So on the stage, Ofer Druker, CEO of Nexxen International. Ofer has served as CEO since April 2019. He joined in 2017 as Executive Chairman of Tremor Video Division. Prior to Nexxen, Ofer founded Matomy Media Group in 2007, a data-driven digital advertising company, and he was its CEO until 2017. Ofer also co-founded AdsMarket Group and XtendMedia.com, and he graduated from Tel Aviv University with a BA in Middle East and African Studies. Okay, so let's start with—I want to start with leadership. I want to start with, I keep track, as you know, every quarter of sort of productivity, revenue per FTE, full-time equivalent.
Can you talk about, when you think about culture, what is the culture you're trying to build at Nexxen, and what data metrics do you use to figure out whether it's actually working?
Okay. So we just spoke about it, but-
Yeah
I think that the culture that we are trying to achieve is to create, first of all, no ego.
Okay.
People needs to learn all the time. People needs to be curious about what they are doing and passionate about it.
Okay.
I think that there is not like a textbook that you can read how to build this type of businesses and manage them. So basically, you need to learn from every day from what you are doing and to take decisions.
Mm-hmm.
Teamwork, which is very important and open to changes and to learn things because I think that also from the culture that I was brought and got my basically background, you should challenge yourself all the time.
Okay
A bout strategies, about what is the direction that you are taking, and not to sit and wait for the industry or the situation to surprise you, but to be always in front of what's going on. So this is the culture, and to not to be afraid to make a mistake also.
Okay.
The only people that are not making mistakes are people that are not doing anything.
Okay.
So I believe that you need to be in, t hat's basically the culture that we are building and doing, and I think the emphasizing to our employees, pushing them to be successful, to ask from their self for more, to ask for more, to challenge us, not to say yes, yes, yes, but to challenge us all the time. Why you are choosing this path? Why you are building this technology? I think it's very important, and I think that in the modern companies and modern, let's say, economy.
Yeah
T he knowledge is not with us, the CEOs, honestly. It's, you need to be open all the time for the people that are dealing with the stuff, that are in the details, to learn from them, to listen to them, to take them into account when you are taking decisions, because without it, you will make mistakes.
Okay.
So-
Okay.
You ask about measures, I think it's the results of the company. When you are following us for a couple of years.
Mm-hmm. Yeah
Y ou see how effective we are and how we are basically, even in tough situation, we know how to keep our profitability and direction, which is a lot of discipline.
Mm-hmm. Okay. Tying that to work from home, what's your work from home versus work in the office, and how many people are not coming into the office on required work days?
Oof. It depends on the culture. I'm always giving an example that in our office in Israel, even when missiles are being shot on Tel Aviv, we need to keep the people out of the office. Everybody wants to come to the office, so it's a little bit different than other places. But we are now asking the people to come at least twice a week to the office.
Okay.
Unless they are very far away and very remote, which, and then we need, of course, to approve it and accept it.
Okay.
But in general, we are asking the people to come twice a week, at least twice a week.
Okay
W e probably will increase it to three days a week in the future, because I think that the small things that, like gestures, that you are talking to someone in the kitchen, like we just discussed.
Yeah
A nd getting more information, feeling your counterpart in a matter what is their feelings, or sometimes, like unofficial discussions, which are not only by scheduled Zooms and stuff like that, are very important in order to move the business forward.
Mm-hmm.
And I believe in personal engagement, meaning that you need to be in the room to talk to the people, to feel them in order to create the energy, in order to create a win, basically, and the right direction. So I'm trying to bring the people to the office.
Okay
I n general, but I understand the situation, so we are twice a week now, and in the future.
Would you expect, does 60% of people show up on those days, 80%? What percent-
We have now.
Obedience do you have to this?
I think that most of the people, let's say, that's supposed to come to the office, like more than 80% are doing that.
Okay.
I think that it's a matter of, I think that to give them the understanding, because some of them, we need to remember, joined the company during Corona. For them it's their lifestyle. They are young, they are in the business like three or four years. That's what they are used to do.
Yeah.
So we need to change it for them and to explain to them how it's important to be together. I think that the world in a way, from 2020 to today, like, it's a long period of time already.
Yeah.
Change is habits, and we need to... In order to change the habits, it takes time. It's not over one night.
Right.
There are people that came to the company and left the company without being in the company.
That's crazy.
Yeah.
That's crazy, because if they stay two years, they might never have come in.
They never come in.
At all.
One day, I was sitting in the office. I saw someone came in, take something. I said to him, "What are you doing?" He said, "I'm taking my bag. I left it here, like, two years ago, and now I came. I'm leaving the company, so I came to pick it up.
Oh, my God!
He was never there.
That's crazy.
When you look at it like that, it's a challenge, yes.
That is really hard. Okay, so congratulations on finalizing the rebrand from Tremor International to Nexxen.
Yeah.
Why don't we start with a bit of background? For those in the audience who aren't as familiar with Nexxen's story, can you give a quick overview of the company, its product strategy, and where it fits into the digital advertising ecosystem? I am now gonna go to sleep for this, but, okay, let's go.
No, you're not going to sleep. I will make it very, very short.
Okay.
We are data-driven technology platform that serves mostly CTV and video. This was our strategy when we started this journey of getting into video in 2017.
And we followed that. So we believe that video is the most engaging format in so many ways, and if you look at the graphs of growth and CAGR in the coming years until the end of 2026, you see that that's the growing format all over the world and in the U.S. in particular. So and we believe in that all the time because this is basically. The video is also representing the bridge between linear and digital in so many ways.
Okay.
So that's video. And the CTV, like, we were, like, in 2019 when we acquired and merged with RhythmOne, one of the major reasons was, first of all, to create end-to-end solution, but the second thing, it was the CTV element of RhythmOne, that they acquired YuMe a year before. And YuMe was all about CTV. And we believe that if you're looking at the format, it's video. If you're looking at where to run the ads, we believe that CTV is the massive and the most important platform in today's world for online advertising. And for us, it's not just a slogan. About more than 30% of our net revenues is coming from CTV, and all our innovation and investment was around that. So when you're looking at that, it's like when I'm saying video and CTV, it's meaningful.
And the last point, when I said data-driven, so we believe in data. We believe that data is available, of course, to many, many people, but you need unique and something that is more effective, and we believe in ACR, which is automatic content recognition.
Tremor was doing that from 2016. We acquired the company in 2017, but we continue this philosophy and practice until today. We did a deal with Hisense that is now kicking in. We spoke about it a lot, so sometimes it looks crazy, but Hisense became now, if you look at shipment of CTVs and TVs, they are second to Samsung globally. So they took, like, a very big, they made a very big push in distribution of their TVs. We basically partnered with them for the next couple of years to being able to harvest their ACR data. What does it mean? It's basically the data from the-
This is not a short answer.
From the glass.
You're going to make it shorter.
That's it. I'm finished.
Okay, good.
That's the last.
Good. So why rebrand? This is a big question for me. You guys have spent a year rebranding.
Why? We didn't. It's the first rebranding. It's the first name that I choosing for the last 10 years, so yeah.
Okay, but for the last year, we've been working on this. My question is why is this a strategy? Strategy is what you say no to. So the idea that we rebrand in an enterprise-to-enterprise business, this isn't a consumer-facing business, it's an enterprise-to-enterprise business. Everybody knows who you were before. They all know who you are now. Why isn't a rebrand just a big waste? Why isn't it a big distraction? How does it add value?
Oh, it's easy.
Why?
Ask me all-
No, not easy. The analysts.
It's easy
D idn't get it, so please explain.
No, so I will explain. So firstly, first of all, in the last 6 years, we made a lot of acquisitions of technology companies. I think that if you look at the, w e made Tremor in 2017, RhythmOne, then we did the Unruly and Amobee and Spearad on the way. So we acquired a lot of technologies that if you accumulate all the money that was invested in these technologies, it's like $hundreds of millions. But in the end of the day, only last year, we connected the last piece, which was Amobee, which is the biggest piece, into our technology stack, and we created one platform. In order to represent the one platform, we decided to call it one brand, because you cannot say the DSP is Tremor, the SSP is Unruly, the DMP belongs to these guys.
It's conflicting and complicating the story. So we decided to call it one day in order to demonstrate that it's one platform, which is meaningful. And we were the first one that believe in end-to-end from 2019. I remember that people were laughing at us in the beginning when we did it, but I think that it was everyone is now imitating that, so it means that it's probably right with all this supply path optimization and all these capability. SSPs are reaching out to the demand side, demand side is reaching out to the supply side. I have no issues with that, but it just show that it's right. When we connected everything, we needed to bring it under a new name.
First of all, to the market, our but even that it's like enterprise to enterprise, people understand better when it's like sitting under one brand. Second thing is to our employees. Our employees, when we acquired Amobee and connected them to us, we are trying to create a situation that everybody feels that is partnered by creating something new and exciting. When you are changing the name, you are basically building a new culture, a new company, a new entity, and we want everybody to feel that they are part of that. The last point, which is also very important, is the financial market. Just to explain what we are doing with all these different names was very complicated to analysts and to shareholders and to potential investors. Now, we are one company.
We have a lot of work to do now in order to explain to the market what we are doing, who is Nexxen, but I think that it was very important to do that, and I feel very strong about it because I see that our people that are in the market, it's easier for them to explain who we are, and also for me. When I'm talking to business partners, to potential investors, to shareholders, it's much easier when you have one brand.
Okay. So you bought Amobee in September 2022, and you completed the integration in mid-2023. On the third quarter call, you said that Amobee had helped your data and tech capabilities, which had enhanced your DSP and TV planning features. Now that you're over a year into the acquisition, I think September 12 was the anniversary.
Yeah
B eing completed, can you talk about what Amobee—no, I don't want you to talk about what Amobee is. But I want you to talk about, to date, how you've seen it accelerate your financial progress and what it's doing for the overall business synergistically.
Okay. So we acquired Amobee for a few reasons, but the major one is technology. When you're looking at Amobee, they basically acquired their assets for about $1.2 billion over the years. And it's a lot of technology, that was a lot of man-hours and technology that was basically built, and they built a very strong enterprise DSP solution, which we believe, and we still believe, because Tremor DSP was very good in buying media, but was not as sophisticated on the enterprise part like Amobee.
Mm-hmm.
So basically, we moved the capabilities of Tremor into Amobee DSP, and we sunset our DSP.
Yeah.
Now we have a very robust enterprise solution DSP that is helping us to build long-term relationship with clients.
Okay
And predictable revenues in the future, which is very important, of course, for a company and for its investors and stakeholders. The second thing is about the cross-platform TV platform. So, I'm maybe I look young, I'm joking, but you know, when you're looking at it, for over 25 years now, people are talking about the conversion between TV and digital, basically.
Yeah.
I think the moment has come now.
Okay.
So what we see now, that the number of households that are basically keeping their Linear TVs is going down dramatically. There are numbers that it went, like around 50 million or 70 million.
Okay.
And when you look at, like, a few years ago, when it was almost double or more than double, it means that advertisers that are being relying on linear needs to move also, to shift also to streaming and, and digital in order to reach their audience. And when we look.
This relates to Amobee because?
Amobee has the cross-platform technology.
I see
A nd the linear planning that is helping us to do that.
I see.
We are unique in that. I think that Amobee basically built it almost 10 years ago.
Okay
A nd they spent a lot of money and resources in doing that, but they came too early to the market with their product, and I think that now it's not immediate, it's not click of a button, because all these broadcasters and people that we are looking and working with, their decision-making and their ability to move fast is limited because of their size and their complexity. But I feel that this is the right time for people to look at that and shift their agenda only from linear also to digital, and we can be a very strong part of that, thanks to Amobee.
So I have a good question. You're an Israeli tech company sitting in Israel, but you felt... And managing a tech stack, but you felt that your tech stack was so weak that you had to buy Amobee and shut down yours because they had built a better one. Are they sitting here? Is Amobee here, or is it?
Amobee, Amobee-
Where was it sitting?
Amobee is all over the place, but they're U.S., and Tremor is also, by the way, is not Israeli. It's like 90% of our revenues is U.S., and most of our employees are sitting in the U.S. 600 out of 900.
But isn't your tech stack sitting in Israel, where I visited you? Aren't those the tech guys?
We have a few centers. That's one of them, yeah.
Okay, but my question is, if you're running a tech company, how is it you let your tech stack fall so far behind that you had to go out and spend-
We didn't fall back.
$1 billion to buy somebody new's tech stack?
We didn't fall back. If you look at the achievement that we managed to do with Tremor, it was amazing. We grew in 2021, 100%-64% just on the EBITDA side and 64% organically. So in 2022, because we had such a great year, it was we had like a, we didn't grow so much. But when you look at that, we had an amazing technology, but it was not an enterprise technology. It was media buying technology that we are managing it. So we managed the platform.
Managed service?
Managed service.
Ah, okay.
We needed-
Amobee is self-service?
It's self-serve.
That's a big difference.
It's enterprise.
Okay, that's totally fair. Okay.
I said you have always need to challenge yourself.
Yeah
A nd you need to look for new ways and not to be surprised from the market.
Okay, so you're running a managed service business, but by definition, I think managed service businesses don't need as good a tech stack because you're solving all the problems, yeah?
It's not true anymore, by the way, but it's like, it's different. I think that, I think that self-serve and managed is a little bit different technologies and emphasizes that you are putting on features and stuff like that, but both of them needs to be robust and strong and good and advanced.
So in 2024-ish, what's gonna be your managed service, self-service revenue mix?
So it's now. When you're looking at, when you're looking at Nexxen and when you're looking at 2024, I think that we have two elements that are growing, basically. We have a, we have four business models that are driving revenues for us. We have the managed.
Yeah
W hich is the anchor, and it's driving a big portion of our revenue.
Yeah.
We have the enterprise solution, which is growing, and it's basically, also, we are working now to enhance it because we pushed much more resources into sales teams and growing the sales initiative that we are doing, and we have much more to offer now because we have the full stack. So people can use all our technology or some portion of it.
Okay.
The third element that we are driving revenues is PMPs, which we are very successful at that, and that means that-
Which is Private Marketplace?
Yes, but we are not using, in this case, our DSP, as you know, and the last one is OMP. So I think that.
OMP is?
OMP is open marketplace, so people buying on your SSP media. So basically, when you are looking at the relationship of managed, it's still meaningful, but it's the growth now that we are representing is coming from the enterprise and from the programmatic marketplaces that is growing more than the managed in the future.
Okay, so where is Amobee in this list of four?
Enterprise.
Okay. Which is self-service, you just said?
Yeah, enterprise is self-service.
Okay
A ll the same.
So going back to my question, when I look at managed service versus self-service revenue mix, is it 50/50 in 2024? Is it 70/30?
It's like, we are not counting it like that. We are looking at that as programmatic activity, which is?
Which is self-service.
W hich is the private marketplaces that we manage. Everything is programmatic, right?
Everything is programmatic, yes.
Yes, but the PMPs is now growing, the managed is growing, and the enterprise is growing. But if I'm looking at the ratios.
Yeah
I t's like, it's bigger a little bit. The Net Revenues of the managed is a little bit higher, so it's like-
It's like 50/50?
Yeah, it's like the managed. If I'm adding the PMP and the enterprise, and I'm putting it with the managed, it's like 50/50, almost.
Okay, and before we bought Amobee, was it like 80-20, or was it like, what was it?
We didn't add two things with Amobee that. First of all, it's a strong enterprise solution that we can integrate.
Right. Mm-hmm.
The second one is also display.
Okay
M eaning our company was focused only on video in the past.
That's true.
Now we started to basically push also for display because it's omni-channel that people are looking to buy.
Right. Well, and I think one of your strategic positions when you came public is you did video only, video and CTV, and I think Amobee sort of softened that messaging because you went backwards into mobile and desktop which is where most people began.
Yeah. It's softened, but it's still close to 70% video, our business. So even that it's soft it's much more than most of our peers, video element, and I believe that it will regrow again and will be even more. Because, again, everything that we are looking at, conversion between linear and digital will be on video basis, meaning all these, linear advertisers, they are using video in order to advertise and they will shift also to digital.
Okay. Okay. Yeah, well, it definitely added a bunch of, like, new products for you that you didn't have before, like adding the self-service, which I didn't know it was self-service, so that's cool. And then also adding, I would say, really more advertisers are going full stack. It added a bunch of pieces to the full stack that you didn't have before when you were video only.
Agree.
Sort of everybody's doing everything, sort of.
It's not, it's not everything. I will be careful with this because you look like a big supermarket, which is not right.
Okay.
We are putting our emphasis all the time. In the last six years, we invested all our money, all our innovation around video, CTV, and data.
Okay.
Sometimes you need to integrate also some display inside because you need to give, provide omni-channel, but you didn't- we didn't changed our focus, which is video, CTV, and data, and I think that, to be honest, that's- if I'm looking at the crossroad of these three elements, that's the growing element that are pushing the industry forward in the future.
Which one's growing?
CTV, data-
CTV?
A nd video, all of them. So each one of them, when the market is good, they are taking you up a lot.
Yeah.
But it's full branding right now, and that's was tough years in the last two years.
Yeah
A s you know.
Yeah, it's been horrible two years. Okay, let's do Nexxen Discovery. On the third quarter call, you mentioned that this product, Nexxen Discovery, has the potential to generate interest with political advertisers and agencies ahead of the election cycle. GroupM just upped their estimate again. We're now at $17 billion of political-
17 billion.
17 billion in this year, starting like, like tomorrow. And, up, it was at 15 before, another guys had 12, so it's gonna be record-breaking. So can you talk about how your Nexxen Discovery better positions you with political advertisers for- in 2024, and what it could add to revenue growth?
Of course. I think that, as a former intelligence officer, honestly, when I'm looking at a discovery tool, I'm impressed. I think that it's a very good platform because it's providing you a lot of capabilities to learn about your audience.
Okay
H is behavior, his where are they surfing, what is their favorite, what sites they are surfing, what they are responding to and what is their basically sentiment to brands, to issues, to a lot of things that are meaningful for political season.
Like, you can feel what is the sentiment to the Republican Party or the Democrat, Democrat Party, why it's fail and why it's grow up by click of a button, basically, in every DMA that you're looking at. And you can create a segment and target these audiences with messages that will basically trying to fix it. Not always you are successful.
Are you using Gen AI to do that, or no?
What?
Generative AI, are you using to do?
What is Gen AI?
Generative AI, like, ChatGPT, are you using any new?
No, no, no.
Okay.
Our system is doing that.
Okay, no problem.
Basically, it's giving you, like, ability to understand your sentiment.
Right.
And basically target messages and send them to these audiences in a very speedy way.
Okay.
This is all about managing a campaign when you're running it. When we are demonstrating it to companies in the political arena, they like it a lot because they feel that it can serve their clients in the best manner.
Okay. Well, how big do you think political could be in 2024?
It's changing every minute. I don't know. You're change, you're?
No, I'm changing the macro estimates.
No.
How big do you think it could be for your business?
Listen, it's very hard to give you a number. To be honest, last four years, there was such an expectation that it will grow to the sky, and in the end of the day-
But what about for you guys historically?
It was not meaningful because we didn't have the tools like we have today. So I think that this year we are expecting more, but we are not going to talk about forecast.
Do you think 1%-3% of revenue would be?
I don't know.
In the ballpark?
Yeah.
Small. Okay.
No, I don't know if it's small. It's too early to say, but you know, it's very hard. It's very hard still to say. But we are engaged with a lot of parties around it. We are talking to them, we are educating them about the platform. Some of them basically already adjusted and taking this and license these technologies in order to use it, but it's too early to say what will be the spend.
Okay. Interesting. Let's talk about VIDAA, which is one of my favorite products in your portfolio, the data. Okay. So, VIDAA is the CTV operating system for Hisense and Toshiba TVs, and you invested $25 million in the operating system for ACR data exclusivity, I think through 2025, right?
6, end of-
Through 2026
End of 2026.
End of 26.
Yeah.
End of 26, okay. You've been monetizing the ACR data in the U.S. for a little bit, but you recently launched the offering in the U.K., and you plan to launch in Australia in the current quarter. Can you explain what this product is and how it helps customers? Also, what's feedback and adoption been so far, and how big could it be?
Okay. So VIDAA, we got with them two major assets. One of them is the ACR data that you just touched.
Yeah
A nd we'll talk about it in a minute. The second one is exclusivity on the media that is running on the VIDAA platform, OEM. So just to put some order, VIDAA, it's a subsidiary of Hisense. Hisense is one of the biggest manufacturers of consumer electronics in the world, Chinese manufacturing a lot of wide devices, but also a lot of televisions. And they even acquired the TV division of Toshiba a few years ago, five or six years ago, which now runs under Hisense. And VIDAA is also integrated into additional 100 brands of TVs as an operating system.
What we are doing with them, we basically integrated our technology into their technology, and we are collecting the data from the glass, what people watched, which is priceless information for targeting, for measurement, so, and research, because you know what people watched, what series people are watching, what, which. You know, for example, if you are thinking about it, all the big apps like Netflix and Amazon and all these guys, when you shut down their application, they are blind.
We can see everything that is happening on the screen, basically, which is very powerful for targeting. From our experience, there are verticals like entertainment, auto, QSR, retail, technology that enjoy from that. They know how to use this information in order to improve their results when they are targeting results. There is a lot of measurement companies that are basically using this ACR data in order to, to measure and provide services to their clients.
So this data, first of all, is helping us to serve our clients, and we have also the right to license it to other companies, and we start doing that lately. Because until now, we basically built the technology, start to, you know, to upgrade the platform from the distance with this technology and to gain access to the market. It take time, and we reached good numbers in the end of last year that we are already using it in the U.S. Last quarter, which was Q4 of 2023, we launched in the U.K. Next quarter, we will launch it in Australia.
Let's size that. Vizio does this exact same thing. They have a data product in market, and they make $100 million a year. How big could this data product that you're selling to others be in 2024?
So Vizio is in the industry for many years, and they are doing a great job, no doubt. I think that, but when you're looking at the future, we believe that, in the future, basically, Hisense, if you look at 2018 on delivery and shipment of TVs.
Yeah
Hisense was number four, about 12 million devices. If you're looking at last year, they delivered almost 25 million devices, which was second only to Samsung.
Tell me about the data revenue stream for Tremor?
So I think that it can generate meaningful revenue streams in two elements. One, our own activity that we are selling a nd buying media. The second one is licensing.
Okay, so tell me what that number is going to be in 2024? It's my third time I've asked.
I know.
Same question.
The fourth time that I'm trying to avoid telling you.
Avoid it, yes.
Yes.
But is it going to be, like, 1% of revenue? But, like, I don't care about-
It's hard to say that.
How do you turn it into.
B ecause I don't want to miss. Again, if I will tell you 5%, but then it means what? Because it's part of it is activity that we are doing when we are selling media and interacting ACR into the campaign. Okay?
No, no, I'm talking about third party, this licensing piece.
It's hard to say. I cannot answer this question.
We don't know this.
No.
Okay. All right, because it doesn't seem meaningful to me until it shows up in the P&L, but I understand that you're doing it internally, and it's helping internal. That I get completely.
When it will be meaningful, you will see that, basically, in the numbers, yeah.
Okay. But you put in $25 million, so do you think there's a, like, you're going to be able to get out that value just by using it internally, or do you think to, to pay that back, that investment, you actually need to create some of this data product and make money from that? Which, by the way, there's a lot of demand for that product. I mean, everybody who has ACR data can sell it.
O ne thing, Laura, how many people got ACR data? Do you know?
Vizio has ACR data. Roku has ACR data. Anybody who has it c an sell it.
But they are using it mostly internally as a Walled Garden.
Yeah, but they can also sell it externally if they're willing to. So, but-
That's a big thing.
I'm still waiting to see when are you gonna have this product available to sell.
I will, I will explain. First of all, ACR data usually is used in a Walled Garden, and if you're looking at Samsung, they are keeping it to themselves.
Yeah.
LG is, they have a few partners.
They're using it for yourself.
But we are also, we are able to license it to others.
But until you tell me.
We are going to do that.
T here's a revenue stream.
Let's touch, first of all, the point of $25 million that you mentioned that we invested. So we believe that through the data and the media, we'll be able to provide ourself a return of investment on that $25 million that we invested, basically.
Right.
That's one. But the second thing is that we really believe that VIDAA in a couple of years will be, will become an independent company that will go public or, or will still growing.
Interesting.
Yes, because it's one of the biggest operating system of TV and CTV. So I think we believe in them, and we, we became partners with them, and we invested in them out of the fact that we believe in their future, and we believe in the future of CTV. So we play some skin in the game because we believe that this will grow and be a meaningful company in general, because when you have Hisense as an engine that's pushing them together with Toshiba to their market, they are gaining market share, and they will keep growing, and it's a very interesting company.
You might get a part of return on the $25 million, not from selling data to third parties. You might get it actually on VIDAA coming public and being a separate entity.
It's yeah.
Okay.
It's separate, but it's-
So there's a different way, three ways to make value back here.
Yeah.
Okay, that's actually super interesting. Questions from the audience? Any questions from the audience? Okay, great.
Yeah, we have a question.
Oh, you're good. Go.
Morning.
Hi.
Stock's down 75% from when you guys went public in the U.S. Obviously, you've been buying back your stock over the last couple of years, almost 25% of it. What do you think is the investor misunderstanding of your stock that represents a multiple of around 2x your total a year ago?
It's a good question. A few things. First of all, about the 75%, unfortunately, the market, most of the market went down, but I think that we, from the first place, were not traded in the same multiplier as the market. So I think this is the way that I'm looking at things, at least. I think that we just touch it. I think that it was complicated to understand because we had so many brands that we connected, and basically, it's very hard for, m ost of the investors in this world are generalists. So when you have so many brands, so many names, so many features, it's very hard to understand the full picture.
I think that's what we are trying to do now, is to put some order and to build it as one platform with one brand that will make it easier for investors and potential investors to understand what we are trying to build. I think that it's a challenge, but I hope that we are on the right way because we also hired a new CMO that is coming from a background of product marketing, that knows how to tie things in and to present it in a smart manner. I think this is a very meaningful effect that basically influenced our market share, to my opinion. The second thing, I think, is the fact that we are dual listing, is not doing us. According to people that we are talking to, it's not adding value to us.
So we try to address it in the future, but we need to create the right conditions in order to move only to be traded in the U.S., and I think that it will do us well in the future. But generally speaking, I think that the rebranding will resolve some of these issues, and of course, to perform.
It seems like most people thought fourth quarter advertising business was healthy. It wasn't a lot of cancellation in campaigns. When you first made the acquisition, the large acquisition, about a year ago, you talked about a combination that yields, what was it? $170 million a year from now at a pro forma number, and you have to step down that number this year. But can you give us confidence as investors that $170 is foreseeable in the next 12 or 18 months?
We didn't mention this number going forward because I think the market changed. Unfortunately, in the past two years, I think that since February 2022, there is a lot of uncertainty and a lot of macroeconomics that are hitting the market, basically, and making it more difficult to two things. First of all, to get money from advertisers because they are limiting their spend and their investment, and it's coming. And also, even if they are successful, sometimes because their peers are not investing money, they will lower their investment also. The second thing is, in the last year, I think there was a lot of related issues to CTV, for example, in the entertainment business or auto manufacturer business, that basically affected the prices and the level of investment that people were willing to do in CTV.
Again, microeconomics, you know, I'm using this term, but it's like, I think that it's a little bit confusing when you're looking at Nasdaq and S&P, that is growing so much, and still we are talking about microeconomics issues. But I think that, unfortunately, or we are lucky for that, I don't know, from which side you are looking at things, but it's only a few companies that are basically creating this, this, value in S&P and Nasdaq right now. So it's not representing to our opinion, what's happened in the market in the last two years, one and a half years, fortunately. It was too tough. It was a very tough period of time for companies that is dealing with branding.
Anything else?
You have more question?... That's it. You can replace Laura next time.
So Nexxen is very focused on video advertising. As you say, you started before InMobi at basically all video and CTV. But your CTV revenue fell in the third quarter as customers made near-term shifts into desktop and mobile. So can you talk about what drove that near-term CTV weakness, and do you think that is on the verge of reversing? Because it's much higher margin.
I think it's not the highest margin, but what I want to say is a few things. I think that when you're looking at CTV. F irst of all, we believe in CTV. CTV will keep growing. It's a very important, it's a very important, platform and element in this industry, and it will keep evolving and growing in the future.
We didn't lost our trust because of few quarters that is like suffering or, or, being challenged. But in general, when you look at the market, again, a few elements happen. First of all, when macroeconomics are so, hitting or challenging you, you are moving your spend as an advertiser to a lot of what we call performance-oriented advertising. It's not CTV.
True. Yeah.
It's not CTV. CTV is less for—it's less used now. I think that in the future it will be used, but right now, it's not used for performance. So I think that's one element that basically influence, because people move their spend to what we called, to what we are calling a, a performance-oriented spend. The second thing is entertainment, with entertainment suffered because of all the strikes in their studios and so on. So they are a very heavy user of CTV, and they didn't do that. Automakers, the same. In the past, in the year before, they suffer from from chips, that they stop manufacturing cars, and then metals that they're using for their brakes and steering. And so it was really challenging two years, but these guys lowered their spend also on, on advertising budget in many, many cases.
The last point is that the publishers themselves lower their prices in order to accommodate the situation. When you're looking at the number of impressions in lower CPMs, it means that you are driving less revenue. I think that that's the major effects that happen, but I think that again, when the market will pick up, the first thing that will pick up will be CTV and branding advertising, and we are waiting for that to come.
Okay, I'm gonna call it there, because we're out of time. Thank you very much, everybody, for your questions.
Thank you.
Thank you very much, speaker.
Thank you, Laura.
Great. Do you have,