Brent Thill: Thank you.
Christopher Halpin: Thanks, Brent. Operator, next question.
Operator: Our next question will come from John Blackledge with TD Cowen. Please go ahead.
John Blackledge: Great. Thanks. On DDM Digital, you provided new engagement metrics, including core sessions, which is the bulk of engagement on your key properties. Could you talk about the third quarter growth in core sessions and kind of what you saw in October and maybe how that plays into kind of revenue trends in 4Q and going forward? Thank you.
Joey Levin: I’ll start, which is, again, we mentioned this a lot, but core is where we’re putting the investment and where we think the brands are that have a perpetual value and strong brand strength. So seeing those grow is nice, and seeing those accelerate growth is even nicer. That trend, we talked about what’s happening in Q3 and continued to improve in October, and that includes entertainment, so that’s notwithstanding that there’s not a lot of news in entertainment right now. So that’s an exciting place to be.
Christopher Halpin: Yeah, just to add for context, this traffic we thought is good information for investors to highlight the drivers behind the business. One thing we flagged, as Joey said, core, the 19 key brands we’re investing actively behind. The total sessions, is the whole portfolio, and the difference, which is the spread of non-core is what drove the decline in total sessions versus a growth in core. It really comprises weaker long-tail sites that were part of Dash or Meredith, where we’re not prioritizing investment, as well as third-party sites that Meredith historically did the advertising sales for that we acquired in the deal. So, you know, we expect those non-core sites to continue to a trick to probably a de minimis level so that core and total will be the same at some point.
For a sense of those trends, the core properties represented 67% of total sessions in third quarter of 2022 and are just under 80% of total sessions this past quarter, and that will only continue. So, that is — we expect those core sites to continue their growth. Hope to have entertainment, as Joey said, be a tailwind, and it’s a key story of the business.
John Blackledge: Great, thanks. If I could ask one more question on DDM Digital. You guys called out the performance marketing revenue accelerated to 22% growth year-over-year in 3Q. Just kind of what drove that acceleration, any color and verticals that were strong and that were drivers of that part of the business?
Joey Levin: Yeah, it’s really the continued execution by Meredith on a core thesis of acquiring Meredith, which was Meredith has tremendous brands, traffic, and content, but definitely under punched its weight in modern e-commerce integrations to that content. And we talked extensively through the journey of integration last year that some of the delays pushed out those e-commerce integrations and really bringing back Meredith’s expertise to the properties, but we’ve had them going this year, and you can see the steady growth from, flat to 12%, to up 22% this past quarter in overall performance marketing. Across categories, it is overwhelmingly goods commerce, consumers buying products that is driving that. We have relationships with all the big retailers.
We think we’re the biggest partner of many of those, and we think we move from strength to strength with those folks of where we’re integrating and driving, and we expect that to be second derivative positive for a while, including going into this holiday season where we’re excited about the integrations there, and performance marketing will be, a key tailwind to monetization per session.
Christopher Halpin: And the only thing I’d add to that is performance marketing, especially in this environment, is something where advertisers want to be and want to shift spend, and we have great inventory and great tools to be able to move that, and so I think we’re capturing that overall trend.
John Blackledge: Thank you.
Joey Levin: Thank you, John. Operator, next question.
Operator: Our next question will come from Justin Patterson with KeyBanc. Please go ahead.
Justin Patterson: Great. Thank you very much. Good morning. I was hoping you could elaborate on just the work ahead to improve both the service provider experience and the homeowner’s experience. You called that out in the letter as one area where there’s still a lot of work to chop. Thank you.
Joey Levin: Yeah. So service provider experience is — I just want to highlight again some of the work that’s been done here. It is — we talked about retention a lot. We also, I think, last quarter talked about it, but we continue to raise meaningful improvements in bad debt, meaningful improvement in the lifetime value of the service professionals coming onto our platform. And just anecdotally, the interactions we’re having with service professionals have in tone improved meaningfully. And they see that because I presume, and we can measure that to some extent and they can measure this better than us, that they’re getting a better ROI on our platform. This means we’ve improved pricing and which means we’ve improved quality and when those things are happening, pros are happier.
And as I said multiple times, pros, when they’re happier and more engaged, make homeowners happier and more engaged. The key fundamental element of what a homeowner comes to our platform for is to match with a service professional and the more — whether they match with a service professional at all is a huge cliff. Then the more service professionals they match with up to a point is very important. That increases their odds of connecting with a service professional and then that increases their odds of hiring a service professional. We’re seeing each of those levels of the funnel improve right now. And we still have a lot of tools in there that we haven’t launched yet. We’ve improved messaging, for example, and improved messaging on web and mobile and brought those things to parity, but we have not yet really fundamentally driven the transaction more heavily towards messaging.
