DoubleVerify Holdings Inc at BMO Capital Markets Digital Advertising Summit Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : So maybe gentlemen, we can just start with maybe a high level a bit of introduction on DoubleVerify and what you think the single most important thing that investors should know about how DoubleVerify adds value to the digital ad ecosystem?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Very helpful. And then just, again, to hope those who are a little bit newer to the story, and we'll bring them into to some of the industry trends that they might have heard have been hearing things at the Summit so far about privacy changes made by Google or Apple, and that's impact on ad tech companies and others as well. Can you explain what those type of changes are actually really an advantage for DoubleVerify?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : You mentioned the contextual targeting solution there at the moment, you also mentioned Authentic Attention. I want to get back to that and some of the things you talked about at the Investor Day more, but just this morning, you have news out about MRC accreditation of programmatic services and including your contextual targeting. Just tell us just a little bit more about that news that came out this morning and why it matters to your clients?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Yes. Somebody the other day put the MRC to be is that there -- basically, what they do is they make sure that you're doing what you say you're doing, right, that I think you put it there that your data products are put together, as you say, and not necessarily sort of passing judgment on any sort of metric or tool, but just like they're working -- that works the way they say it works. And as you said, that sort of stamp of approval has helped with a lot of folks. So I want to come back a little bit to the Investor Day, you mentioned Authentic Attention, which you announced and that builds on your Authentic Ad metric. Can you just talk a little bit about the importance of the original metric and how the new 1 builds upon?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Helpful. Another new news out of the Investor Day was the new partnership with Comscore, and you spent some time that I'd want you to revisit again why authenticity is important to bring to measurement more? So tell us a little bit about that and how a deal like this helps drive revenue growth for DoubleVerify more as well.

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Good. Very helpful. And as you said, sort of rippling a consistent sort of theme through all of your sort of product and news. So I want to move to area of significant growth across the ecosystem that's important for you as well, which is Connected TV. And it does feel like this is another area where DoubleVerify was a little earlier than the competition. What are some of your keys to continued success in CTV?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Excellent. No, it's true that set-top box data, you guys remember when it started getting integrated into Nielsen and everybody else's methodology, Comscore went on track and those that instant like, "Oh, we don't have a sample anymore. It's a repopulation isn't this wonderful? And then debt realization and a lot of that Big Data that comes through isn't always exactly what you think it is. And I see it when I turn on our TV and YouTube with my 9-year-old clips -- son's clips are still running in background. They've been there since going through the afternoon when I turn on the hockey game at night. So it's a real problem. So switching gears, another big ecosystem and where I want to maybe talk a little bit about your M&A as well is OpenSlate was a recent acquisition, and they bring with you deeper integration, bringing deeper integrations with the social media platform. So maybe talk to us a little bit more about OpenSlate, what it brought you that you didn't have before?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Excellent. And that will help, as you said it we do get this oftentimes digital ad world framed into that sort of open web where ad tech tools live and then there's the walled gardens and of course, for you guys part of the reason that we like the space is you work across them and -- but solutions are a little bit different in these cases. So I want to stay on the topic of social media and in particular, Meta. I recognize that this is something you guys are fairly limited in speaking about. But for those who are new to the DoubleVerify story you should be aware that it was announced last November, November 18, precisely in a blog post that the artist formerly known as Facebook or Meta will be doing an RFP for your types of services. In fact, I'm going to read it, right, here for everybody so they know it is that this was in November of last year, where Facebook said before the end of the year, we also plan to collaborate with third-party brand safety partners to develop a solution to verify whether content adjacent to an ad in News Feed aligns with the brand suitability preferences, we will start a request for proposal in the coming weeks. We will share our progress working with the industry on these initiatives, as they develop. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2022 / 3:00PM, DV.N - DoubleVerify Holdings Inc at BMO Capital Markets Digital Advertising Summit So I just -- I want to make sure everybody is aware of that going on in the background. I know you guys will not comment on that type of situation. But maybe, Mark, just tell us a little bit first on how you do work with Meta today?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : You don't talk about the .

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : We are -- in our initiation report put a little -- hung some numbers on that opportunity and maybe a little bit more of a bearish investor trying to say, well, but that will have revenues going to start shrinking soon. I'm like -- it's still almost 20% of global ad spend no matter what it's doing. And so we'll look for further news from them on that front. I want to switch to one of the last growth drivers that you focused on a lot, which is international. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2022 / 3:00PM, DV.N - DoubleVerify Holdings Inc at BMO Capital Markets Digital Advertising Summit And this is one where you've highlighted, Mark, that you feel like you're lagging your peers in this area. So tell us, you made some acquisitions this year as well, but what are your -- the key thrusts for you, key focus for you and Nicola to help drive that international business [product] you're in and catch us up on some of your actions lately?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : I mean you touched on telco. Telco is always a regional business that it's never global. So it's a great example of why those -- just those extra boots on the ground and building some of those local relationships with some still pretty scaled players matters. So I want to come back to a couple of things from the Investor Day and maybe I'll pull Nicola back on this one because it was a topic that you spent some time on in the presentation, which was about how DoubleVerify generally charges a flat fee across all your services and then generally builds revenue through volume growth. But you did mention the potential to look at more dynamic variable pricing in the future. What are the type of factors that would lead the company to reexamine that? And I would love to hear you expand on that a little bit more.

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : I'm glad you made that clarification about take rate, right? I am revenue model nerd as you guys probably know by now, and that's a very important thing to distinguish in it because I've been -- and the other thing is the, you don't just get to like go to variable pricing and just take it from clients like you -- there needs to be an incremental value delivered with these sort of things. And so -- the way I think about it mentally in a model is this sort of thing were to play out eventually that there's some R&D and product development that sits behind it first. And so I'm glad you made that point. This is just sort of a free gravy sitting over there at some point. So -- let's see, we are coming up on time. I want to make sure we touch on a couple more things before we run. You mentioned the largely -- Mark you said, mostly working with big global advertisers today, part of the international strategy takes you down to those large regional advertisers that are big, but just the nature of the business is not as global necessarily. Talk to us a little bit more about the potential long-term opportunity going down into mid small businesses. Certainly, if that feed opportunity ever played out with that scenario where a lot of small businesses are. But thinking broadly, it almost certainly doesn't make sense for you to take your services all the way down to the tens of millions of advertisers and some of the platforms have, there's a size of advertisers that just -- for better or for worse, just doesn't care about these sort of things. But -- what's in between Mondelez and that TruDirect response player that is just doing an e-commerce business out of the garage necessarily. And what do you think that opportunity can be for the company over the long term?

Question: Daniel Salmon - BMO Capital Markets Equity Research - Analyst : Yes. No, that's an important point, right, Nicola. With all good software businesses, there is a base asset often just scaling up to new groups, new use cases. And like you said, it's sort of an opportunity that feels significant, but 1 that makes sense to be pull towards as you move into certain REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2022 / 3:00PM, DV.N - DoubleVerify Holdings Inc at BMO Capital Markets Digital Advertising Summit surfaces where that group of advertisers is more significant. And like I said, I said, for better or for worse, there's a size of advertisers even if you simplify some of these things right down and maybe we're back to talking about why fraud prevention is needed the whole time, right? It's an advertiser necessarily that doesn't really care about these things. Sometimes it's ones that you're feeding out in fraud in the first place anyway. So -- so listen guys, this is fantastic. Once again, I appreciate you slipping us in a very busy time between the Investor Day and the earnings, and we appreciate you coming and spend some time with us. And we hope to do it again soon. And we're looking forward to hearing more about what's coming from DoubleVerify and '22 to come. So thank you. .