Digital Media Solutions, Inc. (NYSE:DMS) Q4 2022 Earnings Call Transcript

And adding home services as a marketplace for EMS is strategic because previously, home services exists below the current categories that we track as a Brand Direct vertical and now you’re going to have home services as a marketplace behind that. So investing in the marketplaces becomes a focus for us to drive growth as well and we’ve demonstrated proficiency there and other verticals, too. So the round turn on it is, it’s accreted, we’re going to grow internationally and domestically, we certainly believe we can get leverage and cost savings as a result of the leverage comes from the combined resources and the lack of overlap and the customers in the media capabilities. And then there’s simple cost measures that can be enacted there to just help the leveraging the business on their side because they get the benefit of the broader DMS ecosystem.

Operator: Our next question comes from Jason Kreyer with Craig Hallum. Jason, your line is now open. Please go ahead.

Unidentified Analyst: Thank you. This is Kyle on here for Jason. So first question, just kind of wanted to ask what you’re kind of seeing in the market and what really led to the decision that now is the right time to move into services?

Joe Marinucci: Hey, good morning, this is Joe speaking. So we do business. Historically, when we’ve entered into the Marketplace segment of the market, it’s off of trends that we’re seeing on the Brand Direct side and inside of Brand Direct. The verticals that we serve when you look at property and casualty health, e-commerce, education and careers and consumer finance, they all live on both the Marketplace side and the Brand Direct side. Marketplaces have basically been the evolution of execution on the Brand Direct side. So although Home Services isn’t a category currently we’re tracking five. It’s a big portion of quote, everything else that’s not in the five. And we’ve seen good execution there on the Brand Direct side. So because of that execution that’s what led us to believe that we can add a marketplace and see growth there because the media capabilities that we leverage on the Brand Direct side are the same media capabilities.

It’s the same technology data and media capabilities that we would leverage to grow on the Marketplace side. So, we already have data, we’re already working with notable customers, in the various trades, they work in windows and doors, roofing, kitchens and bath, those specific categories and we’re seeing success Brand Direct. So, the natural evolution is to grow that into the marketplace side of the business. So, we have internal data that supports that this is the direction that we want to go and we talked about the general overview of the markets, when we press release the signing of the acquisition a couple of weeks ago.

Unidentified Analyst: And then lastly, I understand you kind of mentioned that you’re looking to be a little conservative, but just so far, have you seen any indication of any improvements in the macro that gives you optimism for the years? Thanks.

Joe Marinucci: The choppiness that we see remains mainly in property and casualty and in the auto segment. We have seen in consumer finance, ancillary products and services, credit cards, personal loans, debt consolidation. Those products and services, we’ve seen a lot of growth in those categories. We’ve also seen a rise in our partnerships with the legal industry as some of the prominent mass tort campaigns have been marketed heavily behind. So we’ve seen increased marketing spend. And then just generally, in times, and we’ve been at this for a while the Company’s been around for over a decade now. And in times when there’s uncertainty and challenges inside of the markets. As noted on the call, digital performance marketing, it’s a pure play for the advertisers for ROI, because we’re effectively delivering customers.