DoubleVerify at Needham Conference: Expanding Into Walled Gardens

On Tuesday, 13 May 2025, DoubleVerify Holdings Inc. (NYSE:DV) presented at the 20th Annual Needham Technology, Media & Consumer Conference. The company outlined its strategic shift from media quality verification to performance-based solutions, emphasizing its expansion into walled gardens like TikTok and Meta. CEO Mark Zagorski and CFO Nikola Elias addressed both opportunities and challenges, highlighting product bundling and cost efficiencies as key growth drivers.

Key Takeaways

• DoubleVerify is transitioning from media quality verification to performance-based solutions.
• The company is expanding into walled gardens such as TikTok and Meta.
• Product bundling with SciBids and RockerBox aims to enhance quality and cost efficiency.
• The introduction of a quality score product for CTV is planned for 2025.
• Mergers and acquisitions are used to accelerate growth and enhance core objectives.

Financial Results

• Top customers spending over $200,000 grew by 14% in Q1, indicating increased adoption.
• SciBids, acquired by DoubleVerify, has been sold to 200 customers, showcasing successful upselling.
• The company’s gross margin exceeds 80% due to its unified content intelligence tool.
• SciBids offers $4 of savings in media cost for every $1 spent.
• Acquisitions were funded with cash, avoiding debt or earn outs.

Operational Updates

• DoubleVerify is replicating its open web success in walled gardens like TikTok and Meta.
• The company is focusing on product stacking, integrating SciBids and RockerBox with existing services.
• Relationships with Microsoft, Criteo, Index Exchange, and Google support sell-side curation.
• 25% of customer service requests are managed by GenAI, with 20-30% of code created through AI tools.
• New quality score product for CTV is expected in 2025.

Future Outlook

• DoubleVerify plans to launch a quality score product for CTV in 2025 for granular evaluation.
• The company aims to bundle media quality with SciBids to offer quality at a lower price.
• RockerBox will be integrated with SciBids to optimize performance based on attribution metrics.
• Expansion outside the US will leverage global brands and local partnerships.

Q&A Highlights

• DoubleVerify is indifferent to whether data is attached to an SSP or DSP.
• Revenue is driven by volume and product stacking, not individual product cost.
• M&A is used to accelerate the roadmap and acquire complementary tools.
• The move to performance aims to close the loop from verification to outcomes.
• The company’s competitive advantage includes scale, unique data, and platform agnosticism.

For further details, readers are encouraged to refer to the full transcript below.

Full transcript - 20th Annual Needham Technology, Media & Consumer Conference:

Laura Martin, Senior Media and Internet Analyst, Needham and Company: We’re gonna do data now. I can’t

Mark Zagorski, CEO, DoubleVerify: wait. Awesome.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: A little a little pivot. Okay. Great. So, I’m Laura Martin, and I’m the senior media and Internet analyst, over here at Needham and Company. And I’m here on stage with the CEO and the CFO of Double Verify, Mark Zagorski and Nikola Elias.

And, miss Zagorski, I’ve spelled your name, like, five times in the last week, and I keep selling, like, the crystals. And I’m like, no. He’s not a crystal. No. He’s not a jewel.

I wish you were

Mark Zagorski, CEO, DoubleVerify: a jewel. I used to get, you know, the helicopter people. That one falls in there too. I’ll take helicopters or jewels. Those are much easier than ad tech these days.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: So true. So true. Good point. But anyway, had to laugh. I’m like, oh my god, You think I would have learned this after all these years?

Okay. So let’s level set. Let’s start with our first question should be, let’s explain what Double Verify does and what your primary drivers of growth you do what it does. What are the primary growth drivers over the next, you know, ’25 and ’26? Let’s keep it sort of short.

Mark Zagorski, CEO, DoubleVerify: Yeah. So DoubleVerify is a is an ad tech platform that ensures that ad spend is between a buyer and seller. Those ads are viewable, that they’re fraud free, that the ads are delivered in context that is suitable for that advertiser, and they’re in the right geography. That was the core of our business and where we started. We’ve now expanded beyond media quality into optimizing the cost of that quality through our SciBids AI tool, and recently, acquired a company called RockerBox, which now shows if that quality or that ad impression actually works, so does attribution.

So think of everything from media quality to price compression for that media quality to determining whether or not that quality moved the needle. We are a complete independent platform for advertisers.

Nikola Elias, CFO, DoubleVerify: And the growth driver for ’25 and ’26 and ’27 is going to be to replicate what we’ve done in the open web for the walled gardens. Our solution works across the entire digital ecosystem. We now have access to, the walled gardens in a way that we can replicate the success we’ve had in the open web on the walled gardens.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. And let’s just talk to products specifically. So you had you started with a post bid product where you’d measure after the fact, like, almost like a measurement Nielsen kind of idea. Here’s what happened after the fact. Then you very cleverly invite you, introduced a pre bid product, and most cleverly, you’d said you couldn’t buy the prebid product without the post bid product.

So you bundled the two together, which took the you they get paid as a flat fee, like, 8¢ per thousand. But by bundling the pre, which I think was 14¢, it turned it into a 22¢ ad unit. So now you have pre tied to post and you were doing that in the open web Yes. And now you’re doing it with the walled gardens. And specifically, I think the importance of the walled gardens is they’re huge, specifically TikTok and Facebook because you’re already doing it with YouTube before.

Right?

Nikola Elias, CFO, DoubleVerify: We were.

Mark Zagorski, CEO, DoubleVerify: So that

Laura Martin, Senior Media and Internet Analyst, Needham and Company: isn’t new. But what sort of new is the Facebook let’s call it meta because it’s not just Facebook dot The meta and the TikTok are like what’s new when you say replicate Great. Fantastic. So one of the things, Mark, I wanted to talk about is you guys have seen some of the biggest margin not margin, valuation multiple compression.

And you’re down at 2,000,000,000. You used to be a $6,000,000,000 company. So what tell me what you think that the market is missing about Double Verify that it’s getting wrong, that it’s under it’s under appreciating about Double Verify today.

Mark Zagorski, CEO, DoubleVerify: Yeah. You know, during that period, you know, the the fundamental value proposition of what we deliver to our customers hasn’t changed. Right? So, we ensure that their spend is protected Yeah. And we are increasingly helping them perform and ensure that it performs.

I think what the the street is missing is a couple of things. Number one, what Nicole just mentioned, which is the opportunity in social for us is great and broad. We are not just an open web company. Now, you know, a good part of our our growth in the past has been in our activation line and things like ABS.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: They don’t know what that means.

Mark Zagorski, CEO, DoubleVerify: Authentic brand suitability, which is a tool that actually, creates custom filters for advertisers when they’re buying on The Trade Desk or they’re buying on Google d v three sixty sixty, but buying open web inventory. That same model is now being transported into the social universe, which arguably attracts 70% of ad spend right now. So number one, we’re not just an open web company. We’re increasingly a social media, evaluator company. Number two, the fact that, although we started our core value proposition was in protection, was insurance, making sure your ads don’t show up next to bad stuff, making sure they’re viewable or not fraudulent.

We’re increasingly being seen as a performance business. So can we help the ad spend drive a result? And can we do that cheaper than anybody else? SciBids is helping us compress the cost of quality. RockerBox is a new solution that we have that will help attribute that quality.

So I think, they’re missing that aspect of the business as well as as we kind of evolve over time. And the third is just going back to the fact that this is a highly profitable business that still has strong growth, that is underpenetrated in most markets, particularly outside The US. So we’ve got growth levers, not just new products. We’ve got new markets that we’re expanding into. We’ve got new platforms, like we just mentioned TikTok and and Meta, which are still in early days.

And if even if you look at our q one growth, it came from not just new customers, but core customers expanding with us on new products too. So we’ve got probably more growth drivers and more growth levers than anybody in this space right now.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. What do you say, Nicole?

Nikola Elias, CFO, DoubleVerify: I think the in addition to all of that, if you compare us to other players in the market, we have been gaining share in our strategy around m and a and being able to diversify our product offering and the fact that we’re not just, as Mark said, verification, but we’re all the way to performance now just sets us up for a much greater expansion of what we can do for our clients in a way that others cannot in the industry. So I I think when people start to see the results of that, they’ll understand the the potential.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. One of the subjects that has surprised me on this stage today is we have been really spending a lot of time on curation.

Mark Zagorski, CEO, DoubleVerify: Mhmm.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Right? Which you guys know immediately what that means, but it’s a new it’s a new word for the audience. Right? And that’s just moving data from the DSP sort of to the SSO. I would shorthand it.

How do you is that good for you or bad for you? Are you indifferent because you were getting paid by Trade Desk anyway and now you’re just going to get paid by Magnite and your fees aren’t any different so you don’t care?

Mark Zagorski, CEO, DoubleVerify: Yeah. I mean, you know, our thesis has always been let’s get our data wherever and however advertisers buy. Right? And as you noted, initially everyone was buying and applying our data through Trade Desk or through DD three sixty or through Microsoft. And that’s great if that’s how they buy.

Now they’re increasingly saying, hey, let’s attach data to the sell side. We don’t we’re indifferent. Right? So we announced, you know, last quarter that we’re working with Microsoft and Criteo and Index Exchange and Google all on sell side curation. We’ll we will

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Not yet.

Mark Zagorski, CEO, DoubleVerify: We will talk about that at some point. But we’re we’re deeply embedded on both the buy and sell side. We’ve had relationships with all of them across many different solutions. So I think curation is just another way of buying, which I think the big question around curation is gonna be, are advertisers comfortable and willing to change the way they buy? Right?

I think, you know, you have to change an entire workflow in some cases if you’re going to take the DSP out of the equation, if I’m just going use Clearline and buy directly on Magnite. And I think at some point, if the cost savings are great enough, they will. But for us, again, we’re such a small part of that transaction fee. You know, on average, it’s like 1%, two %. Mhmm.

And, you know, you’re looking at other players that are taking ten, twelve, 15 percent

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Data.

Mark Zagorski, CEO, DoubleVerify: Fees, not, you know, transaction fees. Right? So DSP fees can be as high as 15 plus percent and SSP fees are higher than our

Laura Martin, Senior Media and Internet Analyst, Needham and Company: statement that other so one of the things somebody on my stage, and I’m already losing track, I’m sorry, said said this morning was that a lot of times platform fees on the DSP are only 8%. But the average gets up to 20, and that’s all layering all the data. You know, at 12% each, it’s easy to get to 16% or 12% data fees on top of the 8%. So you’re saying what I heard you say, Mark, is that you price your product the same whether it’s attached to an SSP or a DSP so you really are indifferent. You’re not pricing it higher at the SSP.

You’re just tracing it the same. So you’re indifferent, you don’t make more money, don’t make less, or if somebody wants to buy the data, you’ll let them

Mark Zagorski, CEO, DoubleVerify: buy it There’s one difference in the fact that the DSPs take 20% from us and the SSPs don’t.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: But that is a difference.

Mark Zagorski, CEO, DoubleVerify: It’s big it’s a big difference for us. It doesn’t matter to the buyer, but it matters to us.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Right. So to me, that isn’t priced the same. Then you’re not indifferent. You’d rather have it attached to the SSPs because you’re taking it out.

Mark Zagorski, CEO, DoubleVerify: At this stage, yeah. But the scale of the SSPs on curation is very, very small right now.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Because it’s new. It started in January. Yeah. Like, it’s a brand new thing.

Mark Zagorski, CEO, DoubleVerify: Yeah.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. But so wouldn’t make you incent you to raise your price on the DSP data so you can cover your 20% fee that you’re not having to pay on the SSP side?

Mark Zagorski, CEO, DoubleVerify: You know, at this point I’ll

Laura Martin, Senior Media and Internet Analyst, Needham and Company: kill you if you cut your price mark. Seriously.

Mark Zagorski, CEO, DoubleVerify: We’re not cutting any prices. No. We we look. Our our driver here is to keep friction low and make buying really easy. So, you know, driving prices up or down is not part of our our goal right here.

That’s another thing that that is important to understand about DV is that we drive revenue through volume and through product stacking. So it’s not about the individual cost of a product. We want people to use attention with us and context with us and ABS with us and do measurement and pre bid. So it’s every that impression, we wanna stack as many products as possible on top of it from a data perspective. The individual cost of each of one of those products is less important than us selling through more products over time.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. So one of the things that, you know, you and I talk about a lot, Mark, besides price, which I know I just give you a really hard time on, is this issue of are you inventing the products or others? So you’ve just said that a big pivot of yours is moving towards performance, but you bought that, Right? And outcomes. That was RockerBox.

And then with SciBids being more efficient, like you’re pivoting from where DV started to where it’s going, you’ve had to buy both of those products. Tell me why tell me buy versus build. Is it just that you saw something coming, they had already been working on it, they had decided three years earlier so they’ve been building it and it was just going to take you too long to build, so it was cheaper to buy them?

Mark Zagorski, CEO, DoubleVerify: You know, look, we started talking about performance well before RockerBox or or SciBits was even on our radar screen. We’ve always looked at ABS and some of our pre bid tools as performance tools. When you pull garbage out of the system, what’s left performs better, right? So we’ve leaned heavily into that. We started playing around with looking at bidding algos and we found, hey, we can either build out a data science team of ourselves or we can buy this great team that’s in France right now and integrate it really quickly.

Same thing with RockerBox, which is if we want to look at closing the loop, we can start building that competency, or we can do find a bunch of great technology folks who’ve been doing this for the last six to eight years and put it into our strategy. So I think, you know, we’ve had this thesis around acquisitions, which is either they expand geographic footprint, we are able to move into a market quickly, eliminate the competitor there, and, like, kind of put our platform in. It accelerates our roadmap, something that we’re going to build, or is a complementary tool set that we don’t have a ton of, like, innate knowledge on. Mhmm. I think RockerBox is one of those things that is totally complementary.

Understanding media, you know, media mix modeling, multi touch attribution, we don’t have that DNA in our business. However, it’s an extension of what we’re doing today, and it made total sense to acquire that business. The common link between all of these are that they’re generally under scaled because they haven’t invested in sales. Yep. They don’t have access to big customers, but they’ve got really good tech teams.

So if you look at the last couple acquisitions, like, we’ve had very low turnover Mhmm. Because we’ve kept those teams together. We’ve actually grown the resources around them, and they’ve given us a core base. It’s kinda just they’ve almost been acqui hires because the revenue from them has not been big.

Nikola Elias, CFO, DoubleVerify: And they’re

Mark Zagorski, CEO, DoubleVerify: not big acquisitions.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: It’s tiny for you guys.

Nikola Elias, CFO, DoubleVerify: Right. They’re all done they’re all done with cash. We don’t have debt. They also already had right. No earn outs.

And they also already had a product in the market and the integrations with the DSPs or the other partners

Laura Martin, Senior Media and Internet Analyst, Needham and Company: call it track record.

Nikola Elias, CFO, DoubleVerify: Which is important. Right?

Mark Zagorski, CEO, DoubleVerify: And actually to go faster. SciBiz is a great example. I mean, we’ve now sold them to 200 customers already, upsold them since we acquired them almost two years ago that they would never have had access to. Right? Because but now they have, you know, some of the biggest brands out there, everyone from Diageo to, you know, to, you know, global brands that we talk to every day, right, that they would not be able to get into those customers.

Same thing with RockerBox, very small company, had two salespeople. Now they have access to a 50 salespeople. Right? And, you know, that’s the value of bringing these assets in. RockerBox?

New York.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Oh, okay. What I was gonna say is I cover a lot of companies that aren’t based here. And I think it’s so funny because outside America, people are like, if I build great tech, they will come. Like, that’s not a thing.

Mark Zagorski, CEO, DoubleVerify: Yeah.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Like, if you build great sales, they may come and maybe the tech can be secondary. That’s right.

Mark Zagorski, CEO, DoubleVerify: But I

Laura Martin, Senior Media and Internet Analyst, Needham and Company: think it’s a great, like, it’s a great arbitrage. You guys have great sales and great relationships. That’s great. That actually matters in media a lot. Yeah.

And great tech you can buy. I mean, it’s better to buy them and put their awesome tech to somewhere we’ll actually have impact. It is really a win for everybody.

Mark Zagorski, CEO, DoubleVerify: Look, we’ve never met a CMO who goes, wow, I wish we’d have three more companies calling on us. Right? They don’t want that. They want one company to call them that can provide them multiple solutions. Right?

They want someone to come in with a complete platform to say, great. So you can tell me what’s good, you can get me what’s good cheaper, and you can tell me if what’s good worked. Awesome. I don’t need to talk to anybody else today.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Now when you think about the SciBids and RockerBox products, and you just said stacking is a key, like, important thing to you, do you stack those on top? Are they stack are they stacked products from your point of view, or are they somehow open new TAM, which isn’t really a stack?

Mark Zagorski, CEO, DoubleVerify: There’s a little bit of both. So they so from a go to market perspective, we’re starting to now bundle them more. Right? So so I’ll I’ll give a good a good example. We were we were pitching an RFP, last year.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Request for proposal.

Mark Zagorski, CEO, DoubleVerify: Alright. Request for proposal. Every acronym, I’ll try to define.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: By the we don’t have that in ad tech other than you. So it’s not like a thing they should necessarily know what it are.

Mark Zagorski, CEO, DoubleVerify: Okay. Well, more software. It’s more software like. Right?

Laura Martin, Senior Media and Internet Analyst, Needham and Company: That’s fair.

Mark Zagorski, CEO, DoubleVerify: So we’re we’re pitching that for a large global CPG customer, and they’ve been a a verification customer for us for years. You know, quite large, but they’re like, hey. We wanna we wanna put you out there and see how you go against everybody else. And the old way we did it was we do these head to heads. Right?

Put our platform against the competitor’s platform, see who filters out more fraud, do all that stuff. Well, that was part of it, and we knew we were gonna win that. But then we brought SciBids in and said, guess what? If you bundle these two together, we will guarantee that you’re gonna save as much enough money by using SciBids that you’ll actually pay for our measurement solution. Because every $1 that you push through SciBids, we save you $4 in media cost.

Right? So now we’re bringing two solutions together to an advertiser and saying, no one else has these two together. So if you’re buying verification from somebody else, you’re gonna have to buy optimization and algo optimization from another party. We’ll bring them together and show you that we’ll save you enough money to pay for this other solution. Right.

For In a sense. They’re paying for it. Paying

Nikola Elias, CFO, DoubleVerify: for

Mark Zagorski, CEO, DoubleVerify: But I mean, they’re paying for it. They’re paying for both, but we’re saving them enough money. And I think that’s where the value prop comes from, like stacking solutions. Right? We’re selling you one thing.

Now we’re selling you another thing. And now we can go in and say, we’re going to sell you RockerBox too. And that’s now one core value prop that’s integrated, sold together. And if you look at the average spend for our our top customers, so customers spending over $200,000 with us grow 14%, in q one In the last in the last quarter. So our customers are spending more with us, right, on average.

And it’s not just because they’re buying more media, it’s because they’re buying more products for us.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. So one of the reasons I like CyBid so much was because they got played as a percent of pro platform revenue, not as a fixed fee, which I despise, as you know, as a fee structure. Anyway, moving on. My question is, have you kept that business model? And given that you just said just now that 200 brands that they never would have had access to have adopted, were all of those brands paying for SciBids based on its percent of ad revenue that they ad spending that goes through SciBids?

Mark Zagorski, CEO, DoubleVerify: Yes and yes. Okay. They’re a percent.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: That’s answer I wanted to hear. Okay. I’m happy that’s the answer. That’s totally great. Okay.

So in pricing power, one of the things I always ask you on any opportunity, Mark, is your prices remain the same when you move from I’m gonna call it DV plus but that’s the magnet product. When you move from the open Internet product to connected television, even though the cost per thousand that you were adding value to went up 10 x.

Nikola Elias, CFO, DoubleVerify: Right.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Right? $20 CPMs when you started. No longer because we have more supply now. But at the beginning, it was $20 CPMs versus $2 CPMs. You charge that same, let’s call it, 20% rate per thousand.

And I was I objected. And you’ve said for a long time, you know, we know we’re adding more value to CTV. We need to raise price. Tell me where you are. I get that you agree with me.

When are we actually gonna see price raised on the CTV piece?

Mark Zagorski, CEO, DoubleVerify: So we’ve been talking about price increases on CTV for a while. I think we are right on the verge of actually providing a much different value prop than we have to date. We still you look, CTV measurements still has a lot to do with finding, finding, non viewable impressions. So we found almost 8% of apps that we were measuring were not sending a signal that the TV screen was off, which is crazy. You know, there’s still issues with CTV fraud.

You know, those things are still incredibly valuable. But what advertisers really want and what they pay for as we started the discussion around kind of brand suitability is can you give me a media quality score? Can you actually tell me something? And we are on the verge of actually kind of introducing that solution set, which has a quality aspect to it, same way we do on the open web, the same way we do with social, to do it in a much more granular way for CTV. When we get that product to market, we believe that’s the opportunity for us to actually get a price commensurate with the value that we’re delivering on CTV.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: But it sounds like you would’ve the old product would stay at the same price and you get the price increase by, I’m gonna say, stacking this new product onto it.

Mark Zagorski, CEO, DoubleVerify: Yes. Okay.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: I I don’t object. You know? Because that’s what you did with Prebid when I was yelling at you at the time when you only had one product. And we’re like, when do we get a price increase? You’re like, we’re just gonna introduce this new price and bundle it with the old, which tripled the price point.

So in a way, was better than what I was asking. So I totally this is totally a fine way to raise. Look. You’re basically saying everybody has to be a customer first at this 8¢ per thousand, but then we’re gonna add stuff. That gets you the call.

That takes the meeting. Right? Because you already have a relationship with them. Mhmm. But then we’re gonna upsell something that we know.

And a score would be so would a quality score for Coke then be a different quality score for, like, diapers? Is the quality score related to what the ad pod is?

Mark Zagorski, CEO, DoubleVerify: It could be because think of brand suitability for every brand is different.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: That’s what I was thinking.

Mark Zagorski, CEO, DoubleVerify: Right? So it’s a suitability or brand quality score based on what their preferences are and based on the granularity of data we can get from the content providers.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. Okay, so like a brand suitability score wouldn’t be a, like Hulu has all these super high quality units, that still might not be the brand safe, that might not be the same brand suitability score for diapers versus GEICO versus Coca Cola. It would be unique to the advertisers. Does it scale?

Mark Zagorski, CEO, DoubleVerify: Absolutely. Because it scales in ABS today. Every customer has different ABS profile. So think of the other aspects too of CTV. Things like screen resolution.

Right? Things like what screen was it actually seen on? How big was that screen? Mhmm. Was it fully delivered?

But also, the things that a lot of people don’t talk about, which is, was this really on the network or was it an extension?

Laura Martin, Senior Media and Internet Analyst, Needham and Company: What’s happening?

Mark Zagorski, CEO, DoubleVerify: So a lot of CTV inventories sold in bundles or in PMPs. Right? Private marketplace packages. Those private marketplace packages can include the publisher entity that you know and love Mhmm. Paramount plus.

Paramount plus, but it also could include impressions on other places that are part of the Like the fastest plus the Paramount plus network. Okay. There’s the same way retail media networks use extension. CTV does extension too. Is this

Laura Martin, Senior Media and Internet Analyst, Needham and Company: would be really helpful then.

Mark Zagorski, CEO, DoubleVerify: This provides much greater transparency.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Yes. And you guys have access to this data?

Mark Zagorski, CEO, DoubleVerify: We are we are slowly building relationships to give us that access. Yes.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: So this that would be a really that is really valuable. Yep. Especially to the extent they use extensions and they’re putting it on a fast channel. Yeah. Very interesting.

Okay. And the timing of this product rollout would be ’25?

Mark Zagorski, CEO, DoubleVerify: It’ll be at some point in ’25.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. Alright. So this would be I think this would be very exciting mostly because of the pricing implications, but just to have the notion of a product that does quality scoring for CTV is really interesting. Yep. Because basically that becomes best in class and everybody else has to keep up with that.

Absolutely. And it would make better behavior of the CTV ecosystem, it seems to me.

Mark Zagorski, CEO, DoubleVerify: Absolutely.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. Let’s talk about acquisitions. So to both of you, question. Do you guys require acquired SciBids, and that was just to tell you guys that was in the third quarter of twenty three, which for a hundred and 25,000,000, RockerBox for 85,000,000. So again, tiny little acquisitions Mhmm.

But hugely beneficial from a bundling pricing, let me call it product offering point of view in terms of when your salesman goes in, you want them to have it’s almost like a ride at Disneyland. You want them to be able to talk about something new. So they took the meeting for a reason and not just we want a price increase on what we showed you last So I totally get that one a year is is makes a lot of sense. Going forward, it sounds like you’re building the connected television product that allows you to raise price. What other kinds of things can you see building that would make this this stacking idea more valuable?

Mark Zagorski, CEO, DoubleVerify: So I’ll I’ll I’ll just so I think from the from just to be clear, m and a is not a strategy. Right? We have a strategy, and that strategy is to evolve from protection to performance and ensure that we close that whole loop. And if m and a fits into that, great. You know, our main driver right now is to take these assets, so these raw materials, and look at ways of bringing them together to create unique value.

Yep. So can we bring media quality plus side bids together to create a unique value prop for advertisers, which gives you quality at a lower price. Right? Can we bring RockerBox together with SciBids that allows you to take what’s working and optimize against a side, an attribution performance metric that sits within RockerBox. We’ve done that.

We’ve done that with, you know, with clients, before we even started buying these companies. So I think that’s the one thing to know. All of the acquisitions that we’ve made over the last two years are companies that we’ve worked with. We’ve worked with before we bought them. We built solutions together, because we saw that there was a path towards where we wanted to get to.

We didn’t say, oh, well, let’s buy this company to get into Let’s buy this company in this space. We’re like, we’re going into this space. Let’s start working with them. And if it makes sense for us to buy them, let’s buy them.

Yep. You wanna add on?

Nikola Elias, CFO, DoubleVerify: No. And I would say the you were at the question was what are we gonna be innovating on? I think creating the the the full picture of verification, performance and outcomes is really what we’re focused on, right? There are two prongs out of the three there that we’re the only ones that have in the space for what we do and we did acquire the technology and the integration, so that’s what we’re really focused on in terms of how much more differentiated our product is.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. Well, I’m a big believer in bundling. Bundling says it lowers churn by 50%. So the bigger your bundle gets, the less likely you are, at least from a consumer point of view, I assume it also applies I’ve only done the research on consumers.

Mark Zagorski, CEO, DoubleVerify: And I think the bundle here too isn’t just a sales bundle, it’s tech bundle. It is actually a seamless solution. So one UI, one data set that can move seamlessly from verification to optimization to actually attribution, like those things are important. That takes a lot of work. Right?

And we’re still in the early stages.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: If something doesn’t work, there’s somebody to call and say fix

Nikola Elias, CFO, DoubleVerify: this. Exactly.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: And it scales. Right? That’s another

Mark Zagorski, CEO, DoubleVerify: That’s that’s the key.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: I would assume this kind of thing is a faster growth driver than going offshore. Wouldn’t it be? I mean, don’t you have enough growth in America that you don’t have to go offshore where they might want different things?

Mark Zagorski, CEO, DoubleVerify: I mean, look, some of these

Nikola Elias, CFO, DoubleVerify: products so specifically about Rockabox. Rockabox is is a product is an acquisition that actually expands the dollars that we can go after. Brand brand marketing, brand advertising is really what verification is about. Rocket Box is performance dollars and performance marketing, which for us expands our funnel down towards smaller advertisers, more Doctor focused advertisers and small advertisers outside of The US is a more prominent kind of activity. So it does actually help us kind of expand our reach outside of The US.

So I don’t think it’s I I don’t know if it narrows us to The US. I think

Mark Zagorski, CEO, DoubleVerify: it’s global. I mean,

Laura Martin, Senior Media and Internet Analyst, Needham and Company: yes. I’m I’m just wrong. Yeah.

Mark Zagorski, CEO, DoubleVerify: Completely. No. I know. Think that’s fine. No.

But the other thing is too

Laura Martin, Senior Media and Internet Analyst, Needham and Company: I learned something.

Mark Zagorski, CEO, DoubleVerify: When when we think of expansion outside The US too, it’s not like us going into market. For the most part, we we sell local brands in local markets, but, you know, we’re working with folks like Microsoft and Unilever and Colgate and Wreck it. They’re global companies, right? And they have divisions all around the world that need support and that their ads spend is different in market a to market b. You know, Southeast Asia is very heavily social focused.

Right? They spend a lot on mobile and social. So having solutions that serve, you know, Unilever in Southeast Asia is just as important as having, you know, products that service their brand business in North America as well.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Well, I will tell you, Wall Street has decided, sometimes we’re wrong, that the future of television is performance. That that because Amazon has sent this new benchmark, that to keep up in connected television, you really do have to drive to purchase. The question is, does that make data irrelevant? Like, you’re selling a lot of data and verification, but I think one of the things you and I have talked about in the past, Mark, is that, let’s say half the impressions are wasted and they’re fraudulent. So long as somebody’s spending a dollar getting $4 of return at the purchase level, it doesn’t matter.

Like they’re they’re not gonna pay to hear that half their impressions are wasted because what they’re gonna solve for is I spend a dollar, I get $4 a purchase. So can you speak to that?

Mark Zagorski, CEO, DoubleVerify: Well, first off, wouldn’t you You disagree with me. Wouldn’t you rather not buy those four impressions that were wasted? Like why waste the money? That makes your return even better to begin with. So that’s the first thing.

But the second thing is, you know, what you noted is, yes, but who determines attribution? The platform that you bought from? Amazon’s Amazon’s gonna be the only people that give you attribution? Absolutely not.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Fair point.

Mark Zagorski, CEO, DoubleVerify: That’s why we have rocker box now to say, you need to be outside of that and say, okay. Well, the person saw a CTV ad. They also did a search. They, you know, were in saw out of home ad. Like, where who gets the credit?

And I think who got the credit has been gained by a lot of the big platforms for a very long time. Right? So I think, again, our position and our value prop has always been we’re outside of the transaction. We’re independent. We’re agnostic.

And in the same way, you know, we’re not going to make a call based on, you know, the quality of an ad based on what platform it’s on. We’re not going to make a call on giving attribution to somebody, you know, based on the platform that we’re going to give attribution based on an agnostic independent way. So I think what you just said, sure, if everything goes performance, okay, who determines what that performance is? It can’t just be the platform. There has to be someone independent outside of it to say that.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: You’re raising a really interesting question that I’m thinking or a really interesting learning that’s happening on my stage in real time. My very first speaker, which was Criteo in the morning, said that the sides are softening. The DSPs are taking on SSP capabilities. SSPs are taking on DSP capabilities. And the open Internet is getting to act more like a walled garden within themselves because these walled gardens, like the rise of Amazon and TikTok, are so powerful that these walled gardens are becoming more powerful as a group in a sense.

And probably they’re mostly taking share from each other, I would say. But, anyway, my question is, staying with this thing, this point you’ve just made, Mark, is is are we seeing that really going forward, your solution speaks to walled gardens, that’s where you said you’re going, and the open Internet both. Is the whole ecosystem is the is the demand and supply requiring more of a holistic look so that you take away the disadvantages of the walled garden and marry them with the advantages of the open Internet, which is comparability? Your your your solution compares walled garden self grading homework to the open Internet.

Mark Zagorski, CEO, DoubleVerify: A %. Right. I mean, that’s look. Again, when we verify an impression or a transaction, we’re indifferent to whether that ad that transaction was on social or on the open web, and it creates an even playing field for quality, but it also, you know, now with RockerBox, it creates an even playing field for attribution. Right?

So if you can work with the same metrics wherever you buy, have the same kind of independent view wherever you buy, then I think that makes open web on par with social across the board with regard to how advertisers evaluate the efficacy, the quality, and the return on spend.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Tell me where that goes. Is that good for the open Internet?

Mark Zagorski, CEO, DoubleVerify: It’s good.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Well, that would imply that the open Internet’s returns are at least as good on a like for like basis as walled gardens. Is that true? Mean, Because you see both.

Mark Zagorski, CEO, DoubleVerify: I mean, I’m not gonna it it depends. There’s so many factors. It depends on the advertiser strategy, what they’re willing to pay, what their what their actual KPIs are. I mean, the if advertisers weren’t finding value on the open web right now, they wouldn’t be spending there, and they obviously are. Right?

So they’re finding value. They find value in walled gardens. I think a a robust strategy includes all of those things. And there won’t be a single advertiser, I I don’t believe, that will sit on the stage and never say, we spend all of our money in just one place. They don’t.

They spend their money where people are. And if people are on the open web, then they’re going to spend money there. If people are on TikTok, they’re going to spend money there. They want to engage customers. They want to sell product.

They want to know that their ad spend has been efficient. And, you know, we can help them with that third thing, which is understanding how their ad spend across all those things compares.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Well, and the point I would build on is incrementality. Even if your walled gardens was the most efficient way, Amazon, just to be first CPG, you still have to reach everybody, and not everybody’s on Amazon. Amazon tells us they only have a 20 households here, and we know there’s two forty. So you you need to reach the other hundred if you’re selling toilet certain products.

Mark Zagorski, CEO, DoubleVerify: Yeah. Linear TV still is a multibillion dollar business. Right? Biggest

Laura Martin, Senior Media and Internet Analyst, Needham and Company: thing Wall Street’s gotten wrong in the last decade is how many linear TV subs there still would

Mark Zagorski, CEO, DoubleVerify: be in are still on linear TV. People still are watching connected TV. Like, again, there’s the you know, if you want to reach a mass audience, if you are P and G or Unilever or any CPG company, yes, you wanna lean into building brand through social, but you also have to reach everybody, and you do that through multiple different media.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: That’s true. Okay. Questions for Double Verify. Anybody any questions? Okay.

Great. We have about five more minutes, and then it’s time to go. Okay. So let’s talk about moats. So so competitive advantage, pricing power, I really like this strategy you’re articulating, not only of the pivot to performance, I like that a lot, but the bundling strategy of adding more things and adding products that drive pricing power.

I’m like a huge it’s sort of an editor of CEOs and CEO strategy. Like, I like all of that, like, on the 10 out of 10 level in terms of adding value. Bigger, more complicated bundles, lower churn, more pricing power through more value added. I totally hear that that works. And by the way, if it doesn’t work, they’ll push back and you’ll have to cut the price.

But you guys are good. So far, you’ve been really good at pricing products at a premium and then getting them adopted. So so far, I think you have a really good track record of introducing Can

Mark Zagorski, CEO, DoubleVerify: we just stop right there, Laura? No. I just wanna leave right there on that

Laura Martin, Senior Media and Internet Analyst, Needham and Company: And I and I hear you from this thing that I’ve learned on this stage, is maybe where advertising is going is integrated walled gardens to open Internet. You guys have a pole position in that because very few people can say that. But my question is competitive advantage, moats, which goes to pricing power, of course. But tell me how you think do you only think of your competitor as IAS? Or do you do you I mean, is one of the benefits that you have pricing pack because there’s only two of you?

Or do you think of single point solutions as competitors? Like, who’s your competitive set? And or I would have come on to this stage saying you’re just getting displaced because as we drive to purchase, we don’t need the data layer. Mhmm. But you probably disagree with that.

Mark Zagorski, CEO, DoubleVerify: Mean, you do disagree. I mean, I think we have a very robust competitive set, right, particularly due to the fact that there are lots of point solutions that solve small problems. Ultimately, I think when we talk about moat though, scale matters.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: And

Mark Zagorski, CEO, DoubleVerify: even with AI, the data that you train your AI on matters. That data that you train your AI on is advertiser data. And we’ve got, you know, a thousand of the biggest brands on the planet that work with us, including every major tech company. Tiktok’s ad spend, Meta’s ad spend, Google’s ad spend. Who knows

Laura Martin, Senior Media and Internet Analyst, Needham and Company: those? No one except them and you.

Mark Zagorski, CEO, DoubleVerify: Right. So we, you know, so like we have an incredible dataset that’s unique that we can build knowledge on. We’ve got broad scale, and we’ve got agnostic ubiquity across platforms, not just open web, but walled gardens, CTV, etcetera. So I think that puts us in a unique position. It does not mean there aren’t competitors out there, including some of the platforms themselves.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: But not really, because they only do themselves.

Mark Zagorski, CEO, DoubleVerify: They only do themselves and you can’t take a metric from platform to platform. So we are in a unique position and I think that that gives us, you know, strength moving forward.

Nikola Elias, CFO, DoubleVerify: Yeah. Mean, that that’s what they don’t have. Right? The the each each platform doesn’t have what we have, which is scope across every every I

Laura Martin, Senior Media and Internet Analyst, Needham and Company: wouldn’t find them as competitors, actually. And so I’m gonna ask my last hard question, Mark, which is when you think about Gen AI and data, how are you guys using Gen AI to lower costs? And the part that’s hard is you are adding employees second only to the Trade Desk because I’m gonna ask this of Jeff too. This is common. You guys add employees like no one else in the business except for Trade Desk, which means what that says to me is you’re not a tech platform.

You’re some kind of service platform because scale should mean that your revenue per employee is going up and it’s not. You know? When you have Google and Facebook, they are really tech platform and they scale. Why are we adding so many employees, please?

Mark Zagorski, CEO, DoubleVerify: Look. I I think you have to look at where we are in the evolution of the business and when we really started growing as a company, which is only in the last few years. We’re still building infrastructure around the world from account management considerations, marketing considerations, like all of those things, feet on the ground, boots on the ground still matter. Yes. We’re a tech company, but I’m gonna tell you that a major CPG brand wants a person in Singapore that they can talk to for their division there.

That’s just the reality of it. You need to have that. However, we have incredible leverage in our model. You’re going to see that we’ve mentioned in the last two calls, you’re going to see, headcount growth start to level off, as we see efficiencies of scale. You know, right now, 25% plus of our customer service requests are now being managed by GenAI, right?

So that’s helping. We, you know, I think 20 to 30% of our code now is being created through AI tools. We’ve been able to manage and have a incredibly high gross margin of over 80% the last two years because of our unified content intelligence tool, which does predictive modeling to understand context of video and short form video, which has been blown up across Shorts, you know, TikTok, and, Reels. So, like, if you look at the volume of transactions we’re measuring versus kind of how fast we’re growing, we’re getting incredible leverage and it’s only going to become better.

Nikola Elias, CFO, DoubleVerify: Yeah and I think these are investments against innovation, right, that provides us more scale and actually a greater share of the Right? Like, we’re growing faster. We’re now a larger company than our closest competitor because we continue to innovate.

Laura Martin, Senior Media and Internet Analyst, Needham and Company: Okay. Well, that’s okay. I spent an hour with Roku and the CFO’s convinced me that revenue per employee is not the right productivity metric. So will be changing our productivity metric. I don’t know how you guys come out on that, but I’m keeping a close eye on Oh, okay.

FTEs, as you know. Alright. Call it there. Thank you very much. Thank you, Laura.

Thanks. Bye.

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