Criteo S.A.

Q3 2021 Earnings Conference Call

11/3/2021

spk_0: you need assistance please signal of of a conference muslims are preserve a star he followed by zero after the repaired remarks will be an opportunity to ask questions to ask a question please post are than one to withdraw your question please post star than two please note this event is being recorded our knowledge from the coffins over to a little saw senior vice president martin relations and capital markets please go ahead
spk_1: thanks for ago and good morning everyone walk come to create the quoted twenty twenty one earnings call we hope you're all doing well today johnny guess for my global a poison paris today are ceo meghan plotkin and see if oh sorry glickman to boston that chief product of the also npas would john eyes well fuck unit as usual you'll find our invested deck on a website now as well as a script and transcript to the goal before we get dotted a like to remind you that i remarked today will include forward looking statements which reflect critics judgment assumptions and analysis only as of today actual results may differ materially from current expectations based on a number of factors affecting cruz business we do not undertake any obligation to update any forward looking statements discuss today except as required by law for more information please refer to the risk factors disgusting our earnings release as well most recent form ten k and ten que found with yes will also did guess none got measures of a performance definitions and reconciliation the most directly comparable gap metrics are included in our earnings release published earlier today federally unless otherwise stated oh growth comparisons made during the school or against the same period in the prior year
spk_2: with that flaming know and it over to megan thanks said and the morning everyone to thank you for joining us today
spk_3: i'm particularly pleased to announce actually three results so close to my second anniversary atwood pretty i we delivered yet another strong quarter of double digit growth and hi profitability above the high end of our guidance the sustained momentum and our business and company transformation reflects our steady primer rs and delivery on the strategy that with laid out and on each of our strategic pillars
spk_4: we continue to develop our comments media platform and strengthen our first party data capabilities positioning us to drive sustainable growth and long ten how to value
spk_3: and i'll call today i'll discuss our comments media platform progress provide additional collar on our expected business resilience with regards to apple's app tracking transparency or eighty ti and talk about out he highlights in the third quarter as we continue to deliver against our key priorities zero will then cover our third quarter performance more detail and discuss our financial outlook
spk_2: let me start with an overview of mass media vision and progress
spk_3: as you know critique out focuses on comments media the future and digital advertising that leverages comments dates or and machine learning to target consumers threw out their shopping danny we differentiate ourselves by delivering the best performing comments audiences ads get able to the market is a meteor owners that we serve on the open internet
spk_4: i comments media platform up it offers a holistic sweden solutions and activate the world's largest set of comments data
spk_3: for first party based marketing and monetize a sim similar to the proven playbook exemplified by the walled gardens were able to identify reach and monetize highly relevant concealment to drive forty billion dollars of comments outcomes for out twenty two thousand marketers and number that continues to grow and thousands of meteor owners we have direct access to including product consideration and sales market is like new balance and macy's and rich ad revenue for meteor owners like yahoo japan or power for and retail medium
spk_4: driving the best comments audiences requires rare assets and capabilities and data media and ai it's a combination of a unique data meteor access i expertise and measurement capabilities that enables us to transform large crowds of generic consumers into highly rail
spk_5: and high performing comments audiences
spk_3: with a global consumer reach of six hundred and fifty million daily active users huge scale and promise day that with first party data from twenty two thousand customers and unique access to either nine hundred billion dollars of the comments so sales and differentiated retail meteor offering working with various top twenty five retailers in the us and in europe and fifteen years of expertise in comments focused i were already the and global powerhouse and i'm it's media with a strong says major advantage a total interested bull market is expected to reach a hundred billion dollars by twenty twenty four growing twenty two percent per annum compared to our serviceable market last year where laser focused on executing on this huge opportunity while continuing to gang share across all out this thing markets while our team has done great work already with still have a lot to do we continue to focus on growing on customer base broadening broadening our direct supply and third party media network and strengthening of this party dataset on i want to take a moment to provide additional paler i expected business resilience with regards to apple's eighty ti given the recent focus on it
spk_4: it's important to note that our business is much more orientated towards web based advertising that apps
spk_3: what we do target in abscesses a small part of our business as a result we believe when much more insulated from the overall impact of apple's eighty ti than a large madoff fist app players
spk_4: a retail media onside business does not rely on any third party identifier and is therefore not impacted by apple's eighty ti
spk_3: importantly as well our total exposure to apple uses in our marketing solutions business across both web and app is limited to less than ten percent of revenue x tech as of october twenty twenty one including about four percent on app as part of our commitment to transparency but our shareholders expected impact from a ti and iowa sustain changes is already reflected in the fifty five million dollar privacy and identity impact for twenty twenty one that we have previously communicated to the market and then terrible comment on shortly while apple's change changes make it harder for market is to gain access to the deck that enables tracking and effects meteor owners ability to better understand say the consumer this sense as an opportunity for us as we serve the market to offer alternatives we've been working on alternative solutions to i o s and crime for over two years and a confident in a position today
spk_2: with to say this another why we started out transformation jenny years again and believe we're ahead and the race to drive superior performance in environments deprived of third party identify as
spk_3: opponents media platform built on our first party media network allows us to collect alternative addressable identify as to build privacy by design audiences and dried comments outcomes on inventory consumed by apple users in addition with broad reach and six hundred and fifty million daily active users globally we engage consumers not just on their apple device that amount in the multiple environments in which they interact and the us alone allowed to single market and the biggest advertising mark in the world we reach over the fifty percent of the us population on par with facebook zap this means that we have plenty of opportunities to reach and engage consumers along as shopping journey
spk_6: shifting to our third quarter highlights
spk_3: we continue to devote deliver again step three strategic parties of growth execution and as party data fast growth we achieved double digit growth for the second consecutive consecutive quarter driving revenue x tech up fourteen percent a constant currency we delivered the highest growth and our new solutions and four quarters and plus sixty six to sense and with pleased that our new solutions never present twenty eight percent about title business up three points compared to queue to this fast growth than a solution is accelerating our revenue diversification a key pillar of that transformation
spk_7: second execution
spk_3: at team continues to execute steadily with grits focusing conviction across our entire solutions portfolio for marketers a meteor honors as that's it every quarter we committed to maintaining a high say do ratio and everything that we do marketing solutions perform strongly largely driven by solid growth with retail strategic customers like macy's and brom been pre
spk_4: we also experience strengthen our poll clients spend and a solid retargeting business retargeting remain healthy growing one percent despite the expected impact from identity restrictions
spk_2: excluding incremental identity headwinds retargeting actually grew ten percent
spk_3: with a marketing solutions growth in our new solutions accelerated the sixty eight percent up the sixteen points since key to would grow in contribution from agency partners audience says targeting is a growing area of focus for us and steady momentum with both our retailer and brand customers and the agency's they partnered with growth and our audience first targeting solutions accelerated eighteen points compared to cute to to close to fifty percent as market is increasingly spend across the entire marketing funnel with us
spk_4: only channel app that helps market as optimize their marketing investments across online and offline
spk_3: now represents twenty percent him and new solutions business within our marketing solutions portfolio growing about one hundred and forty percent we see increased traction with customers willing to target consumers everywhere and build the online and offline worlds as he comments remain strong and economies increasingly reopen
spk_4: lastly when launching very exciting tests about new shop a bowl video ads offering that todd mentioned about this today this opportunity is very compelling for our marketing clients and for us and were encouraged by the early results
spk_3: and retail media we see accelerating momentum as well
spk_4: we delivered sixty five percent growth and revenue x tech accelerating by sixteen points this is q two year to date retail media has grown and impressive seventy percent accelerate both on a one year and two year basis we see continued momentum and now on side business lot sleep driven by the growing network effects of every time media platform which provides a unified retail meteor offerings from brands and retailers on a single platform
spk_3: close to eighty percent of our retail media business in the us forty goes through our pay we had stronger growth without taught us retailers customers adding tenure retailers globally and launched ten retailers on the digital media platform including moment canada
spk_4: best buy and douglas
spk_3: girls are thrilled to have our retail media platform power the recently amounts retail media programs of loves us players including outer beauty and lows and addition our marketplace business delivered solid performance during the quarter accelerated by a successful acquisition of mumbai yeah
spk_4: performing and line with expectations
spk_3: and we continue to make good progress of side business which allows brands to extend their comments audiences beyond retailer properties to the open internet with a strong retailer pipelines expected to drive accelerates a acceleration and key for
spk_4: how third strategic party is first party data and with said before connecting first party supply will become the only way for both market as a meteor owners to effectively advertise and monetize promise audiences on the open internet once the industry finally modes the on
spk_8: third party cookies
spk_3: we continue to make progress in securing third party data via retail media our comments media platform strategy is and kids and our retail meteor onsite business which is entirely built on first party data and as not rely on any type of the party identifies with the cookies or idea size though
spk_4: strengthening our months and i'll lead around says partied bitter
spk_3: we also continue to make progress in securing third party data by ralph this party media network working directly with meteor i know like a b c and the l a times to power first party data media by buying on the open internet today approximately sixty percent of our daily active users on the web or addressable through meteor owners we have direct access to building upon our legacy direct better products were actively increasing our direct integrations with publishes including as part about evolution to a full supply side platform our key focus remains the quality of our direct integrations with a meteor owner's insurance he deep relationships with the most strategic players that's why in every market we typically ensure a direct past the top one hundred publishes getting marketers advantage just ah and transparent buying on the properties that matter most to the business success and without comments media platform we also deepen our relationships with a direct publishes by expanding their inventory reached to key consumers through new sources of marketed man's and great a publisher monetization and address ability last quarter we discussed the initiatives to bring third party demand for the critique of as his p and broaden our buying scale with a direct media partners with over five hundred and fifty global publishes already signed up our it's it's t allows us to leverage i promise data on a larger scale bring out direct publishes large advise of supply executed three pretty open to other third party dst and secure long term direct access to policy media in short with retail media's unique first party date or assets and a large media purchasing scale including three more direct meteor integrations were uniquely positioned alongside the walled gardens to drive the best comments audiences to the open internet based on that says party data and closing with very pleased with the sustained momentum and our business and company transformation when making steady progress in delivering with focus on each of our key priorities of growth execution and says party data
spk_4: we continue to expand our promise media platform to drive the best comments audiences on the open internet
spk_9: further positioning us for sustainable growth and long term shareholder value with that alternative the sarah to discuss our financial performance and guidance sarah
spk_10: thank you make and and good morning everyone i'm delighted to be presenting such a strong coffee performance today
spk_11: i will walk you through our financial highlights the to play as well as up guidance for the rest of twenty twenty one starting with a financial highlights revenue with five hundred and nine million dollars going eight percent with seventy two percent of year over year growth by existing customers and twenty eight the said driven by new clients of revenue growth is primarily driven by favorable pricing
spk_10: a total media spend activated by a coma media platform was a the two and a half billion dollars over the last twelve months and close to six hundred and fifty million dollar and she three growing twenty three percent that constant currency
spk_12: revenue at tech group fourteen percent to two hundred and eleven million dollars
spk_11: as expected and previously communicated enough guidance this included seventeen million dollars of incremental identity and privacy impact compared to last year on a two year basis revenue at tech guru an estimated nine percent excluding incremental privacy impact sewing saw this momentum of revenue at tech margin represented forty one and a half percent of revenue up two hundred basis points year over year largely driven by retail media
spk_12: and the acceleration of our client transition to the retail media platform
spk_11: not simple as we grew our customer base to close to twenty two thousand marketed them brands adding twelve hundred net new clients year over year including more than four hundred clients and que three
spk_10: lots customer when thinks it's landmark names such as lies waste their a new balance we grew up same client revenue x tech nine percent demonstrating that depth and breadth of our platform as forty percent of life customers now youth on your solutions
spk_11: client retention remained close to ninety percent
spk_13: looking at thirty cause of retail business up sixteen percent on a two year basis at constant currency across solutions reflects sustained stone demand at consumers continue to shop online one enjoy and heading back to physical stores
spk_10: retailers lot of small adopts more about performance focus products and a driving a solid momentum in our business
spk_11: a putrid spend with travel client just slightly increased thing and we're finding new business particularly in the us our performance for my son solid and balanced across all regions we continue to see momentum in the americas with revenue x tech up eighteen percent that constant currency driven by acceleration of our retail media is that both large brands and top us retailers strong performance the strategic and call retail customers and new business and travel we are proud to serve as roster top three tell him a comet customers i continue to strengthen our leading position in the fast growing retail media market in the us
spk_10: asia pack also experience those moments and growing revenue xx fifteen percent that come from currency driven by higher class besides the strong recovery of our retail business in japan and sustained performance with enterprise clients in southeast asia and korea
spk_14: yeah me a performance with revenue x pet growing eight the senate constant currency reflect mix performance by country and verticals we continue to see strong traction from retail customers notably in germany and a retail media especially in france partially offset by low was banned from one large
spk_11: europe wide traveled customer nab a quick note on retail media revenue dynamics as be progressively transition all our retail media clients to our retail media platform and increasing share of a retail media revenue or about sixty two percent and keep three is now accounted for on the net basis compared to less than five percent in two three twenty twenty as a result of this transition retail read retail media revenue is lower in que three twenty twenty one compared to the figure this is a transition real impact linked to our ongoing climb migration to the platform
spk_15: year over year the media spend activated include three by retail media greece seventy four percent from ninety million dollars to close to a hundred and sixty million dollars accelerating from que to a retail media's underlying performance reflected by revenue x tech remains extremely strong growth
spk_9: sixty five percent
spk_11: once this transition is complete which weeks that expect by the second part of twenty twenty two revenue and revenue x tag for a retail media on slight business would be recognized on a consistent basis as a result this would drive a high of revenue x tech margin for retail media compared supply periods moving down a piano we continue to deliver strong profitability one investing in growth or adjusted ebitda of sixty eight and billion dollars with up thirty seven percent constant currency resulted in resulting in an adjusted ebitda margin of thirty two percent of six point
spk_10: year over year and over three points on a two year basis
spk_13: we closed the quarter with a global headcount of two thousand six hundred and sixty critique is the highest level since two to twenty twenty reflecting off strong employer value proposition in a tight talent market of growth investments are largely funded reproach productivity enabling top my leverage
spk_10: as we ramp up commercialization of new solutions
spk_11: he investment areas remain new highs and solution selling go to market are anti and product in particular for retail media commerce insights and contextual advertising as well as upgraded tools and processes to support on new solutions growth
spk_10: nunca expenses for a hundred and forty three million dollars think she three of five percent constant currency and know gap a tax increase seven million dollars or percent including thirteen percent for our and day and group five percent before the impact of our highest stock price on social charges on that same basis we increased employee close by three million dollars or three percent a constant currency we encourage the two million dollar game of pretax restructuring and transformation coast and que three almost entirely related to leave the camp to leave the counting impact from leave exits and amendments executed as part of our global of it right sizing as a result we now anticipate preta
spk_13: six restructuring and transformation expenses of about twenty when one million dollars and twenty twenty one
spk_10: depreciation and amortization increased three percent and the appreciation the last stock price year on year drugs share based compensation expense of ninety five percent are solid business performance and disciplined clock management private puts rippling of our income from operations with close to three three hundred and sixty percent growth in their income acute three effective tax rate was twenty four percent a weighted average diluted share count group five percent to above sixty four million as a result of are growing stock price by lose the dps was thirty seven per cent up three hundred and ten and percent and adjusted diluted dps was sixty four percent up sixty percent
spk_12: we cancel just short of nine hundred thousand shares in que three and plans to cancel over six hundred and thirty thousand additional said before the end of twenty twenty one printing all total share account at about sixty five point seven million dollars by him twice fifty five point seven million by year end including five point o two million treasury show
spk_10: as
spk_12: of strong cash generation a cash business should continue to provide ample financial flexibility to execute on of commerce media fat joe boom and comments media strategy
spk_16: free cash flow with thirty four million dollars and que three or fifty one percent of adjusted ebitda reaching a hundred and twelve million dollars for the first nine months
spk_17: we closed the quarter with a strong balance sheet and five hundred and fifty four million dollars in cash and marketable securities with financial liquidity in excess of a billion dollars we maintain a robust capital allocation process with a primary goal of investing in continued can organic growth and leveraging mm a to act
spk_9: salary of media platform
spk_10: we we purchased a million shares and que three at an average cost of thirty eight point six dollars fisher since starting our hundred million share buyback program in march we have we purchase seventy three million dollars worth of credo shares at the end of september including thirty eight million dollars and key three in october we extended our current share buyback program from a hundred million dollars to a hundred and seventy five million dollars all now provide off guidance and business outlook for the remainder of twenty twenty one which way from reflect always expectations as of today november third
spk_11: as we head into cute for we continue to see strong a bit of momentum as evidenced by a revenue x tech growing over fifteen percent in october
spk_12: while shots we ecommerce remain strong trending significantly above pre tobin levels of consumers increasingly bad you online shopping convenience and a coma continues to benefit from some store closures and itself continue to reopen retain his accelerate their investments in multi channel fulfillment capabilities making only channel increasingly prevalent in them off to mix liberal we continue to be well positioned to capitalize on the long lasting positive trend we're experiencing an early start to the holiday season this year caring and momentum into a fourth quarter to date
spk_11: parallel current inflationary pressures of amplified many market need to advertise the more expensive products
spk_10: we anticipate the holiday season to span over an extended cyber thirty cause similar to last year
spk_11: for us and european e commerce customers and we expect the tail off in december to be earlier this year
spk_10: while global supply chain challenges have had pockets of impact in parts of the consumer electronic vertical an auto which represents the parts of our business we have not seen any material impact on our business to date
spk_12: i'll robust growth is supported by our diversified customer base of twenty two thousand boxes through in the current environment remain focused on reaching the right audience at the right time our guidance therefore anticipates a strong holiday season and continued strength in retail with growth in travel and consumer electronics
spk_17: as you know we also have tough comes from last year and queue for
spk_12: lastly of fifty five million dollar assumption for incremental identity and privacy impacts and twenty twenty one including eighty ti in iowa fifteen remain unchanged and included twenty five million dollar impact and queue for specifically including approximately fifteen million dollars for a t t and about five minutes dollars for the new iowa fifteen changes we will not be providing for more twenty twenty two guidance on the school that being said look human head we optimistic about our growth trajectory and we're confident that the robust growth that we expect to new of station and retargeting and twenty twenty two will continue to more than offset the incremental identity and privacy impacts that we anticipate for next year
spk_11: as of today we assume that these identity and pricey impacts incremental to twenty twenty one will amounts and less than sixty million dollars and twenty twenty two taking all of these factors into consideration we are basing of four year twenty twenty one revenue x type growth guidance to approximately ten percent a come from currency
spk_9: we expect a fast growing new solutions to go above fifty percent and twenty twenty one including sixty percent for retail media as we continue to strengthen our commerce media platform
spk_11: we are also increasing are adjusted ebitda margin gun and to about thirty five percent of revenue x tech demonstrating top of strength and operating leverage and twenty twenty one we expect our just city bizarre conversion to free cash flow to be about forty five percent do to strong to revenue performance of regional makes a projected tax rate is expected to be twenty six percent for twenty twenty one for to four weeks by revenue x tucked between two hundred and seventy one and million and two hundred and seventy four million dollars driving
spk_12: constant currency growth of eight to nine percent we expect our new solutions to grow about forty five percent into for as we left strong growth and tougher comes from last year and we expect you for adjusted a bit between one hundred and seven million dollars and hundred and ten million dollars or a margin of thirty nine percent to forty percent as
spk_0: we continue to invest in our growth areas and plan for a high a bonus pay out and cells conditions for the year in closing we are excited about the men men some in our transformation can critique continued to be uniquely positioned to win income as media and with that are now open up floats your questions please do you know begin the was in this recession to ask questions please those stores and one
spk_18: the users peter bones rub your handset before personally choose to join your question who's for starve them to
spk_19: transfers was doomed from some dog a move woods a few more him lose your ahead great answering questions the first just on a new solutions you highly the acceleration partly driven by agency partners so we just talk more about your efforts there are you bought the company closer to agencies over the last two years of perhaps would work remains to do there and then secondly just to go back to
spk_3: supply chain i'd i knew that you mentioned consumer electronics and and also auto and a nazi much impact as far yes gestures and what gives you the the confidence of federal state kind of stable and that things you know i don't eventually get any worse as you go through the courses for you thanks and i'm like i like the to hear from you are me sick things up here with agencies and and else beloved says supply chain and ah and if some i don't cover all which i'm sure hope point out of right across the sarah to help out i'm on the agency front we can a lot of traction like the last couple of years about said about business runs through agencies today
spk_4: it's been a it's been in an effort which doesn't stop insect with got a lot more work to do
spk_20: ah that's or it's showing promise officially the performance agencies that we the woods are really great partners of us when it comes to marketing solutions
spk_5: and as a said a couple years ago we wouldn't have acknowledged that today we do and we were todd said to to get him of that their now important clients to us and the us as important partners for them to service on both fair market a clients and help them get access to to media that they might not be averted
spk_4: get access to
spk_3: without a partner like house that has directs and access them out to to media properties
spk_5: on the agency hold conference
spk_4: this is really the domain of retail media retail media's had a really strong push
spk_3: in through agency whole code to get to some of the biggest mindset that we enjoy that the company with ah enjoy having as our partners and clients on what on mostly excited about as that's just the beginning so i think if you start us off from not scratch two years ago that maybe you know it up twenty percent two years ago and we've pushed our way through
spk_4: the to be trusted partner to may be a sixty percent to in a lot of wiggle room there for us a deal with agencies arm and that comes through get over time showing them that we can help them get performance and i continue to attract and retain plans but also that some
spk_21: we have internal a the ability to bring our commercial teams closer and closer together and be able to tell molehill it's the story of the comments media platform and how that can be of of benefit to agencies to so long and should have it is there's a lot of wiggle room for the air arm but we're pretty happy with attraction that with made to date
spk_3: on the young supply chain topics i think it's important to always know that we're in the advertising business and ah and therefore it's really about whether of the question is whether or not the supply time dries up advertising and we've not seen anything like that in fact to the contrary if you look at and spend across the globe for twenty twenty
spk_4: one is predicted to grow by about fourteen percent ah and so that's far from i'm with that title and he just look at digital and spread it it looks like it'll grow by twenty percent so and the clients it i've spoken to around the wreck the around the subject of their supply chain couple of thing for no one is
spk_5: that they have seen this coming and have beefed up stuck with i can get stuck and had promoted goods that the have on the shelf or have access to or had access to deliver they still have to advertise his still need to make money they still need to shift product and so on so with ah you know what what was done and we've just seen them change
spk_12: what they advertise they haven't backed away from advertising because of the supply chain chain problem that's what we've seen arm and then the other thing to notice it our businesses both goods and services and so we you know we see we see both of them trucking along extremely strong link and services
spk_22: and i clearly list and not affected by any kind of supply tennis shoes anything to add are coming out thing the anything to add as we have twenty two thousand customers say that the verses by the helps us here and then just when we looked at the
spk_23: i guess the businesses are more impact by supply chain yes in auto may be slightly smaller than it was a quarter ago but it's we've of more than offset that with both elsewhere so that leads client is different but we see growth in in one client offsetting i guess less growth and another and that's been our business model and helps us true
spk_0: kind of all trends and we don't see any significant impact of supply chain fatty for him
spk_24: thank you may sir analysts for some footage on some sir simon and burst please go
spk_25: i'm kind of got a few questions first one is to sarah are you obsessed refer to a higher plane as provisions given how strong the number the speed as we kind of headed to twenty twenty two do you think relative to what you achieve this year
spk_24: your kind of fully paid up or is there gonna be a catch up in terms of bonuses
spk_26: ah next year
spk_24: i'm second one for meghan just on agency relationships and so on obviously have we seen purposes by citrus at has that resulted in you know a whole codes coming to you as opposed to maybe get such a sad because they've lost their independence a be interested in and thing you can
spk_17: sale matt and then just another one on travel of you've talked about it with covering up is it doing better than where you thought it was gonna be at this point if you compare that to say what you said was due to thanks hi sarah great great to hear from you i'll cover the bonus and travel alone violence that we a me with to really we pay for performance and we have a very structured bonus program that really does drive from from
spk_27: for the most of the population of the wrecks t and then for kind of executives is rex t and a bit dull and to and own self commission obviously that seen them straight from hell what the hell's processes and how how from a new cells perspective as well as new solutions will see any true up for twenty twenty two
spk_28: oh we do see that we want to pay for the performance that with delivering this year and everyone's work in incredibly hard and delayed that's that's what we're paying for the nature out for twenty two but we start with i guess an even playing field and on obviously we hope to be in have any numbers that we are planned for next year so are we want to incentivize that for that
spk_17: in terms of travel
spk_12: go the as you're the one i know he referred to this is the sleeping dragon which we kind of love that turn on it's it's it's waiting out it's waking up slowly out or growth is double what it was a year ago
spk_4: but that still probably about half of what it was in two thousand and nineteen
spk_3: we will in key for we have seen some new book bookings so we have seen some new ios coming in and we've seen not yet we see traction or but we expect it to be quarter after quarter as we continue to kind of move for today's the really the the key take the ways that that we have were planning for right now
spk_4: and we jumped and on the on the policies source citrus comments sarah and and and good to hear you ah we predicted at last quarter i think i'm you we are asked the question about what we thought of that acquisition and with sexy see it as an opportunity given them
spk_5: paul kaiser and great thomas inclined to out for each how media outlets like likely than to go to
spk_29: the likes of a suggests or one or a or a capability that's owned by another how crime so what we have seen as exactly that play out so out thanks to the question they they are and what we do fine answer that we have a stronger connection to the other hold coast and i'm looking into a partner for this kind of capability and die
spk_0: have some have counted as a provider in the market who is a quieter lanes very heavily on with a competitive and exactly as be predicted
spk_19: great thanks the that was was put on some then someone with the remote hobo marshals please go ahead
spk_30: i can worry everyone i have two questions first for sarah or megan or maybe a combination of both are sort of follow up on the comments at the expectation for less than sixty million of privacy impact for twenty twenty two i just to make sure i understand what's built in an era
spk_22: sounds like http and i was his team make up the majority of that still as it doesn't the fourth quarter but can you remind us what else is baked into that figure for next year and how timing of that impact may and or flow i and then second for todd helped ah john i'm i would love here's a take a about the continued drumbeat that we're hearing around clean rooms as the next technology next generation of technology rather that marketers are using the levers of first party data have that trend relevant to pretty oh and i'd do you see it as a risk or an opportunity or of this mix of both for the
spk_11: organization thanks
spk_31: that so i to stop privacy and as he know we haven't given any guidance out for twenty twenty taste but given it is such a hot topic we wanted to or at least the not leave you with a cliff hanger and not we answered the pay is that i o s and kind of fifteen plus
spk_22: well that's already starting early november and said there will be an impact that next year so i would assume about half the impact relates to the iss can kind of hide my ip tied features
spk_16: i'm thirty this year in i just given that it's just began so it got three quarters and and a half if you are left of that and then for a t t the vote out there and key to twenty twenty one so i ranted the pacing probably around another half of that of that sixty million or relating to the
spk_22: eighty ti
spk_32: there's a small amount were expecting for explicit consent that as me as know that kind of already and hit us for the much power and the know our customers continue to focus on strategies to ensure that are they continued to protect consumers as well so for the most part that i wes
spk_33: in a https i was fifteen and that's our expectations and that relates primarily to the retargeting business
spk_34: the and course retail media has no their party identifies vessel first party to that's the way with thinking about it as of now again this is todd nice to nice nice join the call in to hear from you on that cleaner and point to just kind of going back to what we signaled on our investor day i think an earlier question you may have asked and we continued to lean forward in this space with all the major players that are that are promoting clean room offerings and their couple of newer ones and the add that that are out there that you know and then yeah obviously live ramp has had it's safe haven product which is your nose somewhat being extended by data for leaves and so forth that we're talking snowflake info
spk_35: some live around plan and an act of others and that we're definitely looking at his integration opportunities these tend to be customer driven integration opportunities em were there to use cases yeah one is in a safely mix
spk_19: seen first party data am of the market or gonna with you know our publisher's or our data collective in a way that that makes for a better commerce media audience to be targeted and then the second use case with which is something where we really add value to clean rooms it
spk_36: his activating those audiences across our first party media network so we we look at the emergence of clean rooms as being very important to us am in own in a fairly neutral sense am and as i mentioned you know we've made a lot of progress partnering with all the major players
spk_22: since we last talked
spk_37: great thank you and serotonergic clarify that city lily and impact for next year is an absolute amount correct not incremental to this year
spk_0: no that would be incremental
spk_38: and it's really more kind of second half that his first how they share and in addition we have get more up with other when explicit consent as the folly fossils and thatcher the beginning of the air so it's kind of more a on you and packed disputed that the time and did okay thank you very much better bishop him up that murmurs was into a on some to and was horny please go ahead ah great thanks for taking the question
spk_3: follow on to the last on the the impacts on next year the sixty million i'm guessing i mean you didn't call anything to do with google cookie elimination item that not big yet i know that kind of pushed out to like twenty three issue i guessed it it's something yet to worry about than the following year or are you getting to a point where you got so much for party data driving a be he can do that that really doesn't affect you as much by the time it finally comes about and then i guess for lately you retargeting number was positive for the second quarter in a row i think it was one percent constant currency or even ten percent if you exclude some of those privacy effects any color you could give us on what that looks like in a queue for and beyond it is actually a you know a a sustainably growing business the can already thanks
spk_4: i'll let me take their first part of the crime question sir google has push that saw the impact down the roads are and what that means to us is it just gives us more times ah to read the market it more to add he gets has more time
spk_3: to develop the products are and create more and more amorphous party data set a feather it goes down the road and it's though under the love no longer we have absorb any kind of impact their to date we've been leaning and to the test that am had the test said that google have done across there are alternatives by flock and fledge they blame him very very quick play and they're so far away from actually being ready for market adoption
spk_39: that's our it's list and it's list the marketplace or the big question mark rounds
spk_22: when and even if ag google go ahead with
spk_17: the turning off the ability to use that party cookies so we we don't see any that sydney them that he's gone off any kind of impact from i'm from crime and what will do as will just continue to do what we would doing continue to build the moat continue to bring in the first party data to make us more and more resilient by the day
spk_32: adds anything that happens across the chrome browser to eliminate ability in ability to use in the identifies
spk_40: i can
spk_34: attacking quickly common on with getting and on cue for so we are entrusted with yet yes we targeting is doing well and we do say that we have a robust of this is they're very resilient as we're expected to and most of the to the twenty twenty one privacy impact about twenty four million dollars is in queue for to that will be see pretty much offsets added pretty phenomenal growth that with already seeing and in retail me expect to continue and to key for and in twenty to twenty two and again i don't wanna i'm not giving guy
spk_5: didn't for twenty twenty two but we do anticipate that we will continue to say resiliency in alvi targeting space and we are looking to offset the the incremental impacts same privacy so it's a great business our when it on it pays it plays only thing that of customer
spk_34: as any really like to do we targeting tyler op ed
spk_0: excellent thanks i wanted to add led him to add one thing to it and but that we didn't talk about obviously spot on on on now on chrome going back to chrome and but we didn't mention that yeah we're actively helping you know our marketers find
spk_19: and and an advertiser engage audiences high value audiences that are now available at lower cpm in
spk_41: in iowa us so did the impacts that we've talked about are obviously related to mostly to for chrome web to app retargeting
spk_19: in a little bit of app to opry targeting but what we didn't talk about is that you know our product efforts remain full steam ahead on helping target into those environments without it being a retargeting a fact
spk_42: and thought
spk_3: you that have emerged or less was into a as in thornton with service and journeys please go ahead eg why everybody ah congrats on the results maybe was quick housekeeping question for for sarah not gonna follow up for either at meghan a the and or taught art sarah on travel for the back happier than previously thought about down seventy percent versus two thousand and nineteen i think url you might imagine something closer to maybe down fifty percent i couldn't be sure if i heard that corrected that's how we should be thinking about travel ah in in in the back half of year and then for for mega retired army when we think about contextual retire ya busy retargeting pretty oh as as a dominant player and the market leader
spk_4: from where we stand now how do you think about your and capabilities in contextual and your ability to to be best in class and a market leader in in contextual were pravda rory some feel a thing incumbent players and other competitors county at market any update their would he would be helpful thanks everyone
spk_3: but let's start with your second question first ah so just before i handed across to mr contextual here and past
spk_43: i i said in one of the remind you of that the things that go into the mixer us
spk_5: ah you know as as i said before we have six hundred and fifty million daily active that's a lot of consumers it's a lot of people
spk_34: that we say we have our twenty two thousand comments clients ah so that's a lot of market is with a lot of marketing data that we can get our hands on in terms of their the shopping behavior that economists data we see i the nine hundred billion dollars and ecommerce sales we see it so we know what people have
spk_5: buying
spk_34: the and we also am from our backgrounds heads
spk_22: have a good reputation and are creating our outcomes so we'd say we were responsible for about forty billion dollars with of palmer's outcomes from the client base that we have today so if you take that capability that data from layer on our ai capability on top of that and then you have this
spk_11: it's melting pot that you like of stuff
spk_19: that is being pulled them saying i'm a contextual product offering some awful as then he jumped on know that's great
spk_41: meghan appreciate that and just to add a little bit to it you know everything that makes us different from a contextual stamp on of course we do in all the regular you know content immediate extraction that that others do some natural language processing that that would not be enough
spk_34: look what does make as different as that there will always be a certain amount of first party users recognize across both the app and web that have buying behaviors that are uniquely seen by credito so in order to match those and then to take that match into the contextual
spk_5: meaning that i described before is what makes us different and will always make is different
spk_34: and i'll just that quickly tight to travel question say going into if i can look at a quarter on quarter thirty two thousand and nineteen came when we were down about eighty percent of and odyssey when we plan to expect to be slightly better than that qt we act is about seventy percent sign as q three and were anticipating key for we hope to exit ramp fifty percent so we are seeing some you want is kind of coming in and queue for so that's the way that were thinking about it
spk_5: but that that's very helpful neither could slip one of a quick one in our oil because you guys talk with about your shop ago video ad knox more more about performance marketing try to find it's way into into ctv it's like my questionnaires i guess is is a chance we could see some whether it's ctv black or more ctv publisher any type of your partnerships that
spk_44: dob that could could come our way and in the coming months and course
spk_0: they were really focused and first well we're really excited about about shop a ball mainly be because yeah we've the have always brokered on the promise of bringing commerce to where consumers are most i'm looking to discover a brand or to engage a brand
spk_41: for us to eat you know that the first and most be a meaningful scale opportunity is an online video
spk_30: the and the testing that we're doing now not surprisingly leans into online video doesn't mean that we won't be talking about ctv do you know it's well for your any hear a lot of noise from us to on online video because there's so much untapped opportunity for shop a ball or ross the open internet right now
spk_34: and it really signals quite an evolution for us beyond what what has already been effective in display so we're laser focused on that that we're certainly not close to any of those other opportunities
spk_5: great thanks about
spk_34: elements was simply on some words words words words words securities please go ahead they watch much just a quick one on a new id to a thought it was he could comment on
spk_3: and so that's progressing and your participation there and inserted the contribution you're anticipating
spk_45: from your participation thanks
spk_19: yeah we're still moving along and obviously that is a very ambitious initiatives that you know is there to benefit the entire ecosystem we're still very supportive of it
spk_46: and of course we have work in parallel with pre bed single sign on
spk_41: that is advancing these are big big initiatives i think we signaled you know and earlier calls that we expect it would take the better part of the year to get to any scale and but we do see progression and we're happy with it it could always go faster but do bear in mind these are for the holy ghost
spk_11: system
spk_47: not just for earth the trade does scoreboard radio
spk_48: yeah how else else it has focused on this has been one of interoperability and the ability for all of these things to work together and to twenty points and hugely ambitious towns but one that where ah where where laser focused on and were behind ah
spk_49: not behind times where are up with pushing up on we pushed you miss as fast as we possibly can because we need to make sure that that entire market is ready to go and at a time and a crime decides to enact act that party cookies
spk_50: okay great thanks and just a quick like an alloy and
spk_51: and might have missed this
spk_1: but i can just quantify with the travel contribution was you revenues into those nineteen and i think that of yeah it was around about hundred men and if i were at home
spk_2: the total are getting back after was hundred mil outside travel for other than toppings have a lot of and baghlan as a segment
spk_0: the that it was about seventy million twenty nineteen
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