And I really love it when we see win-win-win situations like that. All of those are benefiting all 3 groups: the retailer, the advertiser and us, the platform. So what I look for in the next 2 to 3 years is to see that continue and to see the trends of retailers saying, “I want to help close the loop. I want to use my data to help the biggest brands in the world sell products in my store. I want to spend my flywheel faster,” and we want to see more and more retailers think about their business the way that Amazon thinks about their business which is about spinning the flywheel and using data to make better decisions. If they simultaneously make that data available for measurement and attribution, it will be better for everyone, including and arguably especially, them.
So we want to see them do that over the next 2 to 3 years. As it relates to CTV growth, the macro trend that I just want to point out is that, of course, as there’s been macro pressure put on the consumer, at the same time, we’ve overwhelmed the consumer with choice in the CTV world. So if you think about you as a consumer, how many more choices do you have, especially in the U.S. in streaming as compared to what you have 5 years ago. There’s just way more choices. It’s hard to keep track of which app the shows are even on. There’s just way more choices in terms of apps and outlets. Even though there’s been a little bit of lull in the content production as a result of the strikes, in terms of the apps themselves and the need for sort of this content machine to continue to grow and grow subscribers, it’s gone up for all of them, whether you’re talking about smaller players like Paramount or the big guys like Disney, who reported yesterday.
All of them, in my view, need programmatic advertising to help them get the next stage of growth and that’s largely because they can’t just keep raising prices and consumers are saying, “I want to watch it but is there any other way than having a total bill for television that is bigger than what I had back when I was paying for cable? How can I get access to all the great content and not pay quite as much?” And what that’s brought all of them to, is ad-funded options. And I think companies like Disney and Netflix have proven this, where their ad-funded subscribers are worth, in most cases, about double to them what those that are not receiving ads are worth to them. The only way that, that keeps up and that they keep producing more revenue per user is if the ads get more effective and more relevant.
I don’t think it’s super easy for them to just create lots more ads. I think that will be too disruptive. I know there’s a lot of fear of that in all the content companies. So their way out is to make CPMs go up. The only way to do that is for them to make the ads more relevant. That means they’ll embrace UID2, so I — that’s already happened. All of them have offered public support. All of them are in the process of implementing. But the faster they implement UID2, the faster that will accelerate for them. And as we see more authentication and more options in terms of the way consumers can pay, it’s either through sharing a little bit more of their time to see ads or paying a bit more money, we’ll see more and more of them choose the ads as has historically always been the case.
And as a result, that means better and bigger partnerships for us. So, I really just think we have to continue to be a great partner to the content owners and keep showing up the way that we have. But otherwise, those macro vectors are the things that are really going to drive this. Really appreciate the question.
Operator: The next question comes from Jason Helfstein from Oppenheimer.
Jason Helfstein: Two questions. One, Jeff, that ties back to what you just talked about which is as linear shifts to CTV and to kind of upfront to programmatic solutions, right, it results in less waste. Although presumably, so some will have higher CPMs, right? But some of that spend will leave video and be allocated to some areas. Some of you participate in and like this quarter, your display accelerated, I think, a lot sequentially versus others who don’t like search and social. So just maybe talk about broadly where you’re helping — you have the opportunity to help advertisers reallocate money, other places where you do participate. And then Laura, just can you talk about the swing factors that kind of go to that comment of at least for the guidance? Are you assuming that trends that have stabilized in November continue? Or does the guide kind of more assume an average, right, of like what you’ve seen quarter-to-date?
Jeffrey Green: You bet. I appreciate the question, Jason. Of course, I’ll take the first part and then Laura, she’ll take the second part. So you’re right, that as money shifts from linear or traditional television into CTV, it, of course, has an opportunity to be reallocated. And whenever a CMO or a media buyer has the option to reconsider, of course, the first place where they’re usually looking is to do something very similar. And let’s not forget that television has always focused on being a top-of-the-funnel activity where you’re creating awareness. I would argue that’s where the heavy lifting of advertising is done which is the process of winning hearts and minds. Hearts and minds are not historically won in 240 blue and black characters.
They are won with moving picture and audio and emotion. And that work continues to be done at the top of the funnel in CTV. So I would argue that CTV right now is the most effective television advertising that television had ever seen. And arguably, it’s the most effective advertising at scale ever. So I don’t anticipate that most of those dollars are moving to formats that are way different and way different location in the funnel like search or social. Those budgets are not going there. It does have — as you point out, it does have the opportunity to leave video. But why would it when CTV is way more effective? And I would argue that the effectiveness has gone up more than the cost. And that as we see supply and demand continue, we might see more opportunities to find value as well as the target.
