We’ve done a lot of work there, but clearly with our own proprietary Ad Server, we can do a lot more. So net-net, as we look out, we see a lot of reasons to be really excited about the traction we can get, whether it’s pent-up demand from advertisers who should come back when their budgets release more, new advertisers who are getting to know us, that should spend more, and then of course, our ability to keep adding on net new every single period. So it certainly has been a tough quarter in Q3 and as we look into Q4 but we see also a lot of room for optimism as we look out into 2024 ideally with a little bit of tailwind coming out of the ad spending backdrop, too.
Mark Mahaney: Thank you, Sarah.
Sarah Friar: Thank you, Mark.
Operator: Our next question comes from Eric Sheridan of Goldman Sachs. Eric, please go ahead.
Eric Sheridan: Thanks so much for taking the questions. First, Mike thanks for everything. I’ve enjoyed all the insights over the years, and Matt, congrats on the new role and wishing you success in it. Sarah, if I could just follow up on Mark’s question on advertising. I think what we’re trying to discern from the call is you clearly have a lot of momentum in SMB and mid-sized advertisers around the ads manager? Is there a way to better discern what that momentum is in terms of a backdrop or tailwind for growth, exiting 2023 and or thinking about what the headwind to revenue growth is from either category underspend versus more normalized trends so we can better understand sort of the recovery rate to sort of think about in 2024? Thank you.
Sarah Friar: Yes. So, I mean, and clearly we’re not happy with our performance right now from an overall revenue perspective. What I was trying to get to is to say we do, though see a lot of room for optimism. Maybe I split our ad base into the three areas, so larger enterprises, more mid-market clients and then the SMB. I’ll start on the SMB side because that actually was a real highlight in the quarter. SMB revenue grew about 23% year-over-year. And why that’s particularly important is this is the group that is on our proprietary stack today. They moved on to what we call Nextdoor Ad Server, so the server on the back end; they can also self serve on the front end if they choose to through NAM. So they are the group that can actually take the most advantage today of what we’re able to do once you’re on our platform, which is optimize and better target.
On the mid-market side, what we’re seeing there is that advertisers are coming. We added more new logos in mid-market than we’ve done in any other period. However, they are still shifting more towards what we would call managed, because our tech platform still needs to add a lot of the features that they come to expect when they’re managed on Nextdoor. So we want to get them into more of a self serve motion. And then finally, on the enterprise side, I think the headwind there really has been advertiser budgets. When I look at what are the verticals that did well for us in the quarter? So we’ve continued to do well in areas like healthcare, government, professional services, verticals like tech and telco and retail stayed fairly stable. But what we did see with a number of larger advertisers that tend to be in the home services space or in the financial services space as they really retracted their budget.
When we talk to them about it, it’s a little bit, it’s not you it’s us sort of conversation, they’re generally just pulling that budget back across the Board. So their intention is when they have more budget to come back to next door, but for right now they’re just finding it very tight in terms of their ability to spend, and that clearly has ramifications for us, given our scale.
