Looking for confirmation of the outsized rewards of being well-positioned in the booming connected-TV (CTV) ad space? Then look no further than the Q4 ’18 and full year 2018 performance of 3 public companies representing 3 different vantage points on CTV ads - Telaria, The Trade Desk and Roku - all of which reported strong results in the past week, powered at least in part by their CTV success.
This past Tuesday publisher-focused Telaria reported full year revenue of $55.2 million, up 26% vs. 2018. On its earnings call, CEO Mark Zagorski noted the company is “now fully focused on growing our core CTV business.” CTV accounted for 33% of Telaria’s revenue in Q4 ’18, up from 1% at the end of 2016. Zagorski said CTV ECPMs are “significantly higher than desktop or mobile” helping boost overall ECPM to $12.88 in 2018 vs. $11.46 in 2017.
Last Thursday, buy-side/programmatic provider The Trade Desk reported 2018 revenue grew by 55% to $477 million. On its earnings call, CEO Jeff Green highlighted a 6x growth in CTV inventory since the beginning of 2018, with a 9x increase in CTV ad spend year-over-year. Green said that “CTV spend on our platform had a material impact.” And he further noted than in “Q4 ’18 we had record spend in CTV. Over 160 advertisers spend at least $100,000 each in CTV….and a double digit number of advertisers spending in the millions.” He also observed that the fastest growing segment of CTV inventory is from TV networks including NBC, Fox, CBS, ABC, Discovery, ESPN and A&E.
Last but hardly least is Roku - known for its ubiquitous streaming players, but increasingly for its content/services, including The Roku Channel - which also reported strong results last Thursday, with revenue in 2018 rising 45% to $743 million. Most notable is Roku’s “Platform” segment which includes its ad sales (all on CTV of course). Platform revenues soared 85% to $417 million.
The Roku Channel is a critical component of the Platform business, but as GM Scott Rosenberg noted on Roku’s earnings call, “new live services with partners like ABC, Cheddar, People TV and others” all contribute too. Roku monetized video ad impressions more than doubled in 2018. Roku added that in the “medium-term the most significant factor driving Roku’s financial performance will be increasing monetization of our growing installed base.” In other words, fully capitalizing on CTV ads. 2019 guidance calls for $1 billion in revenue, with two-thirds coming from the Platform segment.
As public companies, Telaria, The Trade Desk and Roku all provide a glimpse of how powerful the CTV ad tailwind is today. But they’re obviously just 3 of the many other companies participating in the CTV ad boom. Most of these are either private or just small parts of much bigger companies, so it’s hard to know specifically what impact CTV is having. But it’s very fair to assume that if you’re executing well in CTV these days, the financial rewards are substantial. Signs of the ad model’s growing role in video are everywhere, but in CTV they’re most pronounced.
(If you want to learn all about CTV ad revenue, join us at the 9th annual VideoNuze Video Ad Summit on May 29th. Register early to save and to double your chance of winning a 55-inch Roku TV, generously provided by Roku.)