Tim Vanderhook: Yeah. I believe you’re referring to the bankruptcy of MediaMath that happened right at the end of Q2 there. We had many shared customers with MediaMath. We believed we were gaining market share from MediaMath regardless of the bankruptcy, and obviously, they filed bankruptcy, which was tough to see for the employees. But I think it’s due to we offer a superior product and that was just capitalism playing out. We saw benefits the day of MediaMath’s bankruptcy filing. We had many shared customers and we saw budgets flowing out of MediaMath and into our platform. And so we were evaluating MediaMath from an acquisition perspective. Unfortunately, we couldn’t get conviction on their cost structure. It was just upside down there.
But ultimately, we felt like our product was going to beat them competitively and organically and so we decided not to deploy capital there, which I think proved to be a good decision. We gained many more ad dollars, not necessarily new customers, but more ad dollars in the platform the day they did file bankruptcy. So I think, one, they’re just one competitor in the mid-market. We compete against Yahoo! a lot in the mid-market head-to-head and we’re very focused on beating them in that area as well, too, and we’ve done a good job at that. And so I think, overall, we’re gaining market share from multiple people and what happened in MediaMath was an unfortunate event.
Jason Kreyer: One numbers follow-up for Larry. The GAAP revenue outperformance was greater than the contribution ex-TAC performance. I don’t know if that’s related to a shift between revenue models between fixed fee and percent of spend. That would be my speculation. Just wondering if you can add — unpack the difference?
Larry Madden: Yeah. I mean, first of all, as compared to last year, the growth rates across spend, revenue and contribution ex-TAC have — are beginning to convert. So they’re getting closer. Last year, that was not the case when we were going through the mix shift. But that being said, there may be some variability of relative growth rates in any given quarter based on mix, based on seasonality of customer spend, but we don’t expect growth rates for the different topline metrics to be materially different from one another, certainly not like they were last year. Longer term, as fixed price continues to become a smaller and smaller percentage of total revenue, we do expect contribution ex-TAC rate — growth rates to outpace revenue growth rates and we’ll see that quarter-by-quarter, but long-term, we do expect that to be the scenario.
Jason Kreyer: Great. Thank you.
Operator: And our last question of the day is from Chris Kuntarich from UBS.
Tim Vanderhook: Hi, Chris. Are you there?
Ben Tapper: I think you’re on mute, Chris.
Chris Kuntarich: Apologies. Can you guys hear me now?
Tim Vanderhook: Yeah.
Chris Kuntarich: Great. Can we just talk about some cost efficiencies, it seems like you guys have gotten great leverage there, just visibility into the ability to take further cost efficiencies as you guys are growing your headcount in the R&D group at 39%?
Tim Vanderhook: Yeah. I mean a lot of the cost efficiencies we knew we had a predominant amount of already in the bag from the actions that we took at the end of last year. But I would just say the productivity gains that we’re seeing by leveraging AI tools internally has been tremendous. Whether that be in our marketing group, them leveraging LLMs, whether that be, I would say, on our data science team and anyone in our analytics groups, utilizing that for customers on top of campaign performance data and then in engineering as well. I mean just doing — using basic tools like GitHub Copilot, we’re seeing just incredible productivity gains there and we think we’re only scratching the surface. So that’s really where we’re looking.
And I think there’s some offset to those as we leverage AI tools more. It’s going to — there are some technology cost increases there, but nowhere near the benefits that we’re gaining from it. So that’s a big focus that’s going to remain in the back half of the year.
Chris Kuntarich: Got it. And just as we kind of think about some of the idiosyncratic wins that you guys hear, the AI Bid Optimizer definitely stands out and where you’re getting the 35% CPM savings here. Just curious like if you could potentially quantify what the contribution was in the quarter or if just more anecdotally, you’re seeing more budgets open up. It’s bringing more conversation — you guys bringing more conversations on the table? Just help us frame up upside from that?
Tim Vanderhook: Well, it’s a revenue driver as well. It’s important to talk about the business model as we roll this out. When we achieve savings for our customers, we make a percentage of that savings. So we charge in general, it’s about 20% of savings. And so as we create value for our customers, it creates value and grows our revenue. Adoption was — it was very early, Chris, in Q2. So we wanted to just share some of the data points on some of these exciting numbers. So adoption is low. The positive is that scales into the future and it’s just another revenue driver for Viant as we exit 2023 and enter 2024 with more widespread adoption by the customer base. But when you have 35% savings in the initial data points, that helps accelerate adoption through our sales team and I think that’s a big one.
