Operator: Moving on to Maria Ripps with Canaccord.
Maria Ripps : Chris, you mentioned continued stabilization in the ad environment in Q4, but maybe can you expand on how you would classify market sentiment so far in Q4 compared to maybe the previous holiday periods? And are you seeing any sort of conservatism around ad budgets as a result of some brands sort of leaning more heavily into promotions?
Chris Vanderhook : We’re not seeing a lot — Maria, we’re not really seeing a lot of that. We’re certainly seeing accelerating growth from the third into the fourth quarter, which is what we typically see. This time last year, I would say the environment to us seems much different, much more positive this year. Retail continues to be strong as well as really just broadly across all verticals. A lot of it — I would say — so we definitely see a good ad environment out there. I would say the next piece would just be our focus in the company around mid-market, continuing all year long and servicing that customer segment, really proving it out on campaign performance. As I stated earlier, performance matters a ton and they’re going to allocate more of their money to the higher-performing channels.
So that’s number one. But I would say in the — really the open web around programmatic, it’s getting a lot more premium, the performance ever since Apple came out with changes well over a year ago. It’s really highlighted a lot of spend that could go to the Open Web programmatic, and that’s benefiting us certainly. And we really see a strong fourth quarter.
Maria Ripps : Got it. That makes sense. And just following up on cookie deletion. So as you move closer to — I think it’s slated for Q1 of ’24, could you maybe talk about how you’re positioned — positioning your sales force and whether the topic is being discussed in your conversations with brands and agencies at this point?
Chris Vanderhook : Yes. I’ll go and start that. I mean we’ve obviously been — we’ve clearly been in a market and this is the sign out front for us in our go-to-market is around all around signal loss. And the reality is that for a long time, — and this isn’t going to be new come January. Many marketers are definitely aware. They used to be able to match up all of their conversions on their website to all of their ad impressions. They used to be able to match those up at very, very high scale, 90-plus percentiles. But on the average customer, we see they’re only able to match about 30% of their transactions to their ad impressions. So there’s many marketers that are out there and have been out there for well over, call it, a year or two searching for measurement solutions.
So that’s really helped us. We have a big focus around measurement that drives customer adoption, and they really look to our tools to be able to help them with measuring their ad spend. So our go-to-market really isn’t really going to change. I do think it is going to be enhanced. Many of the things that we talked about on our Innovation Day. All of those products, a lot of them are aimed around measurement and the accessibility of measurement to make it easier for customers to measure their ad spends. But it’s — we’re not really in market talking to a customer who’s unaware that signal loss is affecting them. They all readily have that problem, and I do believe many, if not all, are searching for solutions. So we think that although it’s only going to be 1% of traffic on Google Chrome starting in Q1, Google themselves has been out there pretty heavily saying it’s for real this time.
So we think it will be a strong year for us again.
Tim Vanderhook : Yes, I would just add to that. I think 1 thing that’s often overlooked is the integrated product that we bring customers that’s really a differentiator. There’s a signal loss problem, and we’ve answered that with Household ID. There’s — you now have to move from pixels firing all across the web to clean rooms and our data platform plays huge important areas there, and you can instantly activate across the demand side platform. And it’s that integrated nature of the product offering for the buy-side advertiser, that really is a phenomenal solution in market. That’s driven our market share gains in ’23 that we think will accelerate in ’24.
Operator: Chris Kuntarich has the next question.
Chris Kuntarich: Can you guys hear me?
Chris Vanderhook : Yes.
Chris Kuntarich: Maybe just quick questions. Could you just give us a bit more color on how the quarter progressed on a monthly basis to CTV and kind of how those trends were through October. I think you had called out stabilization but considering the conflict that we had in the Middle East. Just curious if that was any impact there. And then maybe just 1 on the expense side. I think you guys had called out that product and engineering teams were up about 30% year-over-year. And I think you guys had cash expenses growing sequentially this quarter at about 10% and then the guide is for another 7%. So just curious, is how we should be thinking about staffing levels and engineering and kind of some of the other roles within the team here for the opportunity that you guys see ahead in ’24?
Tim Vanderhook : Larry, do you want to take both those?
Larry Madden : Yes, I can take them. Thanks, Chris. So in terms of the quarter, we did see pretty steady growth throughout the quarter. Definitely, the last month of the quarter typically is the biggest month. So that was even more pronounced. But it was steady throughout the quarter. And we’re seeing it across CTV. We’re seeing it across video more broadly, retail and consumer goods, we are seeing solid strengths, which again, to us, speaks a lot about the stabilization that we’re seeing. So I think it was a steady quarter. When we say stabilization, the only reason we’re couching it a bit that way is we don’t think the full power of the growth rate that existed prior to the kind of recession that we went through earlier this year and last year has fully returned yet but it’s definitely a lot more stable than it was 2 to 3 quarters ago, for sure.
