Jessica Reif Ehrlich: Has there been any change to advertising ARM since last quarter when you said advertising ARM was at least as high as the standard here, indicating that advertising-only part of it was $8.50 or more.
Spencer Neumann: I can dig it if you want, Greg. It’s no change. Our overall ads ARM continues to be higher than basic ad free globally, same as statement on standard in terms of standard where the ads higher than standard ad free in the U.S. And so generally, we’re just — we’re pleased with our per member ad economics and continue to feel really good about the opportunity to grow the ads plan, the ads offering, good for members, good for our business. But as Greg said, we just got — we’ve got a lot of work to do to get from here to where it can be, we believe, over time, which is a material additional incremental revenue and margin driver for the business.
Jessica Reif Ehrlich: Can you tell us about your initial upfront advertising performance? I mean, you seem to have everything advertisers are looking for. But this is a really tepid overall advertising environment. So is there anything you can say about how — what the reaction has been?
Greg Peters: Yeah. Sure. It’s — first of all, it’s great to be able to have an opportunity to meet with so many advertisers in a concentrated period and hear what they need from us. And so that’s helpful to synthesize what are our top requirements and how can we better support those advertisers. I think you’re absolutely right that the general market is soft. We’re seeing that across most different companies. But we benefit right now from being relatively small. So there’s scarcity around our inventory. So I think we’re able to manage that process effectively, and we’re seeing good demand and good progress on the upfront within that sort of broader soft market. But our job really now is to add as quickly as we can advertiser features that meet their needs so that we can make that — our offering more attractive as we scale that inventory up.
Jessica Reif Ehrlich: What tools and how much time do you need to like invest to build your own ad-tech infrastructure?
Greg Peters: Well, I would say, we’re — it’s a gradual ramp, if you’re looking for a specific number, we have tens of engineers working on this at this point in time. They’re delivering features on a consistent basis. Microsoft has even more than that, that are delivering features on a consistent basis. And we’re working in collaboration essentially in a priority order when we see back to that what are advertisers telling us they need. We’re just sort of knocking these down one after another.
Jessica Reif Ehrlich: But is there like a time period in order to achieve scale, is this like a three year plan before you feel like you really have all the tech capabilities in place?
Greg Peters: Yeah, both scale in terms of reach and the tech capabilities in terms of features aren’t sort of a binary condition. It’s not like, you have it — you don’t have it one day and then you suddenly have it the next day. So I would say we’re just constantly iterating and walking up both of those hills. So scale, I’m pretty impressed with being able to get to 100% quarter-to-quarter growth. So that’s a good trajectory that feel like puts us in a good place and that will be better and better every year essentially. And then the technical features, again, we’ve got a long list and it’s not as if one day we’re magically done. But continue to progress on what we’re doing right now, allows us to sort of move from building the basics into that sort of innovative space that you mentioned before.
