Operator: One moment for questions. Our next question comes from Mark Mahaney with Evercore ISI.
Mark Mahaney: It’s been — the build-out of Meta has been some time in coming for you, it’s obviously very material for you now. Could you just talk about the ability to continue to expand within Meta? How much of the inventory there you have access to? What the range of the solutions you’re able to sell in and how many more solutions you could sell into that? And then separately, could you just comment briefly again, cookie deprecation with the pushout balance early next year? Just your latest thoughts on the impact that has on your business.
Lisa Utzschneider: Sure. Happy to take that, Mark. So with Meta, we’ve been running our verification solutions. But what the advertisers were clamoring for is opening up — for Meta to open up the Facebook news speed, Instagram feed and Meta reels with our total media quality. You’re familiar with that, the brand safety and suitability solutions. So we launched that product February 5. As I mentioned before, we’re seeing very strong adoption, we saw 50% growth year-over-year in the volumes. That’s with the TMQ adoption. And in terms of expansion, we also recently announced that we launched an additional 21 new languages on Meta and offering now a total of 28 supported languages. In addition to that, with TMQ, and we’ll continue to roll out more markets and more languages for our advertising customers with Meta.
We also launched, as I mentioned, we pulled misinformation into the first half of our product road map because of the demand from our advertising customers to launch misinformation before the elections and in April, we also were thrilled to launch misinformation in meta, which is aligned according to the GARM framework. In terms of your second question with cookie deprecation pushing out to 2025. Cookie deprecation is actually a tailwind for our business because what we focus on is the environment and the contextual environment where advertisers are running their brands. So even since it is getting pushed out to 2025, we’re not dependent on cookies for any of our verification or optimization products. And again, we see it ultimately as a tailwind.
Operator: One moment for questions. Our next question comes from Youssef Squali with Truist Securities.
Youssef Squali: Lisa, versus that 50% growth in volume at Meta that you just referenced, how does that jive with the revenues that you’re generating from that? Are you charging separately for that? And I think you talked about it obviously being a premium product, is that part of an existing bundle that you’re already selling? And then I have a follow-up, please.
Lisa Utzschneider: Yes. Happy to take that one. So yes, we’re seeing tremendous adoption of our total media quality product. That is representing that 50% year-over-year volume growth is because of launching TMQ in February. And with TMQ, because of the sophistication of the technology, the granularity of the technology, we’re able to classify video image, audio tech frame by frame. So what that means is 30-second video is running, we’re classifying every single frame. And because of the granularity we’re able to demonstrate and improve that we’re finding higher quality media for the advertisers because of that, we’re charging a premium.
Tania Secor: To add on to that, thanks, Lisa. We’ve already successfully negotiated a premium rate on our TMQ offering. And to help you if you seize the opportunity of Meta and the way we’re thinking about it, Meta revenue today is just over 40% of our social media revenue. And as we mentioned, with the volume growth of approximately 50% that we’ve experienced on all of Meta since its launch, assuming that continues through the rest of the year, that’s roughly, give or take, a $15 million increase in our expectations for Meta overall.
Youssef Squali: That’s great. And then you talked about double-digit growth in revenue with the mid-tier clients. Can you unpack that a little bit and just talk to the drivers of that? That’s actually very impressive.
Lisa Utzschneider: Sure. I’m happy to take that. So in Q1, we did see double-digit revenue growth with the mid-tier clients, and it’s an area where our sales team is very focused on. A couple of data points to add to that more than half of our large customers today are defined as mid-tier customers. And where we’re seeing nice runway and opportunity with the mid-tier channel is establishing partnerships with mid-tier DSPs. We mentioned it earlier on the call, there were two in particular in the pharmaceutical sector. We also signed five mid-tier agencies as their preferred or exclusive partners. So we’re feeling very good about mid-tier in terms of the traction and momentum that we have, and the team will continue to cross-sell, upsell and put new logos on the board with the mid-tier channel.
Operator: One moment for questions. Our next question comes from Omar Dessouky with Bank of America.
Omar Dessouky: So just looking at your guidance, it looked like you raised guidance for the year by about $3 million. And first quarter was maybe above your guidance by about the same. So it looks like a path through to me. I was wondering, first of all, if that’s correct, I was wondering, for the balance of the year, have your outlooks for measurements or optimization changed as compared to right after the fourth quarter print? You speak more enthusiastically about social media measurement, driven by Facebook and Meta, which sounds to me like maybe you’d be more enthusiastic about the growth prospects for measurement, which would imply that optimization might be a little weaker. That’s kind of how I’m reading it, but I want it to be a little bit more — get a little bit more clarity on if that’s how I should think about it.
Tania Secor: Omar, for clarity, our full year revenue guidance was an increase of $2 million at the midpoint of the range and we also increased our EBITDA midpoint by $2 million. So 13% revenue growth at the midpoint on the top line and a 33% EBITDA margin at the midpoint.
Lisa Utzschneider: Yes. And in terms of the back half of the year regarding the product road map and product adoption, like I said before, nice momentum across the social platforms, especially with our TMQ product, — we are also launching, as we’ve mentioned earlier on the call, new partnerships with social platforms like Snap, we were the first-to-market offering brand safety and suitability Snap, which will be available later this year. And then launching several — what we’re referring to as cookie-free products. So looking into the future in a cookieless world, products like MFA, attention, misinformation, which we offer both at the prebid and postbid, we’re seeing our advertising customers lean into these solutions. I had mentioned before the robust MFA beta that we did running 100 campaigns, and we’ll just continue to cross-sell, upsell and ride this momentum and ensure we’re driving adoption in the back half of the year.
The other note to make is we’re also confident on our ability to deliver on this increased outlook because of the robustness of the product road map, the investments we’re making in innovation, investments we’re making in AI power products and the ability for the team to execute.
Omar Dessouky: Let me just maybe focus on optimization, just so I can like narrow this down as compared to when you gave your initial guide, has your outlook for optimization worsened at all even if a little bit?
Tania Secor: I mean, Omar, overall, while we had a beat in Q1, we did raise our guide for the full year, given that many of the products that we’ve launched and now we’ve announced the launch of those products, and given the ramp we have expected for products that are already in market like QSP, for example, which is an optimization, we have a lot of confidence in the second half of the year. I wouldn’t say that our view is that, that’s declined. I mean we’re still confident in the second half of the year and optimization, in particular, we’re looking at more than doubling our growth rate from Q1 to Q2. And no, we’re still positive and confident about our outlook for the second half of the year.
Omar Dessouky: Just one more question, if I could. You haven’t mentioned context control on the call or in the transcript. And I think in the last couple of quarters, you started to talk about kind of a decel for that specific product. Is context control going to grow in ’24? Is it a driver of growth anymore? And if so, like how is that growth coming? Is it coming from new accounts using it for the first time or increased consumption by existing accounts?
Lisa Utzschneider: Great question. So in terms of context control performance in the period, it reflected the overall optimization demand, which, as you might remember, it ramped through Q1. So it improved in March and will continue to grow in Q2. From a new logo versus existing, we’re seeing both. We’re seeing the team put new logo wins on the board with context control, and we’re also seeing existing advertisers increase their spend in context control.
Operator: One moment for questions. Our next question comes from Mark Kelley with Stifel. You may proceed.
Mark Kelley: Great. I was hoping to go back to CTV and ask you if it’s possible to kind of strip out Publica from that conversation. I know Publica is super important for that segment, but can you talk about, a, I guess, maybe the current trends you’re seeing in CTV. And b, in my mind, as things become more programmatic and biddable. I think that makes your solutions more desirable and needed a bit more. I guess, is there a way for us to frame either attach rates or how your products are used in like a private deal environment versus biddable programmatic. That would be great.
Lisa Utzschneider: Yes. I’m happy, Mark, to take that question in terms of the trends and differentiation that we have. So — and I know you’re very familiar with Publica. So public as a platform, we have deep relationships, both with the major global broadcasters and the TV OEMs. In addition to that, we have IAS relationships with the Fortune 500 global brands. And because of bringing together both the buy side and sell drive, we’re uniquely positioned in CTV to create a marketplace for transparency between the publishers and the brands. Because speaking with the brands — the number one reason, at least what I here and the team here is in terms of what’s holding brands back in shifting linear TV dollars into CTV and programmatic CTV in particular, it’s lack of transparency.
