DSP Q1 2025: CTV Spend 45%, Delivers 200% Incremental Lift
- Strong CTV Growth and Incrementality: The Q&A highlights that CTV now represents around 45% of platform spend, with robust incremental lift (up to 200% compared to other formats) driving ad dollars to Viant. This shift in advertiser emphasis from last-touch attribution to incremental impact supports a bullish narrative on CTV dominance and long‑term growth. [Index 11][Index 16]
- Robust Pipeline and Mid-market Upside: Executives emphasized a very strong new customer pipeline with greater focus on larger mid-market accounts and Fortune 500 brands shifting spend to Viant’s unique offerings (Household ID, IRIS_ID, and ViantAI). Continued new business momentum, even amid temporary spend deferrals, underscores resilience and long‑term revenue growth potential. [Index 15]
- Competitive Differentiation and Pricing Efficiency: Management’s discussion on lower incremental fees, a transparent pricing model (e.g., no fees for Direct Access), and a uniquely differentiated product (Household ID based on physical addresses rather than digital IPs) positions Viant favorably against competitors like Google and Amazon. This competitive edge in both efficiency and technology supports a bullish outlook. [Index 13][Index 24]
- Deferred Ad Spend and Revenue Uncertainty: Several analysts pointed out that a small group of key advertisers—approximately 5 large customers—have delayed spending from Q2 to the back half of the year due to tariff-related uncertainties. This deferral is expected to reduce Q2 revenue growth by about 3%-4%, potentially causing near-term revenue volatility and slowing growth momentum.
- Competitive Pressure from Big Tech: Executives faced pointed questions regarding the evolving competitive landscape. Remarks about Google’s new use of IP-based identification and comments on Amazon’s potential to expand their ad spend in retail highlight concerns that these dominant players could worsen competitive pressures. If these competitors successfully leverage their scale or technological advances, DSP may face a more challenging environment in retaining and acquiring advertiser spend.
- Pricing and Margin Pressures: During the Q&A, executives defended their pricing model by comparing it head-to-head against competitors; however, questions around the lack of incremental fees versus competitors like Trade Desk indicate potential risks. If advertisers increasingly scrutinize the total cost of DSP plus data and favor platforms with lower incremental fee structures, DSP could experience margin pressures and pricing challenges that might impact profitability.
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Deferred Spend
Q: Impact of Q2 deferred revenue?
A: Management explained that about 3%–4% of expected Q2 revenue is deferred from a handful of larger customers, effectively reducing Q2 growth by roughly 4%–5% as they shift spend to the later half of the year. -
Margin Outlook
Q: Will margins expand year‑over‑year?
A: Despite a slight timing effect in Q2, management remains confident that revenue will outpace expenses over the full year, leading to margin expansion in adjusted EBITDA relative to contribution ex‑TAC. -
Competitive Threat
Q: How defend against Amazon’s push?
A: Leaders noted that while Amazon’s data strength is significant in retail, its influence is limited in other verticals; Viant’s self‑service DSP approach and focus on mid‐market advertisers remain well defended. -
Advertiser Shift
Q: How shift spend from search/social?
A: Management emphasized that they educate advertisers on the full consumer journey and incremental lift—highlighting that channels like CTV can deliver up to 200% incremental lift compared to traditional channels—prompting a reallocation of spending. -
CTV Resilience
Q: What customer sentiment on CTV?
A: Executives stated that customer feedback is very positive, with CTV commanding over 45% of platform spend and demonstrating resilience even amidst some deferred investments. -
Household ID Differentiation
Q: How is Household ID unique?
A: The tool is based on people‐based, physical address data rather than the digital IP addresses used by competitors like Google, offering more reliable identity matching. -
Growth Trends
Q: Are new customers and April trends strong?
A: Management observed persistent, month‑over‑month growth—with April performing strongly—and noted an increasingly robust pipeline of larger new customers enhancing overall contribution growth. -
Direct Access Expansion
Q: Any plans to extend Direct Access?
A: While the platform does not charge fees for Direct Access, management is expanding partnerships with premium content publishers, which in turn drives efficiency and higher advertiser spend. -
Opex Outlook
Q: What about operating expense trends?
A: They expect non‑GAAP operating expenses to rise roughly 16%–17% year‑over‑year in the back half of the year, maintaining disciplined cost controls despite acquisition-related costs. -
Vertical Performance
Q: How are key verticals performing?
A: Management reported minimal auto exposure, moderate retail impact—with notable resilience—and consistent, steady growth in the public sector, underscoring a balanced customer base.
Research analysts covering Viant Technology.