I want to start bigger picture with you, Lisa, Lisa first. Sure. When you joined IAS a good few years ago, you had a long career in advertising. Yeah. You know, you've been to very, very big shops before as well. Like, talk a little bit about, like, how the industry changed from like when you joined to where we are now, because it seems, I mean, there are so many different vectors and so many different evolutions that we're seeing at the same time. That must be very exciting for you, but like maybe bring us on that journey a little bit. Sure. Thank you for having us, Raimo, and hi, everyone. I'm Lisa Utzschneider, CEO of Integral Ad Science, and I've been at IAS, I can't believe it, almost five years. I joined early 2019. Uh. In terms of over the last almost five years, from a macro perspective, some of the shifts we've seen, there are a few. So given the fact that over the course of the last few years, we've lived through a global pandemic, when you think of all of the events that have happened at a broader, macro, societal level, that has definitely shifted, what consumers are doing online- Mm. How marketers are investing in digital advertising, and it's been a tailwind for IAS's business. So I'll pick out two macro shifts in particular. Through the pandemic and coming out, explosive adoption of social platforms, short-form video in particular. Consumers are spending more and more of their time on their phones, consuming social media, generating content, user-generated content. Sure. I would say the second trend coming out of the pandemic is the explosive growth of CTV and viewing streamed content. Both of those vectors have been a tailwind for our business, especially when it comes to video and brand safety and brand suitability. Yeah. Because marketers, they wanna be where the consumers are. The consumers are on social platforms, but they just wanna make sure that their brand frontage into brand-suitable content. Yeah. And then, do you—if you think about that time period, did you also see, like, a change in the industry? And not in the industry, it's more like with the players and behavior of certain players, marketers, making it kind of more difficult for advertisers to kind of have, make sure that the right content is kind of displayed to the view from the theater. I'm thinking of a lot more bad actors in there to help people kind of want to make money off advertisers. Has there been a change - has it? I mean, it's always been, like, some sort of problem, but it does feel the last few years, it kind of got a lot worse. Yeah, I agree with that. So I do think there's much greater awareness by the brands in the importance of running their ads in high-quality media- Right. the importance of sophisticated fraud detection, exactly what you're speaking to. Yeah. That's been cited as almost 1/3 of every dollar that goes to waste due to- Wow ... fraudulent activity, that's a big problem. And then also, again, the dynamic nature of user-generated content in live social platforms. Mm. It poses both a challenge for the brands, but also a massive opportunity because it's an incredible environment to be able to engage with consumers. Yeah. Okay. And then from your perspective now, like you're running IAS for the last five years, with all the kind of opportunities, or like for you, that's actually opportunities because you're helping advertisers. But how do you prioritize that? Because there seems to be like, you could go in so many there, you know, as you mentioned, CTV, short-form videos, et cetera. Like, how do you prioritize where you want to play, how you invest your, your, your dollars? Sure. I'm a big believer in placing a few bets and doubling down and investing in those bets. And our few bets right now that are definitely paying off, you can see it in our numbers, which I would be happy to walk you through- Yeah ... is doubling down in the large social platforms, getting in the live feeds, running our multimedia classification technology. Those live platforms, Meta, TikTok, and X. In addition to that, ensuring the programmatic or optimization side, also providing solutions, again, for marketers to, to ensure on a pre-bid level that they are able to bid on inventory that is all of the things we've talked about related to classification, that lands them in a place that is higher-quality media, that ultimately drives their ROI. Yeah. Also, what I hear all the time from brands is they want greater transparency. They want to understand better where their ads are running, programmatically, and if those ads are delivering the highest ROI. We're very focused on transparency, too. Yeah. And you kind of mentioned Tania already. Tania, like, if you think about last quarter, like, you know, results were, looked very, very strong for you guys, your price reaction. Like, you know, if you look at your share price performance this year, kind of shows that people are getting your space again. Can you maybe summarize a little bit what you saw last quarter? In the third quarter? Yeah. We were really, really pleased with third quarter results. Yeah ...coming in at overall 19% growth, much better than expected, and there were many levers that drove that performance both- ... optimization front and on the measurement front. On the measurement front, we are firing on all cylinders with social. Social accelerated the growth of social media revenue for us accelerated 41%, from 33% in the second quarter. And social is now just crossed more than half of our measurement revenue, at 51% in the third quarter. And then on the optimization front, so real acceleration in the growth rate, of 10% second quarter to 21% in the third quarter, and that was also broad-based as well. It was increased adoption of our products, it was enhanced integrations with some of our DSPs. Mm. We saw some benefit from one of our second largest vertical, which was travel and entertainment. And we also saw the benefits from the investments that we made in our mid-market strategy, that market strategy and then products. We saw the benefit of that in the third quarter, so we're really pleased with third quarter results. Yeah. Okay, great. And And you mentioned social and short-form videos are, like, the big thing. Maybe me as a dad as well, I see my girls are kind of on that all day long. Like, can you talk a little bit about, like, where you see how quickly that category has taken off? Like, and where are we in terms of that? In a way, it almost feels like taking over the market a little bit. Like, what are you seeing there? Sure. The way we like to frame the social platforms are big building blocks, medium-sized building blocks. Yeah. So the big building blocks being the large social platforms I mentioned before. TikTok, our TMQ or Total Media Quality technology is running in the live feed of TikTok, identifying image, text, video, audio within the live feed, over 50 markets, over 90 languages, with very high accuracy rates. It's a very granular, sophisticated technology backed by AI. YouTube, second big building block. The technology is running in YouTube in over 30 languages. X. X, we announced an exclusive partnership with X, in August. We're now in beta, running pre-bid brand safety and suitability in the immersive video feed, not in current feed of all the texts that have been happening. Yeah. But we're in beta with X. And then the fourth big building block is Meta. We're currently in beta in Meta, where we're running our TMQ technology with a handful of advertisers in Facebook Feed, Instagram Feed, and Meta Reels. So those are the big blocks. Yeah. Medium, but with lots of opportunity, short-form video. So both YouTube and Meta Reels have launched products to directly compete with TikTok's short-form video. Both companies have discussed these products and the adoption rate on their last two earnings calls publicly. Meta Reels, we launched the viewability, invalid traffic in Meta Reels end of second quarter. As I mentioned, we're now in beta with the brand safety Meta Reels, and YouTube Shorts, we're running viewability and invalid traffic today. Yeah. I think it has... And from your perspective, I mean, to understand these videos is obviously more work than for you guys as well than kind of understanding a picture or a text. Like, can you charge more for that, or is it just- Good question. for you, like, more about, like Good question. So as I mentioned before, our Total Media Quality, or TMQ technology, is highly sophisticated, highly granular, backed by AI. So we are classifying real time, frame by frame, that's every single second, for example, of a TikTok 30-second video. Yeah. Video, image, audio, and text. We can also identify brands and celebrities. We're proving out in TikTok today, that because of this sophisticated technology, we are showing 3x higher quality media that we are able to identify folks and athletes of the world, which means we are moving further away from the inappropriate content and heading into running their ads in higher quality media. Our thesis is higher quality media means higher ROI. One thing we actually think that it's important to announce, because we announced it publicly about five, six weeks ago, we also hired a lead data scientist from Meta. His name is Kumaresh, who's leading our data science team. He built, he was on the team that built Meta Reels and built the model of Meta Reels. Yeah. So he's a really important hire for us as we continue to invest in all things related to data science and AI, in particular, for the social platforms. I mean, just this—like, that's where I'm as a software guy get excited, because, like, the science behind that- Yeah -to be able to do that in real time, because it's not, like, ten minutes later, that doesn't help anyone for you guys. Must be amazing, like, the investment time must be spectacular. Yes, it is. An example that I shared before, that TMQ alone in TikTok, when we leveraged OpenAI on top of our AI-based TMQ, we went from four languages to over 90 languages within 24 hours, with high accuracy of those 90 languages. That's just one example of how we're leveraging OpenAI to accelerate our product roadmap, accelerate speed to market, and continue to drive value for our customers. And getting back to your point about price- Yeah ... because we are proving out that it's identifying higher quality media, we are able to charge more for TMQ product because we are able to demonstrate higher value for the marketers. If you think about the, I mean, there's price and there's volume. Do these videos will they kind of drive overall volume, or is it just a replacement of like, I used to kind of put an image out, now I put a video out. Is it driving the overall volume in the market, or is it just, you know, a replacement? It's driving volume as well. Okay. We saw that, we saw that in the third quarter with measurement volume accelerating in the third quarter. Our price was consistent in the third quarter versus last year, but definitely seeing it both on the TMQ price increase- Yeah but more innovative products that are driving return on ad spend with advertisers, what Lisa talked about, but also on hard products. Yeah. Okay. And then, Lisa, you mentioned AI as one part of it. Like, like from your perspective, because, you know, you're dealing a lot with content, and there's like AI-generated content, which kind of you want to identify because it's actually not real. You guys can also use AI to kind of do a better, you know, like, improve, like, how you kind of operate. Like, talk a little bit about the impact. And you mentioned already the hires there- Yeah, sure. - But like, it's been such a kind of interesting overall subject. Sure. You know, a great example is upcoming U.S. elections in 2024 is top of mind for the brands. Mm. I personally spend a lot of time with the brands, and they're asking a lot about upcoming elections, our investments in misinformation and deepfakes, and we are deeply investing in both now. Our goal for 2024 is that 1/3 of our engineering team are data scientists, led by Kumaresh, who I mentioned before. Yeah. Misinformation alone, I mean, as you know, Raimo, no one's cracked that code. Yeah. No one's cracked it on the social platforms- Yeah In terms of whether it's election season or beyond the election season, information that is not accurate or is not real or is misrepresented, just continues to explode across the internet. And we are heads down focused on rolling out a misinformation category at the beginning of next year. I won't share which social platform we'll roll it out first, but we want to get it out ahead of the election so that marketers are able to say, "Yes, in addition to those other categories, like adults, hate speech, all the others, violence. Yes, I do not want my brands adjacent to any misinformation happening on the social platform." The way that's built, it's a combination of human-based and AI technology. Yeah. Well, that's cool. And then, sorry, and I apologize, Tania, for the question, but like, us as financial guys, always like... So if you have this extra channel coming up, does that mean you charge differently or you just kind of improve, like, how differentiated you are in the market? Yeah. It's the same pricing model. Okay. Right? Fixed CPM for our clients. Volume is based on the period, and our revenue is recurring based on the stickiness of our relationships. Yeah. Okay, perfect. And then, you mentioned some of the newer products coming out, that they are working on. Meta comes up a lot when I talk with investors. Can you talk a little, maybe just to levels, like, you know, what are you doing with Meta at the moment? And, you know, why might some people be excited about next year and the extension of the Meta product? Sure. So Meta continues to be a really important strategic partner. Up until this beta I had mentioned, that's currently running, we've been offering viewability and invalid traffic solutions across the Meta portfolio. Yeah. But the brands that really been waiting for is for, as I mentioned before, Meta to open up their live feeds, Facebook news feeds, Instagram feed, and Meta Reels, so that we're able to launch our TMQ technology. It's already running in TikTok, already running in YouTube, so that we're able to classify and identify inappropriate content. All of that classification, the categories are based on industry standards called GARM. Mm-hmm. So the tech is built to GARM, but marketers are really chomping at the bit for this. And the one other thing to call out that is a little different from the TikTok launch is that Meta, we already have a robust advertiser base in place already using IAS on Meta. Yeah. So the launch, it will be a ramp, but we don't need to go out like we had to do with TikTok and find- Yeah advertisers to test the beta. We already have a robust piece in Meta. And then, remind us, like, how big is Meta in comparison to, for example, the TikTok volume, et cetera? Like, just to give an idea of, so they get an idea about scale. Yeah. Like you have- We don't break out the volumes. Yeah. What I'm comfortable breaking out, and this is rough estimates of just total advertising- Yeah platforms, with the social platforms. So Meta, you have to correct me if I don't have this right. No. Meta is roughly $133 billion in advertising revenue- Yeah - annually. TikTok, last time they disclosed it, roughly $10 billion-$12 billion - Yeah ... in ad inventory. Yeah. But again, I'm not comfortable sharing- Yeah. - the volume. Yeah, yeah, yeah. No, fair enough. Like, I think it gives them, it gives us an idea about the scale. Yeah. Yeah. It's no wonder people are excited. Yeah. Yeah. Very excited. You guys must be as well. Yeah. Did it... that's the best I have, you know, a good bit of higher volume. So, was part of the work that you're doing to enable higher yield of your product, the scalability of your product to be able to deliver that? Or, or is it just the IAS work with your ecosystem and be able to work with? Like, what's the, you know, if you do the work there now, like, what, what's the, what's the big difficult part? Yeah, good question. So, the beauty of Meta, as I mentioned before, is the TMQ product is coming. Mm-hmm. It's coming in TikTok- Yeah. It's coming in YouTube. And so, Meta and the brands, I mean, they'll benefit from the fact that the tech is already running. We do get asked sometimes a question about processing costs, because we are processing frame by every single second. It is more granular than competitors are processing, the way we're processing, the inventory, but there's a curve to the cost, right? As technology gets smarter and smarter, the cost comes down, which we're already seeing. Yeah. And again, we'll just continue to invest in innovation and continue to invest in launching a new segment before missing, to ensure that we're offering value to the brand. Look, I wanted to move on a little bit, like the other big area that is exciting at the moment, that you mentioned as well, with, with CTV. Talk us a little bit through where we are in the evolution. I mean, the, we thought of you, you know, looked at Microsoft helping Netflix initially, but then people happening. They're like, what are you seeing on that evolution of CTV as a potential opportunity for you? Yeah. So, there's so much opportunity with CTV. I'd say CTV is a long game. Yeah, yeah, yeah. With CTV, the way to think about it, premium inventory and programmatic inventory. Yeah. With the premium inventory, Netflix is the perfect example. We were one of three measurement providers selected at the launch of Netflix ad-supported tier. It takes time to get that up and running, both by getting the pricing right for Netflix, getting the consumer adoption right, and then getting the advertising engagement in place. Yeah. Once we launched viewability and invalid traffic detection in all of Netflix markets, we've been a great partner. Mm-hmm. We'll just continue to partner with them. The other thing that's very encouraging is that brands shared that that was one of their number one ask of Netflix, is that they launch with measurement verification provider. So that's just gonna take some time to ramp. In terms of programmatic, as you know, we acquired Publica, a leading CTV platform, over two years ago now, where we are working closely with other CTV platforms, like the Samsungs of the world, inclusive partnership with Samsung, where because of Publica and the integrations we have with Publica and Samsung, we're drive higher optimization and yield for the programmatic. We inventory through header bidding. Yeah. We are serving Samsung's ads. We are, we have active AI stitching, where we're stitching creative real time in the same, stream. But I also think more important, it gives us access to massive amounts of programmatic TV data. Mm. Very rich data that we're able to with the IAS data, and it help marketers just present greater transparency into where they're at running programmatic. That's the number one thing that they ask for. Yeah. All right, sorry. No, go ahead. No, and if you look at that CTV journey, and I'm speaking now as a consumer, it does feel like still in the early stages, because it's like compared to like the linear TV, like we still have, yeah, still feels like early stages, but we've- Early, yeah. Yeah. I can't emphasize enough, having worked at Amazon for six years, Netflix is right now getting that user price point right and getting the user adoption right- Yeah. That supported tier is really important. We got to get that window going, and then go to the advertising on top of it, and then the ripple effect. Yeah, yeah. Okay. 2 minutes, I want to shift gears a little bit. Like we are in the important part of the year for the advertisers, you know, with Black Friday, Cyber Monday, et cetera. Like, and, you know, you've talked through a lot of the advertisers and, you know, you, do you see it? I don't want you to guide now, and what are you seeing out there in the field in terms of like how this is playing out? Sure. So, from a macro perspective, in fourth quarter, from the brand, what we're hearing is, again, greater scrutiny on efficiency and ROI. Yeah. ROI is everything for the brand. That they get the best bang for their buck, greater transparency from where they're making their investment, pulling up to their budget. They might be shifting their budget a bit, both in terms of ensuring that the other consumer base, they're keeping them in the boat and keeping them engaged, placing their bets on the big platforms. And then the other thing I hear is less advertising to invest in the shiny objects, the unknown things, than doubling down in what you know- Yeah. And again, drive crazy profit wide. Yeah. Okay. And, Tania, like, if you think about it, the better revenue growth, better profitability. Like, can you talk a little bit about that balance between, like, the growth and the investment you're doing at the moment? Sure. We had a very good year in 2023, with EBITDA margin- Yeah higher every quarter of 2023 so far. Third quarter, EBITDA margin was 34%, up 400 basis points from third quarter 2022. There's two dynamics that's happening there. One, we are very... We're disciplined. We're focused on productivity and efficiency of the investments that we're making. Mm. But at the same time, we're reinvesting for the growth. This balance, balancing top line growth with, as you talked about, multiple opportunities for growth, large and expansive. We want the investment to drive that output one of those way other markets. The other thing that happened this year is we're investing in R&D, and we're doing it. We're investing in innovation, we're investing in our product development. Under GAAP, we can capitalize more of what R&D investments on uplifts from that in 2023. Now, we're at this higher level. Mm. In 2023, we expect to continue that under GAAP, but we don't expect to see a big margin shift this year. Yeah, yeah, yeah. No, fair enough. Yeah. Then the improvements that you saw this year, like, you know, since you joined as a CFO, were there, like, special- Yeah. It was just, like, a little bit, you know, more focused on prioritization or, like, how did you achieve this, those better numbers? Yeah, no, it's a focus of balancing growth and EBITDA margin. We're Rule 49 with our guidance this year, 15% at the midpoint- Mm. -and 34%, EBITDA margin. So we're really focused on making the investments to drive the top line, but also doing it in a disciplined way, to continue, top line growth without big shifts in margin. Yeah. And how do you, how do you guys prioritize? There's, there's growth market angle, and there's the product side, and on both sides, you can actually a fair amount. Like, if you think about it, like, how do you get that balance right? I would say that, I had mentioned this before, placing a few bets in the areas that drive tremendous value for our advertiser base, that are with the platforms that are global, with massive amounts of running as well. Yeah. Ensuring that we're investing in both in the near term and the long term. Yeah. And, what I did, I was like, on the mid-market tier segment was doing better. Like, what did you do there? Yeah, great question. Mid-market, we're in nice with the mid-tier segment. We define it as north of 100,000. We're seeing adoption both in optimization or programmatic offerings, Context Control. We're seeing adoption both in the U.S. and internationally in mid-market. Our investment in automation and programmatic specialties in particular are paying for mid-market. Yeah. We see a long runway with mid-market, both in programmatic, in retail media, and in the social platform. Like, last question from me, and I want to go. Like, where are our clients and advertisers? Where are they in their adoption for you guys? Because, like, you know, in a way, at the moment, the market comes with three players like you and the other one. But how did your clients listen and you think the people that could advertise, there seems to be still a lot of, you know, growth- There's a lot of runway. Yeah. I would say there is saturation with the top 100 Fortune 500 brands. Yeah. But when you get north of that top 100, there is a ton of runway, both us and in the landscape. Yeah. Then you guys can remind us. I think you were, you know, internationally, you already built out more- Yeah. -markets, correct? Yeah. International, the footprint is a big differentiator for IAS. We are representing 30% of our revenues, having deep footprint in both EMEA and APAC, to invest in emerging markets. We've seen really, really good growth both in markets like Latin America and Southeast Asia. Yeah. Perfect. Hey, I think our time's up, so- Great. Thank you. Thank you. Thank you. Thank you.