CTV is where the action is for Magnite.
Although the full revenue impact of Magnite’s exclusive SSP partnership with Netflix hasn’t hit yet, simply announcing the deal, which happened in May, “created significant momentum for our business,” Magnite President and CEO Michael Barrett told investors on Wednesday.
“New and existing customers [are] asking us how we can help them move faster into programmatic CTV advertising,” he said.
Magnite’s CTV revenue was $63 million in Q2, up 12% YOY. By contrast, revenue from Magnite’s display and video (DV+) business – which includes everything other than CTV – was $84 million, up 7% YOY.
Magnite’s total Q2 revenue was $147 million, a 9% year-over-year increase, with growth exceeding its guidance.
CTV goes programmatic
The Netflix deal validates Magnite’s years of effort “to create the world’s leading holistic programmatic CTV platform,” Barrett bragged.
He also highlighted other recent big wins in the CTV space, including Magnite’s partnership with United Airlines to serve ads across its in-flight entertainment platform and the expansion of Magnite’s now seven-year partnership with Roku.
Beyond these deals, Barrett pointed to three additional drivers of Magnite’s CTV growth: healthy overall ad spend, strength in the CTV ad serving market through its SpringServe ad server and increased programmatic adoption by big-name streaming platforms.
Magnite already works with “just about every big [CTV] player out there,” Barrett said, although he did concede there are some big fish – namely YouTube – it will likely never catch.
Large streamers getting more involved in programmatic helped offset a slight downturn in CTV CPMs for the quarter, Barrett added.
“We believe these [CPM reductions] are supply-driven by the largest industry players scaling their CTV inventory, and not from a drop-off in demand,” he said. “Volume increases have significantly offset CPM reductions, and we believe these trends of accelerating programmatic adoption will continue.”
Plus, lower prices and more supply makes it easier for smaller buyers to enter the CTV market, which is a win for overall programmatic adoption, Barrett said.
The line on ClearLine
Barrett also offered a few updates on ClearLine, Magnite’s self-serve direct buying solution for CTV, but didn’t share any hard numbers about that part of its business.
ClearLine, he said, is “continuing to gain adoption, and we are seeing very good growth, albeit off of a small base,” thanks to traction with agencies and brands that are in “testing and early development.”
Barrett named Roku as a key early adopter of ClearLine and added that Magnite will begin launching ClearLine campaigns in partnership with omnichannel ad platform Mediaocean this coming quarter.
Cookie crumbs
But while much was said about CTV, Magnite didn’t offer much insight into what’s going on with its DV+ business.
Barrett attributed DV+’s 7% YOY growth to Magnite scaling inventory, improving efficiency through traffic shaping and investing in podcast ad formats and digital out-of-home.
He also alluded to efforts to improve monetization and performance through the use of AI, such as the fully automated Prebid wrapper optimization feature the company added to its Demand Manager publisher tech offering last week. However, it’s unlikely such a new product is generating much revenue yet.
In response to an investor who inquired about DV+’s Q2 growth rate lagging behind Q1’s 9%, Barrett noted that “there’s always some volatility in the DV+ line.” He added that mobile experienced lighter than usual growth in the quarter, “but nothing to point a finger at.”
But speaking of volatility, Magnite accentuated the positives of Google backpedaling on its plans to phase out third-party cookies for all Chrome users. The decision should relieve short-term uncertainty around display CPMs, Barrett said.
And Magnite doesn’t consider its investment in testing Google’s cookie alternative, the Privacy Sandbox, to be a sunk cost. “We are prepared to support Privacy Sandbox or a future iteration of it,” Barrett said, “for those that may want it.”
