LiveRamp earned $78.3 million in the second quarter, a 30% increase from $60.2 million in the same period last year, according to its earnings report released Tuesday.
The company’s gross profit also grew year over year, from $36.4 million to $40.6 million.
LiveRamp is still shaking off the blow from Facebook’s third-party data prohibition. The company estimated that the Facebook losses checked total revenue by 10%.
But those annual numbers will improve as the market readjusts to having less platform data, LiveRamp CFO Warren Jenson told investors. For instance, LiveRamp’s data marketplace business grew 2% last year to $49 million, but it increased by 60% when the impact from Facebook’s policy change is excluded.
And in the next six months, LiveRamp will stop paying fees from last year’s sale of Acxiom, which will also affect its annual earnings. It will also pare back costs related to its transition to the Google Marketing Cloud. Clearing those expenses from the bottom line will improve LiveRamp’s profit margin and year-over-year metrics, Jenson said. He cautioned against reading too much into annual percent growth swings because a few chance business wins or policy changes that level out in a couple years could cause strange quarterly results.
“These trends are still working in our favor,” said CEO Scott Howe.
Identity, identity, identity
LiveRamp wants its identity to be a “ubiquitous” feature of digital media and marketing, Howe said.
A deal with Index Exchange and dataxu last November enabled LiveRamp’s first-ever bidstream integration, which improves match rates and LiveRamp’s data exposure, since information such as location, device ID or Wi-Fi network often accompanies the bid request. Six months later, Howe said LiveRamp sees more than 8 billion bid requests per day via its bidstream integrations.
Expanding its array of identity data is critical for LiveRamp. Chrome’s new privacy policy only marginally reduces cookie data, but there is an overall trend toward declining cookie value. If cookies were functionally erased for marketers, the LiveRamp device graph would still function.
“It’s that redundancy that we’re pursuing,” Howe said, pointing to other data that can fill out an individual profile, including email addresses, home or IP address and mobile device IDs.
“What has me optimistic is that if cookies went away, our importance to the ecosystem would go up,” he said, because marketers need viable alternatives to the audience IDs owned by walled gardens.
Data-driven television
If LiveRamp is to succeed and justify its multibillion-dollar market cap, it will need to be one of the winners in the race for addressable TV advertising.
“Nobody, not even the companies directly involved, know what’s going to win here,” Howe told one investor after being pressed about LiveRamp’s confidence in ad-supported video breaking the grip of ad-free streaming subscriptions.
He said the most promising media players in the OTT and connected TV (CTV) category, including Hulu, YouTube and Viacom-owned Pluto TV, are testing different levels of advertising and subscriptions, as well as more targetable live-TV bundles.
LiveRamp also strengthens its core identity asset by growing its television industry connections. Earlier this year, the company started incorporating CTV IDs into IdentityLink, its cross-device identity graph. The TV device IDs help target and measure campaigns and anchor LiveRamp’s home address and IP address data with a connected device, similar to how a smartphone anchors individual targeting.
