Joey Levin: I’ll do the second one first. The services business, look, every business we want to always be better. But the services business is where we want it to be right now, meaning there are no other things that we are pairing out of the services business. You can still see in the comp, things down year-over-year, but that was when we were in the higher consideration managed projects business. And there is this final step in roofing. But where we are right now in services is a place from which we think we can build. We think it’s very healthy. We know it’s a very good customer experience, our best customer experience, and we’re excited to expand it. There is the reality in services with services participates in service requests, sort of downstream in Angi, which means that the services business revenue growth will be somewhat tied to what happens on demand overall and service requests overall at Angi.
But in terms of the business that we’re doing there and want to be doing there, I think that’s all in a healthy place and where we want it to be. And we’re happy to close the roofing after and move on from there. For the first question.
Christopher Halpin: Yes. And just one technical point related to the roofing transaction. We’re thrilled to have that business in the hands of a private third party who will operate it well and it’s returned to being a customer. We flagged this in the footnote on Page 2 of the earnings release. But under GAAP, roofing will be a discontinued operation starting next quarter for Angi but given materiality will not be for IAC. So in order to keep the Angi financials consistent between what Angi will put out stand-alone and what is rolled up in IAC, we will move roofing on a historical basis into emerging and other. On a go-forward basis, there’ll be no impact. We’ve sold the business. But just on a historical basis starting next quarter, roofing will be within Emerging & Other and then will be a discontinued ops for Angi.
I’m sure we’ll continue to work through that to explain that with investors. But just one thing we wanted to flag. On your first question on Dotdash Meredith and what we’re seeing macro. We are vigilant on the point. You can’t have interest rates on consumers go from 0 to 5% and higher percent, without some impact. There are elements that are just distinct to DDM that we expect to grow and take share just because we didn’t have these integrations a year ago and the Meredith assets are such a big platform. But relative to expectations and broader trends, we’re looking. What is hard is that the cadence of e-commerce and holiday shopping keeps changing year-to-year. If you go back to ’21, things were pulled forward because everyone was worried about the supply chain issues and not being able to get their child or loved one the right holiday present because they would run out.
So things got moved up to November. Last year, consumers waited because they weren’t worried about supply chain. So things moved into much more packed up in Thanksgiving and even into December. We flagged that last year. This year, we’ve seen discussion among competitors and retailers about consumers being more deal-oriented and waiting. There was the Amazon Prime Deals Day, which was strong, that probably pulled some demand forward. And then we’ll see how the cadence works of consumer spending and also how promotional e-commerce players are. But I’d say we’re cautious, but not seeing any specific signs of a slowdown, but we’re managing our business, expecting anything could happen in this environment.
Christopher Halpin: Thank you. Operator, next question.
Operator: Our next question will come from Tom Champion with Piper Sandler. Please go ahead.
Tom Champion: Hi. Good morning, guys. Joey, can you just talk about the evolution of the business model at Angi? It was discussed a little bit in the note, but the movement away from lead gen to a marketplace, what does that mean? Can you expand on it? And then maybe for Chris, just to clarify the comment around the Angi buyback. That’s the existing buyback, right? So the point that you’re driving home is that you want to lean into it. It’s a statement around timing. Any comments would be helpful. Thanks.
Joey Levin: Sure. On lead gen to marketplace, it’s very important to Angi. It’s a big sort of rallying cry internally. What that means is going from acquiring a customer and a service request and moving that over to the service professional as quickly as possible and moving on. That is more akin to lead generation. There’s nothing wrong with lead generation. It’s just hard to build brand and loyalty and drive what is another important feature for us, which is customers for life on ANGI with that mindset. And so what’s changing is trying to drive more interactions on the platform and making those interactions on the platform richer and building signs on the platform of which customers on both sides, homeowners and service professionals, do the best job and interact with each other most productively and rewarding those behaviors.
That’s how I think a marketplace builds and grows upon itself. And I think in the past, we were a little too much lead generation, which was getting that first transaction and moving on. And now it’s more to get those transactions, those interactions and those systems of reward happening on our platform. Just one more example that I referenced earlier, but the – that’s the difference between just sending the homeowners’ phone number to a service professional and having the service professional call them to driving messaging and helping messaging back and forth on the platform. And allowing them to contact each other and less of the one-way transactions or one-way communications. There’s many, many things in the road map or things that we’ve launched along those lines to improve that experience, and we’re seeing the benefit of that in terms of transactions, monetized transactions per service request.
But that is – that’s the theme of what we’re trying to accomplish.
Christopher Halpin: And then Tom, thanks for the question. On the buyback. Yes, our message was that we are going to be buying, obviously, subject to price and liquidity levels, but then we are putting a plan in just relative to anticipating that question from investors. Thank you. Operator, one last question.
Tom Champion: Thanks a lot guys.
Christopher Halpin: Thank you. Operator, one last question.
Operator: Our last question here will be from Kunal Madhukar with UBS. Please go ahead.
Kunal Madhukar: Hi, thank you for taking my questions and squeezing me in. A couple, if I could, one on Angi and one on Dotdash. So on the Angi side, what I’m seeing is based on our math is ads and leads revenue per monetized transaction, that declined about 11% on a year-over-year to about $40. Marketing costs declined only more modestly at like 8% to about 27.5%. So can you talk about how the LTV to CAC is kind of changing within this dynamic of marketing costs not declining as much as the revenue. And then on the Dotdash side, the whole concept of like premium advertising was you going out and talking to advertisers on a one-on-one basis and selling them a high-intent ads or high-intent leads. How does the Amazon – the recent agreement with Amazon, how does that kind of change that view or maybe it doesn’t? Thank you.
Joey Levin: You broke up for a second, Kunal. The last I think I got it, you’re talking about the announcement of Amazon around D/Cipher. And is that what you’re referring to?
Kunal Madhukar: On the publisher cloud, the Amazon DSP that they just announced at the UNBOX 2023 Conference.
Joey Levin: Yes. So – and D/Cipher, Dotdash Meredith being a part of that, just I think I can get both those questions. But what that means is it’s essentially easier for an advertiser in Amazon’s retail media network to access our inventory. And to access our inventory on kind of any basis. But those – that, we think is a huge win for Dotdash Meredith, a huge validation of the work we’re doing on D/Cipher and of long-term benefit to DDM if we can capture those dollars now that the sort of infrastructure and endorsement is in place there. I hope that answers the question. But if not, we can come back to it and Chris can add more to that. But on Angi, the revenue per monetized transaction is – rate is down right now. I think that we, in some areas, had not optimized price, meaning we had pushed too far on price and we’ve come back on price in certain areas.
