But why don't we go ahead and get started? In any case, thanks again for joining us at the Raymond James TMT and Consumer Conference. I'm Andrew Marok. I cover advertising technology and digital media here at RJ, and we're thrilled to have with us Mark Douglas, the CEO of MNTN. Mark, thanks for joining us.
Thank you.
I'll start with the same question that I start with everybody because we get a lot of kind of people new to the story at these types of things. So for those who maybe aren't as familiar with MNTN, can you give us an overview of the company and where you fit into the digital advertising ecosystem?
Sure. So MNTN provides small and mid-sized businesses a new marketing channel, which is streaming television or television in general. So backing up a little bit, television is the highest or largest consumer entertainment medium in the world. More people watch TV a day than use social media. More people watch TV a day than drive automobiles. 5.5 billion people globally versus about 4 billion watch TV for an average three hours a day versus about 4 billion that use social media. But small and mid-sized advertisers were almost entirely cut off from that medium to do their marketing as a medium that was dominated by maybe 400 global brands. So what we did and what we do is essentially open up streaming television now as a marketing channel for any size business, and in particular, small and mid-sized businesses.
The key statement one I'm most proud of in the business is 97% of MNTN customers have never advertised on TV before.
Yeah.
And so, we're just literally expanding the market, and that creates just we're creating our own TAM, and it just creates a huge opportunity.
So the core customer of the SMB enterprise who's looking to advertise on TV, in practice, what does that look like? And I guess, how are you serving them specifically?
Right, so our core customer is a direct-to-consumer e-commerce brand, so essentially an emerging growth company or maybe an existing mid-sized company, so companies like WeatherTech or Third Love or essentially brands that are emerging in each of their industries. It could be local businesses, also car dealerships and so forth, and so that's who's typically using our platform, and the way they're viewing it is they chances are doing paid search with Google AdWords and doing social with Meta ad platform and now are accessing streaming TV using now Performance TV. And then we connect their campaigns, their performance campaigns, meaning they're highly targeted to the specific customer and consumer that is likely to buy their product, and they are highly measured also. And they go out with precision. They are eligible to go out on every streaming network in America, every ad-supported streaming network in America.
That kind of leads into my next question, where you talked about a lot of the engagement figures with television as a medium, but how are you kind of sizing the TV opportunity for SMB specifically? Why is this a cohort that's kind of been overlooked in the past?
The main reason is I'll come back to the first part of your question. The main reason it's been overlooked is, and that's kind of the question why now, is the advent of streaming TV versus linear TV. With linear, you couldn't precisely target an individual household or a consumer if they're watching on like a tablet or phone. With the advent of streaming TV now, everything is delivered with precision. Each individual entertainment consumer could now be watching a different show at a different time, all on demand. That now presented the opportunity to also do that with the advertising, that the different people can be seeing different ads based on the interest they've demonstrated. A big part of our solution is the targeting. Who is the right person that's going to be interested in this product?
Remember, our customers are small and mid-sized businesses where they're looking for the next few thousand customers, right? So you really have to pinpoint and target them, and we provide that as part of our tech stack to do it.
Got it. That makes a lot of sense. And you drew comparisons earlier with MNTN for kind of Google for search and Meta for social. What's similar about the model and then what's different to doing it on TV as a medium?
Yeah. So what's similar about the model is it's all outcome-based. In other words, no one wakes up in the morning and says, "I want to buy ads from Google," right? They go, "I want Google to drive engaged consumer traffic to my brand," right? Either via search or now AI Overviews, whatever that medium is. It's the same with MNTN. Our customers don't come to us and say, "I want to buy TV ads." What they say is, "I want to get more consumers to my brand leveraging television as this medium that's now opened up to me." So in that sense, there are the similarities. The parts that are different is television is a 30-second, it's a medium to tell story, right? So it's a full 30-second ad. It's on the largest screen in the home.
So you think of a social ad that's on a 6-inch screen, like on your phone. You think of a TV ad, it's on 65. I have a 75-inch. It's on a big screen, 30 seconds, unskippable. And it's advertising that's within content that is some of the most engaging content that you see out there. Maybe a comparison is something like YouTube. You go out to dinner with your friends. The thing that the conversation inevitably turns to is, "What's the show you've been watching?
Every time.
It's the hottest all the time, right? It's not like what podcasts you watch today. As a matter of fact, you might want to keep that a secret, right? It's always so having those brands, kind of engaged emerging brands, also be against the content, I think is a real complement to all the work they're doing in other mediums also like search and like social.
Makes a lot of sense. And you talked about outcome-based, and I know MNTN brands itself as Performance TV. So I guess, how does that Performance TV differ from what I guess we would call the traditional brand-oriented TV formats?
Yeah. So the way to think about that is think about for what you refer to as kind of the global brand format, everyone in America, virtually everyone in America can become a T-Mobile customer. So what their job, their marketing team's job is to remind you of that. So we refer to that in the brand advertising arena as reach and frequency. How many people am I reaching? How often? So when they are at that moment that they're like, "I want a new phone. I don't want to be on AT&T anymore," the first name they think of is T-Mobile. That's their marketing team job. Now, on Performance TV, it's I have to present. The customer doesn't even know they need my product. They might not have heard yet of my brand because I'm this I say I'm represented as a MNTN customer, not MNTN.
So as a MNTN customer, they might not have heard of that brand. So it's a very different job. You need really precise targeting. You're probably looking for thousands of people or customers that are going to buy that product. So it's ultra precise in terms of how you find the consumer. And it's a whole tech stack of technology and data to do precision targeting. And then you have to make it easy. These are marketers. These are not kind of big media buying teams and large agencies. This is a business owner. This is a small marketing team. And then it has to be measured. How did that contribute to my revenue? And so those qualities of the precision, the precision targeting, precision measurement, and the ease of use for the marketing team is very different than kind of the large global brand with 50-person agency team.
Great. And then I think we touched on this a little bit earlier, but you've said that 97% of MNTN customers have never advertised on TV.
Right. Correct.
So I guess, why is that important when you're telling the story?
I think it's real. It kind of speaks to your previous question about how it's different. So if you look at MNTN, 97% of our customers never advertise on TV. I think if you looked at the rest of the industry, that number is probably less than 10%. So why that is, is actually answering that question, well, how is that so vastly different? It's all the technology, the focus, the delivery is what makes us different. And it's not that the other people wouldn't want those customers. It's that it takes a very, very different set of technology and a very different focus as a company in order to reach that segment.
And then maybe touching on supply really quickly for your customers, you've built strong relationships with a lot of the major streaming networks. I guess, how do those partnerships work? And how does MNTN benefit the platforms, the streaming platforms?
Yeah. So we have direct partnerships with pretty much every ad-supported streaming network in America, and that's [audio distortion]
I think we're back now.
Okay. Cool. With every streaming platform, and they view us as their growth channel. Remember, if 97% is never advertised on TV, then 97% is new revenue for all of our network partners, so MNTN represents the growth channel in this industry. Literally every day, we add new customers on the MNTN platform, and every streaming network in America adds new customers also via MNTN as a result. Those are strong partnerships. They represent a new cohort of revenue, a new cohort of customers, and the streaming networks just have to be there delivering the content in order to receive it, and we've essentially created that channel for the whole industry.
Over the last couple of days, even a lot of news about the changing streaming landscape and things like that. Does that kind of balance of power or consolidation within streaming, does that impact your ability to access inventory, things like that?
It doesn't. I think if Paramount became part of Netflix, it would probably help Netflix. So that's why I hesitate on the answer. I'm like, yeah, I'd love Netflix to have a bigger team, one that's a little more experienced because they're still learning. But the answer to your question is no. Again, the revenue we're bringing in the industry, all the streaming networks are enjoying that growth also. And any consolidation, I don't think makes it easier for them to access this cohort of customers because these customers need a fundamentally different tech platform in order to make television a viable platform. And that's what we provide.
And I guess it's an interesting question. How did you build these relationships with a lot of these streaming platforms? It's not like I'm sure they get any number of inbound requests for access to inventory. And then I guess, what does that say about your competitive position?
Yeah. I mean, part of it was scale. We've reached scale. That's just very, very important to them. Also, it flows very easily. We're not in that. MNTN's a tech platform. Half the people in the company are in the engineering team. So they get new revenue without extensive relationship building. We're just in this together. This cohort of customers is really excited about television. We bring them into the market. You benefit, and it's a really easy relationship, and they can count on MNTN. We're also growing pretty consistently, and I think that's really important because I don't think there's any other segment of the market where they can count on the level of growth that we're bringing into the industry, quarter-over-quarter, sequential growth, year-over-year growth, and so that's really, really important. I think we truly are the growth channel for all of these streaming networks.
That makes a lot of sense. And then you mentioned about half the company being in the tech practice. So let's talk about the technology. So what are some of the key components that make MNTN's platform work? And how do they help drive those performance outcomes?
Yeah. There's a number of pieces, so one, it's all self-serve. There's no media buyer needed. This is built for marketers, purpose-built for the SMB market. They can go create an account, and they feel really comfortable in there. Our customers don't have TV ads when we meet them, so we built AI, initially a marketplace of creators, and now also generative AI tools in partnership with Google, Eleven Labs, and others so that they can build professional-quality creative using AI. We provide all of the targeting technology to really precisely identify who their target consumer is and then find them, and then, of course, a full programmatic bidding stack to actually buy those ads through those partnerships, and so all those pieces and finally measurement, so all of this has to be measured for how much revenue is driven.
You mentioned earlier looking at a platform and its visits and conversions and cost per visit, return on ad spend. These are all the key metrics of marketers, of performance marketers. So everything I mentioned, including that there, plus more, go- to- market strategy for more competitive mode. And so in terms of competing with MNTN, you have to compete. You can't just have one of those things. You have to have all of those things. And again, they have to be purpose-built for the SMB market.
Let's drill down into that point on creative because I'm putting myself in the shoes of a truly small or medium-sized business. It's like, I can't advertise on TV. I don't have a production studio. I can't hire somebody to come and film me and my products. How does QuickFrame, your creative solution, QuickFrame AI, help lower those barriers for your customers?
Yeah. So before QuickFrame AI, we had QuickFrame Marketplace, which I mentioned was a network of independent creators like Uber for creative. What QuickFrame AI has done is it's, and that cost was in the $2,000-$5,000 range. These brands, they often have a lot of video. They're good at social. But it wasn't a form of a 30-second commercial, a clear call to action, and other best practices. So they can team up with a creator and actually have very good creative. With QuickFrame AI, that cost has come down both in time, two orders of magnitude. In other words, it's 100x faster. It used to take about 40 days from the time you say, "Start creative," to having some with the back and forth to having something done. Now it's less than a day. So it's about two orders of magnitude, 100x faster.
In terms of cost, it's about 10x less expensive. What I think you'll see brands do, one, it makes it so much easier for them to start. Two, they'll be able to have a lot more creative, which is a really important element of doing performance marketing. You want to be trying a lot of different ideas and seeing what resonates with consumers.
That makes sense, and then kind of zooming out a little bit. Everybody in the ad tech ecosystem is talking about CTV as a kind of secular growth format. Everyone wants to be there, so where does MNTN sit kind of relative to players like The Trade Desk or Roku or some of the other entrants people have heard of?
Yeah. So most of those companies are. Roku is a partner to MNTN because they have content, and we partner with them in terms of accessing that ad inventory. Trade Desk, we have no overlap. We're just in two separate lanes. They obviously have done a great job in kind of more of the holding company brand advertising arena. MNTN, again, I've mentioned a few times, it's like we are built for the SMB market. So we have complementary relationships with those companies. It's been great. The DNA to do performance marketing is just so different than the DNA that when I say DNA, the people, the motion, the questions, everything that you see inside of a large agency sitting inside of like, for example WPP. We view them as two different lanes. They think sometimes complementary. Trade Desk is very focused on identity graphs.
We're very focused on identity graphs. No reason we can't work together.
You do have collaborative opportunities.
Oh, yeah. Absolutely.
Interesting.
Right now, I think creative is a good collaborative opportunity. Trade Desk and essentially the rest of the industry.
Very cool. So obviously, MNTN with the IPO earlier this year. Since then, we've been following your reports, and the numbers have come through quite solidly. So what's driving something like the margin expansion that we've seen, and how scalable is your model overall?
Yeah. So I think the margin expansion specifically, we've been able to continue to reduce our cost, basically our cost of hosting to manage this amount of data. Programmatic auctions with upwards of 4 million bid requests a second. It's very expensive. And we've been able to partner with Google and others in order to kind of continue to bring that cost down as a percentage of our revenue as we kind of continue to increase the scale. So that's kind of efficiency. And so the margins, I think right now are for the last quarter are just under 80%. And we think that's a really healthy level. In terms of what was the other part of your question?
Just kind of the scalability of the model.
Oh, yeah. We consider it very scalable. In order to grow our revenue, we don't have to make big changes. A number of our customers prefer to be self-served. So it's more of a matter of marketing in order to make them aware of the solution. And then we have very, very efficient ways for customers to go live on our platform and to increase their spend over time. And so, yeah, you've seen that even as we continue to go down market, we do that very, very profitably, which I think for a lot of companies separate from MNTN in the past, it's that the customer acquisition is too expensive, but we've been able to do that really efficiently.
Yeah. I'm sorry. I don't mean to interrupt, but I just think overall, it's kind of a good reminder for investors to look at the ex- Maximum Effort numbers, which you've disclosed on some of your recent quarters as kind of like the go-forward trajectory for the business.
Yeah. Exactly. And those numbers have been pretty consistent growth over a long period of time.
Great. And then getting into growth drivers. So what would you highlight as some of the most important growth factors ahead? Things like product innovation, AI leverage, content partnerships, etc.
Yeah. So we continue to leverage AI in order to make things both more efficient for MNTN as well as more efficient for our customers. So that's really, I think, important. It allows our customers to go live faster. It allows them to have more confidence that the cost is predictable. There are not going to be any surprises or anything like that. And then we continue to innovate. We have new features like AI media planning, other AI optimizations on performance, and we have new products that we're always working on. One out of every two people working at MNTN is on the engineering team. So we have a lot of interesting tech that we're planning to announce over the next few quarters.
Very interesting. Can't wait to hear it. So as we look out in the future, whether it's 2026 or the medium term, next few years, what does success look like for MNTN?
I think continuing to grow at the scale and kind of trajectory that we have while continuing to expand our footprint both down-market more. I don't think you'll see us go up into the enterprise, but really capturing more of that mid-sized market and just Performance TV being like a standard part of every marketer's tool bag. If I went to a marketer right now and I said, "What do you do for marketing?" and they didn't mention search, you would be like shocked, right? You would be like, "Wait, what?" Or even email for that matter. Yeah. You don't do email campaigns after someone bought your product and try and increase lifetime value. We think we can get streaming TV, Performance TV to that same level, and that's the ultimate measure of success.
Kind of how I net it out very simply is that someone would be surprised if you weren't doing this, and so that's kind of the mission of the company and my mission also.
Understood. Well, we're looking forward to following the trajectory. I think we'll wrap it up there. Mark Douglas, CEO of MNTN, thanks for joining us.
Thank you.