Display advertising is old and busted. Streaming CTV is the new hotness.
Obviously, those aren’t the exact words that Magnite CEO Michael Barrett used when speaking with investors during the company’s fourth-quarter earnings call on Wednesday – but it’s pretty much what the numbers say.
Luckily for Magnite, in addition to its display business, which is housed within its DV+ platform alongside online video, native, audio and digital out-of-home, it’s also got a fast-growing CTV business.
“Any weakness that we are seeing in DV+ is manifesting itself in the CTV bucket,” said Barrett.
Meaning, if a marketer is spending, say, $100 bucks on a campaign, Magnite is still getting all of that budget, just allocated in different ways.
In Q4, DV+ generated $101.5 million in net revenue after traffic acquisition costs, representing 4% year-over-year growth. This excludes political spending, which was “modestly below expectations,” according to Barrett.
Yet Magnite’s CTV business grew 32% YOY minus (political spending) to $93.6 million.
Altogether, Magnite brought in $205 million in total revenue, up 6% from $194 million in the year-ago quarter.
Crossing the CTV Rubicon
But although DV+ is under more financial pressure heading into the new year, Magnite’s leadership team doesn’t sound especially concerned.
So far, Magnite hasn’t seen any negative impact from internet-wide declines in search referral traffic, said Barrett. In fact, ad requests within DV+ are up 30% year over year.
Meanwhile, the judge’s forthcoming ruling on remedies in the DOJ’s ad tech case against Google (remember that thing?) may also “create meaningful share reallocation opportunities” that Magnite would be able to capitalize on, Barrett added.
Until then, however, at least Magnite can fall back on its rapid CTV growth. According to CFO David Day, CTV represented 48% of the company’s Q4 contributions after traffic acquisition costs – not more than mobile (37%) and desktop (15%) combined, but certainly close.
In any case, CTV is now the majority of Magnite’s business, said Barrett.
Not bad, considering the company didn’t really dive into CTV until after Rubicon Project merged with Telaria in 2020 to become Magnite.
AI? No problem
Barrett also had a lot to say about the business potential of AI, particularly the Ad Context Protocol (AdCP) framework that Magnite recently began experimenting with. This framework is designed to allow buyer and seller agents to interpret campaign briefs, match audiences and place campaign buys in an automated fashion.
The AdCP framework isn’t ready for primetime yet, but, so far, Barrett said Magnite is “encouraged” by what its seeing in test campaigns.
But even if we do reach a point where every ad tech company is buying via agents, players like Magnite will still be able to differentiate themselves with the data they use to train and inform their models, according to Barrett.
“I don’t necessarily see a take rate impact in an agentic future for Magnite,” he added.
