Viant Technology Inc.

Good afternoon, everyone. My name is Chris Vanderhoek, co-founder and chief operating officer at Viant. Prior to starting our third quarter 2021 earnings call, we would like to open with a video about our WWC software release that was taped at a recent event we hosted with Advertising Week in New York.

The third-party tracking cookie was never ideal. At its best, it was still transient, intrusive, and opaque. And no surprise, it spawned a consumer privacy backlash.

The entire digital advertising ecosystem for years has been built on a cookie.

Well, in the new OPEB, the cookie is going away. Actually, it's pretty much gone already.

What we see today is the cookie is not available 65% of the time in the bids trend. The only place we see the cookie available today is in one area of the programmatic ecosystem.

Adelphic.com. In our recently launched software update, World Without Cookies, we're making it easier than ever for marketers to reach real consumers, not proxies. World Without Cookies lets marketers manage reach and frequency at the household level and more accurately measure return on ad spend in the process. You can even attribute online and offline sales to media exposure.

Now that cookies are going away, marketers have no ability to serve addressable or targeted advertising, and they have no ability to track whether or not that advertising performed. Enter our WWC software release. We're giving out our household ID inside of our software so that they can replace the cookie. Other companies take a different approach, but where I think that this really shakes out for marketers, this is a huge upgrade. We center all customer information around the household address. So whether it's your name, your address, your phone number, your email, that all sits at the household address. From there, anytime we're delivering advertising to that household, marketers are then able to make their advertising relevant to that household and also see whether or not that household purchased. The buying household ID enables marketers to do so much more than they could before. For instance, in connected television, it's a cookie-less environment. There is no ID available. We all see the same ad over and over and over when we're streaming. That's a frustrating user experience for consumers and for the marketer as well. Our household ID enables marketers to control reach and frequency across publishers in the connected TV environment. This is a huge advantage. It reduces waste, improves their reach, and overall drives increased results. But it's also an upgrade because not only does it track for e-commerce sales, You can also tell if somebody saw an ad, walked into a store, and purchased from a store as well. So WWC brings together all of that household logic end-to-end throughout the software, starting with planning, forecasting, buying, all the way down to the reporting you're looking at. All that decisioning is using that people-based household ID.

We want to drive more transparency around the programmatic bid stream. That's why we launched a dashboard available on our public website, buyintinc.com. This dashboard shows how often different identifiers occur in the bid stream, and it's updated daily to catch the latest trends. Already, the cookie appears in less than 40% of the bid stream. It's really just the Google Chrome browser on non-Apple devices. Adelphic, Viant's GSP, sees nearly 150 billion ad requests every single day. That gives us an excellent view into the programmatic ecosystem across digital advertising channels. Viant's household ID, based on our patented processes and technology, is available only through our Adelphic software. It translates over 1.5 billion IPs and other programmatic and integrated partner identifiers into 115 million meaningful U.S. consumer households. Every household is anchored by a physical address, and we tie all other digital identifiers back to the household.

Buy It's Household ID is available in nearly 80% of what we call the bid stream. So it offers incredible benefits and it's highly scalable.

Marketers that stick to a declining status quo or tie their future to some unproven ID will be missing out on the majority of the bid stream. Those that aren't thinking about the cookie-less present are blind to the fast-growing, powerful medium, Kinect EV.

Marketers typically want to show you maybe one ad a day or maybe three ads in a week and then stop. We call that frequency capping. Our competitors rely on a cookie to be able to do basic things like show three ads and stop. When our household idea is available 80% of the time, we control the frequency with consumers, which gives them a better user experience and ultimately lets marketers not waste money.

With our software update, marketers can now plan, forecast, and activate at the household level, deploy cross-frequency capping, and ensure the best consumer experience. This gives customers access to cookie-less environments such as CTV and more.

We just concluded a open beta for marketers to be able to test the buy-in household ID inside of the software, and the results were incredible. A 200% increase in conversions from marketers leveraging the household ID across all of these channels. Brand marketers achieved 40% more reach for the same amount of media investment.

With 28% less ad repetition, which, as you might imagine, made them pretty happy.

It's a great thing that you guys are doing household ID. When you think about CTV and certain other digital activity, a lot of that is done at a household level. When advertisers think about first party identity graph, households should be an instrumental part.

So the future of programmatic is going to be very, very interesting. Your creative is going to start to play a much more critical role. You cannot think as an isolation of ads. You need to think as a full ecosystem of consumer ID, how the household ID is, how the people-based marketing is happening, what is the first-party data that you're able to deliver, what is the messaging that you're able to unlock to deliver a full user experience.

it's actually awesome it was something that you know they had shared with us we saw in a presentation and then we didn't realize the impact until we actually executed it so by clicking that simple household button we are now able to see conversions not only at a campaign level but conversions at an order level at a line level even at a creative level so being able to see that that full picture at a household id When you actually see tangible results was really impressive for us. And the reporting has been second to none. We now can see immediate results from the big screen, which translated to the small screen. That increased our conversion rates. It lowered our cost per leads for our clients. And overall, the campaign became more robust. And with conversion lift and all the response that we got from it was about 140% lift from the moment that we turned it on. It's been really successful, and our clients just want more of it.

It's a shining moment where the world is going cookie-less, and marketers and consumers are going to like what's on the other side of that shift. We've been there. We've made that shift. And I think marketers are going to be excited about what the future of digital advertising is bringing them, which is better measurement, better targeting, better ability to understand what am I getting for my money.

Hello, everyone, and welcome to Viant's third quarter 2021 earnings call. My name is Matthew, and I will be your Zoom operator today. Before I hand the call over to the Viant team, I'd like to go over just a few housekeeping notes for the program. As a reminder, this webinar is being recorded. After the speaker's remarks, there will be a Q&A session, and if you'd like to ask a question during this time, please use the raised hand function located at the bottom of your screen. If you plan to ask a question, please ensure you've set your Zoom name to display your full name and firm. Thank you for your attendance today, and I will now turn the call over to Nicole Borsha.

Thank you very much. Good afternoon and welcome to the Viant Technologies third quarter 2021 financial results conference call. On the call today are Tim Vanderhoek, co-founder and chief executive officer, Chris Vanderhoek, co-founder and chief operating officer, and Larry Mannan, the company's chief financial officer. I'd like to remind you that we will make forward-looking statement on our call today that are based on assumptions and subject to future events, risks, and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, In our entire Safe Harbor Statement, please refer to the news release issued today, as well as the risks and uncertainties described in our registration statement on Form S-1 related to our initial public offering and other filings with the SEC. During today's call, we will also present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the news release we issued today and our filings with the SEC. I would now like to turn the call over to Tim Vanderhoek, Chief Executive Officer of Viant. Tim?

Thank you, Nicole, and thank you, everyone, for joining Viant's third quarter 2021 earnings conference call. I'm pleased to share that we have delivered another strong quarter of operating results across a number of important areas in our business. We continue to expand our customer base by adding 17 customers in the quarter, bringing our total active customer count to 305 at the end of the third quarter. Second, we've exceeded our previously issued guidance across all financial metrics. Revenue in the third quarter totaled $50.9 million, an increase of 26% year over year. Our revenue performance reflects the broad-based strength of Vient's omni-channel advertiser experience. We had solid performance in CTV, but we're now seeing several interesting shifts in customer adoption with other ID-less channels beyond connected TV. For example, we saw that mobile spending was up 40% in the third quarter as we believe advertisers are now starting to move ad spend to alternative platforms given Apple's privacy changes related to the rollout of iOS 14.5. taking a deeper look at some of the trends that drove this quarter's performance. The deadline for deprecation of third-party cookies in Google's Chrome browser, that is looming and driving action across the digital advertising ecosystem. Since May, availability of both cookies and mobile apps has fallen on average 21%, according to our bid stream analysis. As we enter 2022, Google will begin their phase-out of third-party cookie support. As advertisers face far fewer signals for targeting and measurement, conversation between those advertisers and buy-in is increasing. And so is the adoption of the World Without Cookies software release, which unifies buy-in's household ID within the software. Just like we have seen in CTV over the last eight quarters, marketers are now beginning to consolidate their spending in our software because the availability of our household ID increases. across all these ID-less environments, not just CTV. This gives marketers superior visibility and measurability over their advertising. During the third quarter, we witnessed customers' use of our household ID across other cookie-less channels like mobile, audio, and digital at a home. Most notably, customers increased their spending in the mobile channel by 40%. Chris will discuss more about World Without Cookies later on the call. Apple has increased the deletion of their ID with the release of iOS 14.5, and this has had a positive impact of advertising spend across our DSP in the mobile channel. Another trend we are seeing, mobile app marketers are looking for alternatives in a post-Apple IDFA world, and our existing people-based DSP is helping these marketers post-IDFA. During the third quarter, Apple's changes to iOS caused disruption in the ad ecosystem. Most notably, marketer spending was disrupted on other large social media platforms as they saw sharp performance decreases. Viant was a direct beneficiary of this disruption, as evidenced by the strong adoption of our household ID use across mobile. Furthermore, spending by mobile app companies increased by 86% in the third quarter compared to the second quarter of 2021. This disruption by Apple's changes is a near-term tailwind for Viant with marketers looking for platforms that offer greater measurability. These trends will continue as third-party cookies and other device IDs continue to be disrupted into 2022 and beyond. With that, I'll turn it over to Larry Madden, our Chief Financial Officer, for more on our third quarter financial results.

Larry? Thanks, Tim, and thank you, everyone, for joining us today. Before I begin, I'd like to remind everyone that consistent with last quarter, we have posted supplemental financial slides to our investor relations website to accompany today's presentation. As Tim mentioned, we are pleased to report that once again, we exceeded our previously issued guidance across all metrics in Q3 and are again raising our guidance for the full year. We continue to see increased customer adoption of our platform and believe we are well positioned for a strong Q4 and 2022 as our investments in personnel and technology mature. This afternoon, I will be discussing some of the highlights of our Q3 performance and as well as some of the key financial and operational drivers during the quarter. I will also be reviewing our current expectations for Q4 and for the full year 2021. With that, let me discuss some key highlights for the quarter. During the quarter, we began seeing the benefits of our World Without Cookies software release with customers increasing adoption across multiple channels where cookies or device identifiers do not exist. such as connected TV, mobile, streaming audio, and digital out-of-home. Our continued investment in our team and technology also continues to pay dividends, as evidenced by our solid increase in the number of active customers for the second quarter in a row. For the quarter, total platform spend increased 28% versus last year. Gap revenue for the quarter was $50.9 million, an increase of 26% compared to Q3 of 2020. And contribution ex-tax was $34.1 million for the quarter, an increase of 22% on a year-over-year basis. In terms of our previously discussed COVID-impacted customer verticals, we continue to see a solid recovery in Q3 across our retail and travel customer verticals. However, our auto customer vertical continues to be negatively impacted by the ongoing chip shortage. In Q3, we also saw a pullback in spend with some of our CPG customers attributable to supply chain issues. As such, whereas in recent quarters we've been reporting the impact of COVID across three customer verticals, retail, auto, and travel, this quarter we will report the impact from COVID and supply chain-related issues across two customer verticals, auto and CPG. Contribution X-TAC associated with our auto and CPG verticals declined 43% in Q3 as a result of supply chain-related challenges. These two customer verticals represented 46% of our total contribution X-TAC last year, and as a result of the declines in Q3 of this year, these two verticals represented just 21% of our total contribution X-TAC this quarter. In terms of CPG, based on what we are seeing in Q4 thus far, we believe these issues were largely contained within Q3 across a limited number of customers, and we expect stronger performance out of CPG in Q4. Across all other customer verticals outside of CPG and auto, which includes retail, travel, healthcare, and entertainment, among others, we saw a 76% increase in contribution extract during the quarter. These non-impacted verticals represented 54% of total contribution XTAC last year and now represent 79% of the total. While these supply chain-related challenges impacted our growth during the quarter, the fact that we exceeded our previously issued guidance and are raising our guidance for the full year speaks to the resilience and differentiation that our platform brings to the market. The headwinds created by these supply chain-impacted verticals will create an additional tailwind for growth as these issues are resolved in the coming quarters. From a channel perspective, our WWC software release during the quarter drove an increase in omnichannel adoption by our customers, as they can now leverage our unique household ID to seamlessly buy and measure their ad spend across digital channels where cookies or device identifiers do not exist. In Q3, we saw broad-based strength across all of these channels. Contribution X-TAC from mobile, streaming audio, and digital out of home grew 56% in Q3, while CTV grew 28% during the quarter. Growth in mobile during the quarter was partly driven by an influx of dollars coming onto the platform as a result of some of the market dynamics that the social and mobile ecosystems are facing as a result of Apple's recent IDFA changes. Marketers are testing and adopting our people-based approach as an alternative solution to better target and measure in this important channel, which we believe is another important tailwind for our business going forward. In terms of CTV, we did see a slowdown in growth of contribution extract relative to last quarter. This is largely as a result of a change in customer mix during the quarter created by the supply chain issues I previously mentioned. With CPG and auto marketers historically being big CTV buyers, the declines across these two important verticals during the quarter certainly muted our CTV growth rates in the quarter. CPG and auto customers represented 51% of CTV-related contribution XTAC in 2020 and 42% of CTV-related contribution XTAC in the first half of 2021. In Q3, CPG and auto customers only represented 22% of our CTV-related contribution XTAC. Excluding the impact of CPG and auto, CTV-related contribution XTAC across all other customer verticals grew 92% in Q3. Notably, we are already seeing a reacceleration of growth in CTV in Q4, with growth rates accelerating well beyond Q3 levels thus far into the quarter. With growth in CTV ad spend expected to outpace overall programmatic growth in the near term, we believe our people-based approach will continue to drive adoption across our platform, thus providing another driver of our growth going forward. On the customer front, the number of active customers and the average contribution tax per active customer saw strong momentum in the quarter. At the end of Q3, we had 305 active customers versus 258 in the prior year period, representing an increase of 47 customers or 18% on a year-over-year basis. Sequentially, the number of active customers increased by 17 compared to the end of Q2, representing our second consecutive quarter of double-digit growth in the number of active customers. We have now added a total of 39 active customers since the end of Q1. The biggest driver of new customer additions in the quarter had to do with our continued success across mid-market agencies which Chris will discuss further in a moment. Average contribution XTAC per active customer at the end of Q3 totaled 433,000 versus 404,000 at the end of Q3 last year, representing an increase of 7%. As we continue to ramp our sales and technology investment in 2021 and beyond, we expect further momentum around new customer acquisitions and average contribution XTAC per active customer. Now turning to operating expenses. I will be discussing operating expenses excluding the impact of stock-based comp and also excluding traffic acquisition costs, which are included in platform operations but are deducted from revenue to arrive at contribution extract. Total operating expenses excluding stock-based compensation and traffic acquisition costs totaled $30.5 million in the quarter, an increase of 51% or $10.2 million versus the prior year period. The year-over-year increase in operating expenses is primarily attributable to the planned investments we are making across the organization, with a particular emphasis on ramping our sales and technology infrastructure. Given the significant market opportunity in front of us, we believe these investments will drive growth in the quarters ahead. Adjusted EBITDA for the quarter was $6.5 million, and our adjusted EBITDA margin as a percentage of contribution ex-tax was 19% in the quarter. While 2021 is certainly an investment year in terms of scaling the business, our mid- to long-term targeted adjusted EBITDA margin remains at 35%. For the quarter, non-GAAP net income, which excludes stock-based compensation, totaled $3.1 million. And non-GAAP earnings per diluted share of Class A common stock totaled $0.04 for the quarter. From a cashflow perspective, we generated 6.5 million of net cash from operating activities in Q3 and ended the quarter with 243 million in cash. We believe that our growth profile and healthy balance sheet position, position us extremely well to take advantage of the rapidly growing market opportunity in front of us. In terms of share count, we had an average of 13.5 million class A common shares outstanding during the quarter, And we expect the Class A common share count to increase to approximately 13.8 million in Q4, primarily as a result of RSU's vesting. And finally, I'll now turn to our outlook for the remainder of 2021. As Tim discussed, we feel great about our strong positioning in the market, and we are in very early stages of capitalizing on the market opportunity for programmatic advertising. Given the increasing momentum we are seeing across the business, despite some macro challenges, we are once again increasing our guidance for the full year. For the fourth quarter of 2021, we now expect gap revenue in the range of $71 to $74 million, which represents year-over-year growth of approximately 26 to 31%. contribution ex-tax in the range of 47.5 to $50 million, which represents year-over-year growth of approximately 21 to 28%, and adjusted EBITDA in the range of 13.5 to 14.5 million, or a margin as a percentage of contribution ex-tax of 28 to 29%. And for the full year, we now expect GAAP revenue in the range of 212.4 to 215.4 million, which represents year-over-year growth of approximately 29% to 30%, contribution XTAC in the range of $140.5 to $143 million, which represents year-over-year growth of approximately 27% to 29%, and adjusted EBITDA in the range of $33.2 to $34.2 million, or a margin as a percentage of contribution XTAC of 24%. With that, I will now turn the call over to Chris.

Thank you, Larry, and hello, everyone. Today, I'll begin with highlights from our World Without Cookies software release. Then I'll cover how we're scaling the business to accelerate customer adoption. World Without Cookies is our largest and most comprehensive software update in years. It unifies our household ID throughout the software from onboarding to audience planning, inventory forecasting, frequency capping, reporting, and attribution. This release shows our strength in omnichannel advertising by increasing marketer visibility and measurability across all cookie-less channels. We recently exited open beta with more than 30% of our customers adopting the new WWC release. As clients become more familiar with our household ID and the flexibility of using it across all channels. Campaign performance remains strong for clients who have adopted our household ID versus using cookies or other device identifiers. For example, customers who adopted our household ID continue to experience strong performance gains in excess of 40% for reach and frequency controls. But more importantly, on average, our clients boosted new customer acquisitions by over 110% compared to cookies and other device IDs. In addition, we've seen that marketers who use our household approach have experienced dramatically lower customer acquisition costs. We're seeing that customers initially test our household ID in CTV, since it is naturally a cookie-less environment. However, customers soon realize they gain the largest benefit by consolidating their spend across all channels in our software. With the success of our WWC rollout, we recently provisioned the WWC software to our entire customer base as of mid-October. We will continue to educate all clients on the benefits of our household ID versus cookies in order to maximize the adoption across our customer base throughout the rest of the year and into 2022. I want to talk about some of the sales and marketing investments we're making to continue to scale the business. Our investments today are now beginning to pay dividends, as evidenced by our growth in new customers by 18% year over year, which we stated earlier now totals 305 customers. We've added meaningfully to our sales team by attracting top talent from across the industry. We segment our customers into three groups, large advertising holding companies, mid-market agencies, and enterprise companies. Our holding company and enterprise divisions are now led by former Google employees with significant experience in each. Recently, we've made traction with two out of the top five holding companies. One grew by nearly 60% year-over-year, and the other grew by over 150% year-over-year in the third quarter. Overall mid-market agency spend grew by 58% year-over-year in the third quarter. We believe that we will continue to do well in the mid-market and look forward to expanding our holding company and enterprise partnerships into 2022. On the marketing investment front, to create differentiation and increased awareness of our technology, we launched a new marketing campaign that speaks to the need of our next-generation technology in the new open web. It goes without saying that we're using our Adelphic software to scale this campaign. Early campaign results are exceeding our expectations, including site traffic, content engagement, and new business leads, which is laddering back to the performance that you see here today and Q4 guidance. Thank you, everyone, and I'll pass it back to Tim. Thanks, Chris. First, our revenue performance reflects the broad-based strength of Viant's omni-channel advertiser experience. And Apple's recent disruptions, along with other big tech changes, are causing ad buyer shifts that directly benefit Viant because of the superior visibility and measurability we offer. And last, our investment in people is now really beginning to pay off, with both large and mid-sized holding companies and customers direct. Everyone in this industry is looking for a solution to this very big problem, and Viant Software, we believe, squarely delivers that. Since this is our last earnings call for the year, I want to take a moment to say thank you to our employees for their contributions they've made in our first year as a public company. When we look out to 2022, what we see is incredible opportunity for Viant. Thank you very much.

At this time, I would like to remind everyone asking a question to please use the raise hand function located at the bottom of your screen. And with that, the first question comes from Maria Rips at Canaccord. Maria, your line is open. Please go ahead and unmute.

Perfect. Great. Thanks so much and congrats on strong results. So my first question is around customer additions. I'm trying to figure out how to turn on my video. So my first question is around customer additions. Can you just talk about what's sort of driving this strength? Is it your Salesforce investments? Is it growing awareness on the platform or is it something else? Maybe related to that, can you just talk about how the cohort of customers you added last quarter is ramping spend on the platform?

Got it. I'll take the first part of that, Maria. Thanks for the question. I think just the trends around how we're actually growing that, I think definitely our sales and marketing investments, you're seeing that play out as those new additions to the team, as the marketing that we have out there is increasing awareness. So you're now seeing those customer additions start to come on. But I would say just a little bit more color on that. We're doing really well, as we continue to do well, in the mid-markets. But also, as I noted earlier, the holdcos, we're really excited about the progress that we're making there as well. So starting really getting it at both the mid-market and at the holdco level. And what was the second part of your question, Maria? How is the cohort scaling? Yeah, so one thing to just, you know, we've had two quarters in a row of strong new customer additions. into the platform. So consider those to be our year one customers. They're typically testing. They're going to spend a lot less in their first year than they are going to be in year two and in year three. Our customer satisfaction retention still holds very strong. So we know that we're going to retain those customers. But those ones will really start to grow their spend in year two.

Got it. Thanks so much. And then thanks for the color on WWC. Can you maybe just talk about how many marketers participated in the WWC beta and sort of what portion of customers are currently utilizing it? I think you mentioned that you made the software available to everyone in October. And so you talked about increasing conversion and better results for your clients. Can you share any color around sort of whether clients are spending more on the platform once they start utilizing it, and wondering if you can maybe quantify that.

Yeah, so through the open beta phase, we got to 30% of our customer base. So that was actually really strong, a lot of the interest around that. In terms of the customers, we are seeing customers who are getting outperformance. They are spending more. I think you saw that in the quarter. I think we saw it with marketers that are getting challenges in large social media platforms. Where those platforms have relied on Apple's IDFA and the limitations that I think played out, they started to move the money. The money is heat-seeking. So if they're getting less returns there, they're going to move that money and look for alternatives. We definitely saw the increase in spending from those clients.

Got it. Thanks so much.

Your next question comes from Laura Martin at Needham. Laura, your line is open. Go ahead and unmute when you're ready.

Okay. Good. And I also don't know how to turn on my video, but I can ask you. The slides you guys publish are fantastic. I wanted to clarify a couple things. When you talk about audio and CPG being down 43% and all other up 76%, my recollection is you guys have sort of six key verticals. So the all other is what I'm asking about. What are the primary components of all other that was up so strongly in the quarter?

Hi, Laura. Thanks for the question. This is Larry. The main verticals that really drove that growth were retail, healthcare, entertainment, and travel. We have other verticals, less significant, but those were the key drivers.

Okay, that's great. And then you had this really awesome mobile audio and outdoor number of up 56%. In a quarter where a lot of people, a lot of stocks got hammered because mobile got disrupted by the iOS upgrades. My question to you is, when you think about, like, why is mobile audio outgrowing twice as fast as CTV, do you guys think?

Well, I think CCV was directly related to some of the supply chain impacted customers that we talked about. Automotive and consumer packaged goods are heavy investors in connected television, and those categories had the supply chain issues that we talked about. But I think what really is driving it is those environments are cookie-less. And what's growing in mobile with us is specifically Apple related to the 14.5 change for the iOS update. And with no IDFA, all of that ad spending is back up for grabs. And so taking a people-based approach, we saw lots of mobile app marketers testing our solution in the quarter. What was delayed by Google of cookie deletion until 2023 is here right now across Apple's devices. And so I think marketers who used Apple as a big distribution point to buy and measure their advertising are looking for an alternative solution. And we certainly saw that as a tailwind in the quarter and think that will lead to future tailwinds in the near term. I would, Laura, I'll just add one other thing. I think what we're seeing out of marketers who are no longer getting the performance, and if we specifically talk about mobile app marketers, which is a big percentage of the social media companies, their activities with them, they're just looking at alternative ways to be able to spend their money to get new user acquisition and or re-engagement with their current audience. So they are testing those other channels to see what their returns are. And we can tell you the returns were really solid, so we're very encouraged by the early signs that we're seeing where we're really effectively, as we've been saying, as these identifiers go away, this is a tailwind for us.

Well, I think I take your point because you've been talking about the cookie list world, but really IDFA is having a positive impact today, and that's sort of a positive we didn't even think of. So looking at the nine-month chart, I don't know what slide this is, sorry, but basically it says the CTV channel was like 13 million round numbers in Q1, 13 million in Q2. and essentially $11 million in Q3 of total revenue. My question is, do you think this shift to WWD could have slowed that growth short term while you're converting people over into the new software? Sure.

I think it could have had an impact in the quarter as we explained the benefits of using our single household ID across all channels for targeting and measurement. Certainly there could have been some extra attention in the quarter. As Larry had mentioned in the prepared remarks, we see strength in CTV in the fourth quarter. So as I look at it, the customers that were impacted in the supply chain turned out to be CTV investors, heavy investors in that category. I think as those have cleaned themselves up, CTV bounces back. But I think that's what we tried to highlight was the opportunity in this cookie-less world or all ID-less world of Apple in the near term. We're certainly seeing that benefit. But, no, I don't see any long-term change in CTV's outlook in the near term or longer term.

Super helpful. Thanks, you guys.

Thank you. Thank you.

All right. These are some great questions. And just as a reminder, if you plan on asking a question for the speakers, go ahead and use that raise hand function located at the bottom of your screen. The next question comes from Alex Ross at Barenburg. Alex, your line is open. Go ahead and unmute when you're ready.

Great. Thank you. And thank you for taking my questions and congrats on the quarter. Back to the world without cookies. and appreciate the video you shared in the beginning. Can you just comment more on initial feedback from customers on the release? And as a follow-up, are there any additional features that you've heard from customers that they may be asking for?

Yeah, certainly. I mean, one of the biggest areas of feedback that we get on the WWC software release is just the performance of the advertising. And maybe to back up from that, what I mean is the Apple advertising ecosystem is dark. If you're using one of our competitors, you're not bidding, buying, or gaining any new customers. in that ecosystem. And I think the first piece of feedback we hear is, wow, it really brings Apple's ecosystem back where we can bid the same way we used to and actually measure the same way we used to. So the feedback number one is on the measurability of the platform post-WWC release. It's measurement that they aren't experiencing in other platforms and drastically need given the current ID issues in the marketplace that's out there today. I would just say, you know, one big thing in DSPs, and this is software, so the usability of every feature that you roll out. I was actually just having this discussion with a client last week talking about the usability that they believe that they're getting, that this new release actually has increased our usability. above competitive platforms and is causing them to shift more money. It's not only about the performance that they get in the campaign, the outcomes of the campaign, it's also about the usability. And so those are great marks for our product team, and they really did a great job with this release.

Thank you. That's really helpful. And then just a second question, if you could comment on the sequential changes impact you saw from the supply chain this year and how you're thinking about that for Q4?

Yeah, so we think a lot of the areas in CPG, these are well noted out there, but we think what we're seeing is a lot of that we're seeing is subsiding into Q4. So we're expecting a rebound there in CPG. Automotive, we don't think that that is a strong rebounder uh necessarily in q4 however what i will say is our conversations uh with our automotive clients are actually very promising uh that we believe they will returning uh a lot of their spending in the first quarter of next year of 2022. a lot of them are looking to get aggressive a lot of them know that they have to make an up to do and it seems to be that they are starting to see some of these supply chain related uh issues with respect to their chips they believe that that will be subsiding in the first quarter of 2022. So that's encouraging.

Great. Thanks for the caller. Congrats on the quarter.

Thank you.

Thank you.

We do have an additional question from Laura Martin at Needham. Laura, your line is unmuted.

Hi. I just thought I would ask you a big-picture question. Omnicom has proposed standards for CTV, the Connected TV Signal Standardization Initiative. Do you guys have any thoughts on that and how it would relate to your WWD release?

You know, specifically on their exact proposal, I don't have any comment on their exact proposal, but we're all for standards. This industry was built on standards. Everyone's looking for a common framework to interact with each other. So I think that's part of getting everyone on the same page. Again, I will say that we think the standard is a people-based standard moving forward, leveraging many different ways to attach data and targeting at that household level. So all in all, I think what the Omnicom proposal shows is the substantial need for a plan going forward with no ID across connected TV. I think another big important factor that advertisers are looking for in connected TV is what content is their ad being shown against. And that continues to be a big open area that the sell side and the buy side continue to work through.

Super helpful. Thanks very much.

Thanks a lot.

All right. At this time, we have no more questions. I'll give it just a few more seconds to see if we have any more that come in at the last minute. All right. Seeing none, I will go ahead and turn it back to Tim and Chris for closing remarks if there are none. And we'll go from there.

All right. Thank you very much, everyone, for joining our third quarter earnings conference call. We will speak to you again next year and are very excited about the future. Thanks a lot.

Thanks. This concludes today's conference call. You may now disconnect.