DSP Q2 2024: AI Bid Optimizer Impressions Jump to 65%
- Strong AI Adoption and Enhanced Efficiency: Management highlighted that the adoption of AI-enabled solutions such as Bid Optimizer 2.0 increased from 50% to 65% of impressions, delivering significant media cost savings and driving incremental performance gains. This demonstrates a clear value proposition for clients and a scalable opportunity for the business.
- Robust Direct Access Program and Premium Inventory: The executives emphasized that the Direct Access program is resonating strongly with advertisers by providing direct access to premium publishers (including players like Disney, Paramount, and more) with differentiated pricing and transparent execution. This has contributed to over half of CTV spend and offers a sustainable competitive edge.
- Transition from Cookie-Based to Alternative Identity Solutions: The team noted that market conversations indicate a declining reliance on cookies, with clients shifting budgets toward non-cookie-based solutions such as their proprietary Household ID, which is scaled across approximately 80% of ad opportunities. This positions the company well for future industry shifts and potential incremental growth.
- Fragmented AI adoption: Current rollout of AI-enabled services is occurring solution-by-solution rather than through a fully integrated autonomous system, which delays realizing synergistic benefits until a complete integration in 2025.
- Potential CPM pressure on premium channels: While premium inventory commands higher CPMs, there are hints—such as Netflix lowering its CPM—that similar pressures could eventually affect overall revenue from premium CTV and streaming audio.
- Uncertainty in transitioning from cookie-based advertising: Although the company expects budget shifts from cookie reliance to alternative ID solutions, the relatively small share of cookie-based spend and uncertainty around timing could delay near-term revenue boosts.
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AI Adoption
Q: How fast is AI service adoption growing?
A: Management explained that AI-enabled services are being adopted solution-by-solution, with Bid Optimizer 2.0 now used on 65% of impressions compared to 50% previously, and a fully integrated autonomous suite expected in 2025. -
Direct Access – Netflix
Q: What about Netflix in Direct Access?
A: They noted that while partnerships like with Magnite provide access to Netflix data, the U.S. consumer base on Netflix isn’t sizable yet, so demand remains limited for now. -
Advertiser Confidence
Q: Any pushback on autonomous solutions?
A: Management mentioned that while clients scrutinize accuracy, early proof points—like initial savings of about 35% with earlier versions—build trust and prompt enthusiastic adoption. -
Competitive Differentiation
Q: Why choose Viant over competitors?
A: They stressed that clients favor Viant for its unique Household ID, midmarket focus, and cost efficiencies, which offer superior campaign performance compared to larger, fee-heavy competitors. -
CTV Pricing Dynamics
Q: Are CPMs under pressure on CTV?
A: The team observed that premium CTV CPMs remain consistent; any potential downward pressure in open exchanges does not significantly factor into their impressive 40%+ revenue growth in the channel. -
Cookie Transition Pipeline
Q: How is cookie deletion impacting customer pipeline?
A: Management highlighted a robust pipeline already oriented toward non-cookie solutions, even though less than 10% of media spend currently relies on cookies, with an expected gradual shift as cookie-based tracking declines. -
Political Advertising
Q: How significant is political advertising?
A: They indicated political ads currently represent a modest 2%-3% of spend, with minor fluctuations expected across cycles rather than significant growth. -
Data Clean Rooms
Q: What’s the impact of data clean room integration?
A: The integration with Google Cloud’s BigQuery enhances measurement capabilities, improving the efficiency of advertisers’ campaigns and incrementally boosting revenue contribution. -
Direct Access & Expense Outlook
Q: How are Direct Access ramp-up and expenses trending?
A: Management noted that over half of CTV spend now flows through Direct Access, which delivers lower CPMs and cost efficiencies, while operating expenses continue to grow modestly in the low teens percentage range.
Research analysts covering Viant Technology.