Vision and Strategy Overview

Transcription

1 Vision and Strategy Overview Jeff Green Founder and Chief Executive Officer

2 Brands are spending billions to make consumers hate them.

3 The biggest fear of many CMOs: a lost generation.

4 The media universe is getting bigger. We are not a destination and are eligible to touch $1 Trillion in ad spend eventually.

5 Traditional (linear) TV will be irrelevant in 10 years.

6 Walls around gardens will not last.

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8 The Importance of Advertising is Going Up GDP versus ad spend. The march to $1 Trillion. $ Total Media Ad Spending Worldwide, Billions and % change $ $ $ $ $ $ % 7.0% 7.3% 7.7% 7.4% 5.5% 5.0% 2.80% 2.50% 2.70% 2.90% 2.90% 2.80% 2.80% GDP Growth Total media ad spending % change Sources: GDP Growth: World Bank Global Economic Prospects June 2017

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10 May $.08 Day. First 1M Month. First 1M Day. First 2M and 3M Day. First 100M Month. First 5M Day. We ve been profitable since 2013 and take rates have stayed steady since.

11 We are a SaaS company pointed at data, advertising and marketing. We are not a media company.

12 Price discovery is foundational to healthy markets. Data driven is better than guessing Programmatic will eventually power all 600 Billion (soon to be 1 Trillion) Buy side is forever in a power position Decisioning is where the money is. Sell-side fragments Sum of tech take rate is 25-30% (sell side and exchange side is too high right now). The basic tenets of our strategy 10 years ago. Buy-side aggregates around 3 to 10 players. At least one will be independent. To be one of those standing at steady state: Global Omni channel (mobile and TV most important) Each will have a unique data advantage

13 We are not competing with Google & Facebook. Media is.

14 1 in 6 Source: American households are cord cutters. 19.6% of 125 MM households. 6 % Increase in cord NEVERs in Now about 10% of adult Americans are nevers. Source: 61 % 67 % TV watchers are NOT willing to pay more for a TV service without ads. Source: Digital Audio Consumption Americans over 12 that listen to internet radio this year at least once a month. Source:

15 TV content is at the top of its game.

16 5 major variables forcing change in TV. Content costs are going up. Subscription prices are capping. Cable subscriptions have doubled. More ads on linear TV.

17 5. CONNECTED TV IS BETTER.

18 The number of connected TV ads available to TTD increased 10X over the last year. Q over Q2 2017

19 We fund media. We power growth.

20 Growing the global middle class is the best thing we re doing at scale.

21 The Rise of Global Middle Class Population (in millions) Poor Middle Class Rich Source: Homi Kharas, The Emerging Middle Class in Developing Countries (Presentation at Brookings, 2011)

22 250M People Makes More Sense Like This

23 The Rise of Global Middle Class Middle class consumption expenditures (PPP, constant 2011 trillion $) Trillions Sub-Saharan Africa North America Middle East and North America Europe Central and South America Asia Pacific Source: 0 OLD NEW OLD NEW OLD NEW OLD NEW

24 The Rise of Global Middle Class Size of the Middle Class, (millions of people and global share) North America % % 322 7% Europe % % % Central and South America % 251 8% 313 6% Asia Pacific % 1,740 54% 3,228 66% Sub-Saharan Africa 32 2% 57 2% 107 2% Middle East and North Africa 105 6% 165 5% 234 5% World 1, % 3, % 4, % Source:

25 The Rise of Global Middle Class Top Five Emerging Markets With The Best Middle Class Potential: Media Income Real Growth over the period, % India Nigeria Indonesia Philippines China Media Income in 2030, US$ per household Source:

26 A Closer Look at China s Middle Class Already the second largest middle class in absolute terms, at 157 million consumers (US is #1) But small in relative terms (only 12% of population) Also small given its level of development, due to income inequality and (especially) small share of household expenditure in GDP By 2030 over 70 percent of China s population could be middle class, consuming nearly $10 trillion in goods and services

27 China strategy phase 1: outside/in

28 STATE OF THE INDUSTRY BY CHANNEL AND GEOGRAPHY

29 Growth of Digital vs Growth of TTD CAGR 2014 to 2017E 89% TTD 12% Digital Source: IDC New Media Market Model for Digital Advertising, Dec. 2016

30 250% 200% Growth by Channel LTM Q / LTM Q ,000% 200% 150% 116% 100% 50% 0% 35% 58% 5% 49% 44% 21% Video and CTV Display, Native Mobile Audio Digital Industry TTD Source: Video, Display and Mobile from Magna Global Advertising Forecasts 2016 and Audio from emarketer ad spending estimates

31 Growth by Geography LTM Q / LTM Q % 340% 300% 250% 200% 150% 100% 50% 0% 213% 184% 145% 123% 96% 59% 22% 25% 12% 7% 12% 9% 9% 12% 17% US UK SE Asia/Singapore Korea Japan France Australia HK/Taiwan Digital Industry TTD Magna Global Advertising Forecasts 2016

32 Barrier to entry

33 The landscape

34 Objectivity matters more as time goes on.

35 Ride the waves vs. accelerate change.

36 Competition is changing the landscape very fast. Impressions are duplicated. SSPs are running more auctions. DSPs have to participate in more auctions. Operating leverage is more critical than ever. The profitability finish line has moved.

37 Before header bidding: 1M auctions (looks) Competition and header bidding for buy-side tech. And monetize 20,000 of them (wins) 2% Win-to-look ratio. After header bidding: If wins are the same but auctions are 6M (looks) 20,000 Wins 0.6% Win-to-look ratio

38 Before header bidding: 200,000 auctions (auctions) And monetize 40,000 of them (wins) 20% Win-to-look ratio. With header bidding. If wins are the same but auctions are 600,000 (looks) Competition and header bidding for sell-side tech and exchanges 40,000 Auctions monetized (wins) 6.7% Win-to-look ratio

39 SSPs do not send every impression to every bidder.

40 We are long term focused.

41 We re building trust with shareholders. Q316 Q4/FY2016 Q117 Q217 Launched Successful IPO Revenue increased 84% y/y Mobile Video grew over 350% y/y Launched Audio Channel Cohort growth 81% YTD For FY2016 surpassed $1b in Spend Record revenue of $203m increased 78% y/y International grew 2X faster than US for year Opened Jakarta Office CTV grew 40X in 2016 Revenue increased 76% y/y Mobile Video grew over 220% y/y Data usage grew 77% y/y Adj EBITDA Q1 record at $6.3m Power 7 of 10 largest brands in the world Opened Paris and Madrid Office CTV Inventory increased 10X y/y 35% adj EBITDA margin Hamburg office grew nearly 150% y/y Tokyo grew nearly 300% y/y Mobile video grew 171% y/y Opened Shanghai Office

42 What we ve done since IPO (besides producing financial results)

43 A few things we ve done since the IPO 1. We ve put ~30% of engineering resources on new UX -- changing users expressiveness. Giving them half their time back. 2. We changed the business model of cyber security in digital ads and launched ads.txt. 3. Rolled out a gold standard for SSPs and exchanges due to header bidding. 4. Partnered with more companies as ad tech consolidation has rolled out. 5. Launched a new connected TV product.

44 5 Goals for next 5 years (or less). What to expect from us.

45 CTV and video will be our largest channel. 1. Surpassing mobile.

46 China will become a top 3 market for TTD. 2.

47 Quarterly change in daily active users 25 % Snap 173 million Total number of daily active users Facebook WhatsApp Top 10 Social Networks Monthly Active Users Facebook 1.3 billion Messenger YouTube WeChat/Weixin QQ 868 Instagram Qzone Snapchat Facebook Twitter Weibo Sources: The Wall Street Journal

48 Our ID footprint will be larger than any single company s login footprint. 3. And take down some walls around gardens.

49 We will grow data usage at 2X the pace of our media spend. 4.

50 We will change media planning. (which will change TV buying, social, and search) 5.

51 Adjusted EBITDA at 40% Incidentally, take rates will remain at historical ranges of 15 to 20%. Long-term target.

52 Our Culture

53 1. We re self-service omnichannel (all decisioned digital) software platform %+ of our spend coming through MSAs and is relatively predictable. 3. Our tech is measurably better at decisioning. 4. We are objective and align our interests with media buyers. 5. We have a massive TAM. 6. Best positioned to capture massive connected TV and international growth opportunities. 7. Delivering BOTH revenue growth and profitability. 8. We ve been profitable since TTD is an investment in programmatic advertising for the whole internet.

54 Thank you.

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