? If Meta all of a sudden opens, you know, we'll take the investments to take that opportunity. I would say it's not, it's not in the short term that we're gonna play the margin game.
What else? Okay. Cookies. I would like you guys to address the issue, the primary reason I run into that investors will not touch any of ad tech, including infrastructure of ad tech.
Yep
Is that cookies deprecation, given the signal loss we had when iOS kicked off Facebook, who said their revenue fell by $10 billion just because of that, cookies is much more broadly used.
Yeah.
Can ad tech survive cookies deprecation? Let's just say if it happens in 2024 when Google says it's going to. If the ad tech industry can't survive, really that's good for nobody.
Mm-hmm
even.
Yeah. Yeah.
Like, pitch to me why ad tech can survive post-cookie deprecation whenever that happens.
just to kind of level set.
Yep.
DoubleVerify is not-
Uh-huh.
DoubleVerify's technology does not rely on cookies.
Right.
We don't use cookies. It's not part of our infrastructure of how we collect data. As walled gardens become either more or less powerful, we're getting direct feeds from them. Even furthermore, like, even if the open internet starts to crumble a bit, the walled gardens, we have direct feeds from them, so the dollar going there will continue to grow. You know, needless to say, almost half of our business is activation, and almost all of that activation is on the open internet, right?
Yeah.
We certainly want a robust open internet. There is a demand for non-walled garden content, as you said.
Mm-hmm.
The ability to reach specific users has always been enhanced by identifiers or cookies or things like that. Remember, the ad business started without cookies. It started selling like TV was sold, based on context. Context is cookie-free, doesn't need cookies to be targeted against. You know, television had built a $70 billion business on selling ads based on Monday Night Football reaches men, right? I think, you know, ad tech has a future with or without cookies because advertisers do want to reach audiences in different places besides walled gardens. Whether that's aligning content based on context or on first party IDs, right? Or through lots of other different types of channels, it'll still be there.
Okay. retail media networks.
Yeah.
One of the things we're writing, which is unpopular with you guys, is that retail media networks do away with intermediaries. They obviate the need for intermediaries. Retail media network, just real quick, is basically what Amazon does. It is the convergence of you have an ad, and then actually you have a sale that feeds back, that feeds the next ad. It's the overlap of advertising, which round numbers is $800 billion a year globally, and e-commerce, which is $4 trillion. It's a really big business. The Trade Desk has just done a, let me call it partnership with Walmart, where you buy the ad on The Trade Desk, which is the ad piece, and then Walmart gives the advertiser the data to close the loop to know how effective your advertising was. Amazon, of course, is the best answer if you advertise and you sell.
Mm-hmm.
Which is not popular with you guys, is that intermediaries like IAS doesn't matter in that context 'cause you know what the sale was, and so you can actually calculate with a return on the ad spending.
Yeah.
Please disagree with me.
I'm gonna disagree with you in a huge way.
Please. I hope you do.
It actually ties into your last question.
Okay.
When you talk about the open internet, retail media networks are another reason why the open internet will thrive.
Okay.
What you just described there is one key point which is most retail media networks are made up of core advertisers, so whether it's Best Buy or Target, who take their data and things that happen in their environment and extend that out to the open internet, right? They go out and buy inventory in the open internet. That has to be controlled, right? There is still brand safety issues they have to deal with. They're buying inventory on properties that could have incredible brand safety issues. Even if you are a small OEM or a large OEM who's buying through Best Buy's network, you do not want your ad showing up next to hate speech or incendiary content.
Yeah, for sure.
That's, that's piece number one. Piece number two is, yes, if I can measure the transaction, it's awesome. Maybe I could care less if it's next to hate speech or something. None of them will, but maybe they will. At the end of the day, if you're getting fraudulent impressions on the other side of that retail media network, your denominator is wrong. I know how many transactions.
You care if I'm selling something.
Shouldn't it be better? Why? I'm paying, if I'm paying a CPM, right, I'm not paying a CPA through retail media networks for the most part. I'm paying a CPM.
You need to say those out loud. Like-
A CPA is a cost per acquisition. CPM is cost per thousand. I'm paying a cost per thousand. I'm getting a good transaction rate.
Yes.
What if that good transaction rate is based on the fact that I'm paying for impressions that are fraud? Get those out of the system, right? It can be even better. We absolutely need that. The third thing I'd say on retail media networks is, yes, there are a ton of advertisers, and a vast majority of advertisers on retail media networks are brands trying to sell products, right?
Mm-hmm.
They sold some on Best Buy. Now I wanna sell if someone doesn't buy it on Best Buy someplace else, I'm gonna keep going. There's a lot of brand advertising that goes on there too. Brand advertisers, yes, they're concerned about transaction, but they're just using that data to reach more people interested in their product. I could see retail media networks extending to even things like automotive at some point, which they wanna do branding based on people going to one automotive site, looking at the car, and extending that other places, dealerships, things like that. Those are brand-building exercises that don't specifically rely only on a transaction at the end to determine whether the value of their impression and that transaction is important.
That raises a point, and we just have two minutes left. That raises a point that has been most surprising to me about DoubleVerify. The competitive advantage of digital media is its bottom of funnel.
Mm-hmm.
It's really close to conversion or to the decision search social. DoubleVerify really does call on brands. Most of your clients are brands, more top of-
Yep.
funnel, cost per thousand, as you say.
Sure.
It's not really. You've actually built, DoubleVerify has built this really large digital business and a piece of the internet that is not a competitive advantage of digital advertising.
Yeah.
'cause it's higher funnel.
Yeah.
What that really argues is that digital media is gonna be full funnel.
A 100%.
You're servicing the top and a lot of these more traditional large walled gardens don't...
Yeah.
service the bottom.
It's 100%. Like, the digital dream has always been, yes, we wanna sell a product, but we wanna do it with a very valuable engagement or interaction. Most people are focused on the bottom, but as you see connected television continue-
Yep.
to grow, sight, sound, and motion is about building a brand, right? CTV, the dream of CTV is the power of bottom of the funnel with the exposure and engagement at the top of the funnel. I think that's what makes CTV exciting for us cause it continues to tell that story, but for a lot of advertisers as well.
Okay. Any last question? We have one more minute. Any last question? I'm gonna call it there.
Awesome.
Thank you, guys.
Thanks, Laura. Yep. Thank you.
Thank you very much.