Magnite still thinks connected TV is the bee’s knees.
CTV represented 42% of Magnite’s Q2 revenue, holding steady YOY, while mobile ads made up 39% and desktop ads 19%. CTV’s contribution to Magnite’s revenue was up 8% YOY, from $52 million to $56 million.
Total Q2 revenues increased 11% YOY to $152.5 million.
A mixed bag
Yet, in the near term, several factors are putting a damper on CTV revenue.
A “challenging market” led a handful of clients to pause their big-ticket managed service campaigns, CEO Michael Barrett told investors on Wednesday.
And the political spend that buoyed CTV revenue during the second half of 2022 will create difficult comps for the rest of 2023, according to CFO David Day. This will be a relatively quiet year for political advertising until spend ramps up in 2024 because of the US presidential election.
Meanwhile, as large sellers like Disney, Roku, Warner Bros. Discovery and Vizio move more inventory from direct-sold deals to programmatic transactions, they’re grabbing share from smaller CTV publishers.
“While we believe this trend is positive for the long-term health of the programmatic CTV market and our business,” Barrett said, “it is negatively impacting our near-term financials.”
But Magnite remains upbeat about its CTV prospects and sees the channel as integral to its long-term growth strategy, despite direct deals comprising nearly 80% of Magnite’s CTV business today.
“The shift to premium programmatic CTV is in full swing, and Netflix hasn’t even started its programmatic efforts,” Barrett said.
A ClearLine of sight
Speaking of programmatic efforts, Magnite announced a new retail data partnership with Attain earlier this week. Advertisers that use ClearLine, Magnite’s direct buying platform, can now measure outcomes for video buys.
And last week, Magnite announced its tech integration with sell-side competitor FreeWheel’s ad server so that publishers using FreeWheel can view demand for inventory in Magnite’s SSP.
But ClearLine is clearly Magnite’s priority
Since the platform launched in April, Magnite has added numerous agency partners, including Horizon Media, GSD&M, Omnicom Media Group Germany and Stagwell Brand x Performance Network. ClearLine’s initial launch partners were GroupM, Camelot and MiQ.
And on the video inventory supplier side, A&E Networks, AMC Networks, Disney and Fox are among those that have joined ClearLine launch partners LG and Vizio.
But is ClearLine contributing to Magnite’s revenue? It doesn’t yet appear to be having a material impact. That will likely change in the quarters to come, though, as partners and clients become more acclimated to the product.
“There’d be some sense of disappointment on our end if 2024 ended and we weren’t able to cite a ClearLine contribution to the growth rates of CTV,” Barrett said.
Tough it out
In the meantime, SSPs have been having a tough time lately, and the MediaMath bankruptcy at the end of June didn’t help. Magnite topped the list of ad tech providers MediaMath left high and dry, with $12.5 million in unpaid debts.
But Barrett was quick to bat away speculation that SSPs are on the chopping block.
He cited the “magnificent” example of The Trade Desk, which has consolidated spend on its platform to such an extent that “the DSP world has almost become a duopoly,” he said.
“Over time, you’re going to see that play out on the SSP side, and we’ll be the beneficiary of that shakeup.”
