Hello, everyone. I'm Andrew Boone. I cover internet here at Citizens. I'm very happy to present a conversation with Bryan Leach, the CEO of Ibotta. Thank you for being here, and we'll kick it off. Thanks for having me. Ibotta's IPO is about a year old, right? For anyone new to the story, let's just start big picture. Where does Ibotta fit into the marketing ecosystem? Yeah, we have built the largest digital promotions network in the U.S. What we're doing is helping consumer packaged goods brands like Coke, Kellogg's, Unilever put the right offer in front of the right consumer at the right time to grow their market share in a profitable way. That is an evolution. We used to be an app, a cash-back app. We have 50 million people download that app. Now we power a large number of publisher sites like Walmart, Dollar General. We recently announced DoorDash, Instacart, and others that are all part of a single network. It is a single interface through which you can deliver a pay-per-performance ad unit. Instead of paying for a bundle of impressions, you're paying on a fee-per-sale basis as a brand. Your goal is to grow your market share and make sure you are doing that thoughtfully. Generalization here, right? Broad picture. Talk to me about the two or three objectives that a brand has when they work with Ibotta. Yeah, so I think the first thing that traditional kind of promotions and coupons have been about is driving short-term increases in sales by manipulating your price. Dating back over a century, that's always been a pretty reliable function of a promotion. What it hasn't attempted to do is be one of the most high ROI things you can do. Because if you put a bunch of newspaper coupons out there, chances are those are going to be used by people who are already pretty inclined to buy your product. It's not a very surgical way to drive an incremental purchase. What we're doing is raising the bar so that the ROI of that is actually really attractive compared to all your other alternatives. Because you can look at the given consumer's propensity to buy your product already and try to stretch them, whether they're 0 to 1 or 2.2 a quarter to 3.2 a quarter, try to stretch them to grow household penetration, to increase the number of net new households that you have. Particularly in this moment, to combat the encroachment of private label into your categories, for example, to make sure your assortment is as profitable as possible. There are sort of now opportunities to use principles of artificial intelligence to make that ROI even higher. It's like you still want to be what it originally was, which is drive sales, make sure you're supporting new product launches, curry favor with the people in your merchant environment that need that promotion to run in tandem with an end cap or in tandem with some other event they've got going on in the store. Then increasingly, how do we create a national network where this lever is seen as particularly high measurability and particularly high incrementality? Maybe a softer goal, right? Do you ever hear about digital shelf space, right? So everything you talked about was ROAS-based. Yeah. It's very incrementality-focused. What about the other side of that coin where it may be something that's a softer goal? Yeah, like I said, the original version is drive sales during key windows. Say you've got an Orange Creamsicle Coca-Cola launching. Product hasn't been tried by many people. How do you drive trial? Think of it like a mass version of sampling. You could give an attractive amount of cash back to get it in the hands of lots of American consumers. You can observe, do they buy it again without the need for a promotion? Do they not? What can you infer about the trajectory of that launch? It might be that you are a new brand, a new emerging brand that wants more distribution, more shelf facings, better shelf facings, higher up on the shelf, in the planogram, as it's called, the map of sort of where every product is in a store. Your goal might be to show your buyer, hey, this thing is really popular. The level of repeat usage is high. Repeat purchase is high. It's gaining traction. You should put us in another 500 store locations. Those kind of tactical considerations are also really important. OK. Let's transition a little bit more near term, right? You identified three issues in the last call: measurement, sales execution, and then just aligning with the CPG budget cycle. Let's start with measurement. What do you need to do to evolve your measurement tools as we think about 2025? I think we already have the best measurement tools in the promotions industry. That is not to be skipped past. We have, I think, clients that are very happy with those tools. We have 96% client retention. That is not our standard. Being the best promotions company is not our standard. Our standard is we want to transform the way every dollar of marketing is allocated in the CPG industry by making it more accountable, more measurable. What we have done is take the principle of a lift study where you are looking at two populations that are statistically otherwise identical, one of which is exposed to an ad or an offer, the other which is not, and then track the longitudinal purchases of both groups. The differences between their purchases are what we call incremental dollars. The fully loaded cost can be considered. The cost per incremental dollar or CPID can be considered against your margin. So if you have a product like this that maybe sells for $4 and has, let's say, a 35% margin, and we charge you a $0.25 CPID, that means that every incremental dollar you get from selling this product, you're making $0.35. And for that incremental dollar, you're paying a fully loaded $0.25, which means you are contribution margin positive on that transaction. In the same way that you would have Google ad campaigns that pay back almost immediately based on the value of that basket relative to the cost of the search term that you bid on, you wouldn't turn those off. Those are always on. What we're doing is creating a lift study that is actually accessible in near real time. Today, when a CPG brand gets a lift study, that's accessible in a snapshot. That's typically done every 6 to 12 months. The idea of having that in a daily dashboard is a major step forward because you can now make much more nimble decisions about allocating resources, turning on and turning off, adding budget, and pausing campaigns. You also have the ability to look at that daily signal and refine the strategy that you're using. That's the great opportunity to apply the same principles of machine learning that Facebook and Google and AppLovin and others apply for the first time to products sold in the physical world. That's what we're doing on the measurement side and why we think it's heralding a whole new era of revisiting the conventional wisdom of the ROI of promotions. Just talk to me about the timeline to be able to get to that real-time measurement. Before I die, hopefully. No, just kidding. We're far along the track. The good news is that CPID is something that we've got live. We piloted it last year with two major companies, and both have been very pleased with the results. Both are running now full-time live greenlit campaigns in which we're measuring that CPID on each of their campaigns. They're checking in on a sort of weekly cadence. What remains to be done is a few things. We want to automate that process so that we can predict a CPID without needing to kind of do a bunch of manual data crunching. We want to be able to configure the campaign parameters themselves, not just with manual targeting, but with machine learning-based targeting. We want to be able to streamline the process of basically the end-to-end quote-to-cash process to make it easier to do business with us by making it more programmatic. Imagine that you can log in, and you can book on our network and use a slider to determine the balance between efficiency and volume. Those are things over the course of this year, I think, we'll have completed all three of those things. OK. Let's transition a little bit to just the sales mission. You guys just hired a new CRO. How do you envision your go-to-market evolving with him? Chris Riedy, who was the head of global revenue for Twitter and worked there for 11 years, ran their EMEA business. More recently, he was a CRO at tv Scientific, a leader in the connected television space. Somebody who brings two things. I think he brings a level of operational experience that's stage-appropriate, where he's managed much, much larger teams of hundreds, close to 1,000 sellers and account managers, and understands the functions of sales enablement, sales operations at scale. I think we had some gaps there. Second thing is he's sold into C-level executives at CPG companies and large media agencies, where increasingly we think this plays. He has that gravitas and selling experience. I also think he brings a level of just strategic acumen that is always helpful as we are innovating and evolving, adapting, iterating. He’s sort of worked in a large company, but also in a small startup environment so he can roll with the pace of change and a much more disruptive innovation phase of our business. I’m excited. I think he’ll bring a new level of kind of executional excellence to our team. OK. All right. Let's kind of marry those two things together in that last phase that is kind of bringing CPG budgets and aligning them with kind of the cycle that you guys want to see. Is that real time, or what else do you guys need to offer in terms of being able to accomplish that? Yeah, I mean, first part of it is that in a two-sided market, you're always going to have supply and demand out of step somewhat. One's going to be catching up to the other. For the first eight years of Ibotta, we had not enough users, not enough redeemers for the taste of our brand partners. Gosh, we love this, but we need way, way, way more cowbell. Now we're in the other side, where it's like we have grown from 2 to 18 million redeemers, I think, faster than anybody thought we could. We've outkicked our coverage a little bit temporarily on how much supply we have in terms of offers. That naturally corrects as people get on cycle and they see the size of the opportunity. If you're using something and 96% of people are keeping using it, that's because they like it. If you give them more of that thing they like, they'll realize they can capitalize on it more. So, but Sometimes what they won't do is say, oh, you're projecting 30% growth this year in redeemers. Let me go ahead and earmark 30% for you this year. They'll say, next year I'll give you credit for that 30% growth. You are always chasing that until you're more flat. We don't want to be flat, right? We want to keep growing. You are always trying to sell out in front of the redeemer growth you have. Otherwise, you run low on offers by the end of the year. The bigger question is, how do we transcend this entire conversation of cycles? That is where this emphasis that we've got on CPID is exciting. Because if we can get to a place where this is just contribution margin positive, why would anybody ever turn it off? It's something you can log in, pause, add budget to, just the way you can The Trade Desk or AppLovin. Why not just do that? There is less episodic. It's not subject to the same kind of challenges of predictability, which, as we know, as a public company, growing, being profitable, those are both important. Also, being predictable is really important. We've had some challenges because of the inherent struggle of an annually allocated, annually measured thing. If you have a daily measured thing and a daily allocated thing, it's way easier to see that continuity in the future. I think part of it is to sort of transcend that limitation in our business. Could you augment the auction? Could you guys do anything on price on your end to be able to facilitate and kind of create that liquidity? Or is that really not something that you want to be able to put on the table? We haven't decided whether we want to have a full auction mechanism. At this point, that's not how our CPID pricing works. There is so much capacity on our network that's untapped. A given brand very often could spend more than 10x what they're spending right now, even without adding a single redeemer to our network. Most people don't realize that. Yes, we've got almost 18, I think over 18 million redeemers. With that audience alone, we could accommodate so much investment that we don't need to pit companies against each other in an auction mechanism. I misspoke on that. Oh, sorry. Point being is, could you guys do anything on price to be able to augment demand? Oh, I should. It's not an auction. Oh, I'm sorry. Yeah, I mean, at the end of the day, our price and the user award are part of one composite cost, which is factored into the cost per incremental dollar. If the cost per incremental dollar is upside down for some reason relative to a given brand, the first port of call would be to adjust the user awards and the thresholds of offers. Another lever could be what we charge. Ultimately, if it looked like by lowering our fee a small amount, we could increase the amount of velocity because the offers could commensurately be a little more attractive, there could be a world where that's actually net beneficial for us. We're learning how to strike that balance right now. We're only in our first two customers using this. I think that's on the table as we think about the evolution of where our price equilibrium ends up. What we found is that our clients mostly are like, yeah, yeah, yeah, what's my CPID? And how many incremental dollars can you deliver me at this CPID? That is the big question is, if you want, you can go to really low CPIDs. Then you're really constraining the efficacy because the volume isn't that high. With the clients we have right now, we're seeing really attractive volume at really attractive CPIDs. Ultimately, this will be a curve that each client will choose where they want to sit within. They're defining the shape of that curve right now. With more efficiency comes lower volume. With greater volume comes lower efficiency. Also, the time period through which you're trying to achieve that incremental dollar gain matters. If I try and get you $10 million incremental sales tomorrow, could, but the cost of that and the efficiency of that will be unattractive relative to if you gave me 30 days to work with. These are all variables that we're in the process of learning about. It's actually what I love about this job is that we're still defining completely new approaches to our industry. It's exciting. I don't think we're succumbing to innovators' dilemmas. That's causing us some short-term pain. I think the medium to long-term benefit of being bold enough to really redefine the industry and transcend it is going to be well worth it. Let's transition a little bit. I want to talk about two new partners, right? DoorDash and Instacart are different than Walmart in the fact that they can enable one-on-one targeting versus more of a mass approach. Talk to me about the potential there is certainly significant. Talk to me about how that could change the service and what you can offer CPGs within that new paradigm. Yeah, I mean, we're really excited about our partners at both those companies. Their ability as tech companies, as marketplaces, to put a differentiated offer at the right moment in front of consumers will help us achieve the most efficient form of promotion, which will ultimately mean they unlock as much promotional content as possible for their customers, which means that their service will be more affordable, which means they'll grow the addressable market that they're focused on. It is a win-win for everyone. These are younger. A lot of these are younger demographic, really important. Beer, Wine, and Spirits is a big vertical for both of them that we haven't really explored. We just launched that recently on Instacart, but we anticipate doing that on DoorDash. There are a lot of other retailers that are sort of within the marketplace, if you will. Indirectly, you're helping someone earn cash back at a store that isn't otherwise directly on our network. Those are all positives. I think the ability to upgrade the level of promotional capability that Instacart had when it built its own version before it transitioned it over to us is a popular feature. Targeting is one element of that. There was very limited capability of that before. We've brought that to the table. That's actually launching here shortly. It wasn't available in the first couple of quarters. It's an example of how these things have to gradually burn in. Not every capability is available on day one. When all those capabilities are rolled out, those will be among our most sophisticated publishers. If I get really excited about the opportunity, I can envision you guys utilizing AI to basically reduce consumer surplus from like an Econ 101 perspective. Is that not the right future dynamic if I think about five years out about how I want to utilize personalized offers? Yeah, at the end of the day, using an indiscriminate one-size-fits-all approach to adjusting price versus a personalized approach, a targeted approach, there's a win-win-win for everyone using a more tailored approach. Because the retailer can get more sales for a given bucket of promotional dollars. The brands can get more sales for a given bucket of promotional dollars. And consumers ultimately get the level of incentive they need to take that incremental purchase. If there were dollars needlessly subsidizing somebody whose action wouldn't have changed because of that subsidy, it could be repurposed towards somebody whose behavior now will change with that lower net price, you found a more societally pleasing, less deadweight loss solution. To think about this in economic terms is more Pareto optimal ecosystem. That benefits each of the parties involved. I know we're in the U.S. We do not apply principles of economics anymore to things like taxation and tariffs. We still think in the long run that microeconomic theory is important to attend to and that finding the right price for products is a valuable unlock. I'm just going to have you simplify that very quickly. Meaning that, yes, thinking about one-to-one dynamic pricing in the future is kind of the vision? I wouldn't call it one-to-one dynamic pricing. Dynamic pricing implies that the actual price of a product is changing or surging or. You guys can do that. We're talking about discounts and rewards that can be personalized. The price remains the same. It's not surging. It's not changing. It's the same for everybody who walks into the store or goes on the website. The reward, the cash-back reward, much like a different promo code that you and I might get or a different pack of Valpak coupons or Kroger coupons in the mail might be different, can be personalized. Those thresholds and values can be different. In effect, what you're doing is more intelligently deploying those promotional incentives based on what we know about each consumer. When you think about this in terms of just personalization, like just alerting someone to the 10 offers that are most likely to be of interest to them based on their last 10 purchases itself, regardless of the amount of the incentive, just drawing their attention. Because there might be 5,000 offers one day in the ecosystem, and which 50 matter for me are different than the 50 that matter for you. That is a related concept that is very important as well. Can we actually double-click on that? Sure. Because the UX ends up getting controlled by an Instacart or DoorDash. Just talk about that partnership. How do you guys work with them to be able to control that? Or how do I think about offers being able to control what is their search algorithm, more or less? Yeah, so many aspects of the personalization continue to be controlled by the publisher. For example, they control the search algorithm. When it comes to the customer ID dictating a certain offer be shown to them, we have a set of logic that we can pass through our API that allows them to then put the right offer in front of the right consumer. Our technology and our integration enables that capability. At the end of the day, it's seamless from the consumer's perspective. They don't know which portions are personalized through the CRM and lifecycle management tools that they use, HubSpot, Braze, whatever they use, and which ones are powered in effect by Ibotta. The expectation at this point is that all touch points are as personalized as possible. That's just the expectation of the American consumer. We want to make sure that our tools that relate to value delivery are keeping up with that same level of sophistication that a Braze, for example, might offer them. OK. I want to touch on competition. One of the multi-year drivers of digital advertising overall has been retail media. How do I think about that from a competitive standpoint with Ibotta? It's not competitive. It's highly complementary. The more retail media you invest in, the more you're going to want a direct response component to that ad unit. When you have sponsored search, you're going to want an offer that's going to really, really inflect your click-through rate, your buy-through rate. We're working with retail media teams. They're excited to bring on more of our content. We're excited to amplify our content and make sure that people find it more easily in these digital experiences by having sponsored search or display ads or what have you. The other thing is that our dollars are typically national dollars. They're coming from a separate budget that is not competing with retail media dollars. Those are typically retailer-dedicated dollars. Those are up to the retailer to decide, do I want those to go into price, into data licensing, into retail media, what have you? Ibotta comes along and says, we're delivering $0.25, $0.30 CPID across a national network. Any CEO of any major CPG company should be calling me right now going, did you say you can deliver $200 million of incremental sales to me at a cost of $50 million? I would like to buy that bundle of $200 million of incremental sales immediately. That is going to mean that I grow and I grow profitably because my margin is enough to cover that cost. I need that top line and that bottom line growth. That is a separate kind of engine of investment that's just rational, that, by the way, doesn't need to come out of anything because it stands alone as instantaneously paid back. Let's say you did have some bucket of money over here. You do you. If you're happy with the ROI of that, if this thing is giving you contribution margin positive all day, every day, you would never turn that off until that statement's not true. In fact, you would create an incremental budget on the fly specifically to do that. That's what we've already seen happen with these two clients that we're piloting or post-pilot, but pioneering this with. Yeah. You You talked earlier about the imbalance and the ebbs and flows of supply and demand. I wanted to ask about just merchant growth from here as we do think about that temporary imbalance that's in the system. How should we think about your ability to go out and acquire new merchants? Is that kind of on the back burner? Is there any change there? No. We've got a person whose job is to front-burner the heck out of that. He's an aggressive person. I love that about him. No, we've got tremendous momentum on the publisher side of our business. This did not come up much in the earnings call because it's not the biggest problem in our business. Really, the problem in our business is accelerating the supply of offers. The things that are good about our business, I mean, I think sitting at the IPO a year ago, how many folks thought we would be at 18-plus million redeemers with the kind of pipeline we have to add additional publishers? You may say, well, why would you want to do that when you're struggling with adequate offer supply? The answer is that the more and the more diverse the publisher network, the more attractive this becomes to CPG companies. You combine the efficiency and excitement of CPID and targeting with ever-growing scale, and it becomes unavoidably compelling. We are not going to slow down on that at all. In fact, I hope to have, over the course of this year, more news on that front. There is a lot of building momentum on that side of our business. OK, we're going to end with a Walmart question. Just help us understand the relationship today and what are the opportunities for Walmart to continue to grow over the next couple of years. Yeah, we're very, very pleased with Walmart. Their execution is world-class. We have been used by tens of millions of people within Walmart. That's driving digital engagement for Walmart. It's driving people who are identifying at checkout for Walmart, which is a backbone of Walmart Connect. It's helping them with their mission, which is to save money and live better. Ultimately, we're giving away hundreds of millions of dollars of manufacturer reward value through Walmart. Walmart is giving away as part of a larger umbrella program that's called Walmart Cash. Opportunities there are tremendous. I mean, one that I'll highlight in the interest of time is alcohol and beverage. Being able to support Beer, Wine, and Spirits offers is particularly valuable on Walmart because they have a cashback structure that will work in 41 states. Being able to streamline the process of using the Walmart Cash program is something they've done on their own. We provide input. That is a very good working relationship. What we want to do now is increase the number of redemptions per redeemer on Walmart. That is really helpful. People can take those earnings, and they can think about that as a way to invest in Walmart + membership and ultimately some of the financial services that Walmart aspires to continue to develop. It is strategically very aligned. We are working ever more closely with Walmart Connect and various parts of the organization. It has been one of the best collaborations in my career. That's great. Thank you so much for being here, Bryan. We appreciate the conversation. Thanks, Andrew. I appreciate you having me.