Perion at Needham Conference: Strategic Shift to AI-Driven Advertising

On Tuesday, 13 May 2025, Perion Network Ltd (NASDAQ:PERI) presented at the 20th Annual Needham Technology, Media & Consumer 1x1 Conference, outlining a strategic shift towards a CMO-centric, full-stack advertising platform. The company highlighted its focus on integrating AI and performance-based advertising while addressing challenges such as market competition and evolving consumer habits.

Key Takeaways

• Perion is transitioning to a full-stack platform, emphasizing AI and performance-based advertising.
• The company acquired Green Bids to enhance capabilities in closed gardens like YouTube and Facebook.
• Connected TV (CTV) and Digital Out of Home (DOOH) are pivotal to Perion’s strategy.
• Perion aims to bridge the gap between CMOs and CFOs by linking advertising metrics to business outcomes.
• Despite challenges in the open web, Perion’s unified platform is a key differentiator.

Financial Results

• CTV experienced a 31% lift quarter over quarter.
• Significant improvement in open web numbers from the previous quarter.
• Increased spending from existing customers.
• Stronger-than-anticipated pipeline for Q1.

Operational Updates

• Perion is pivoting to a CMO-centric, full-stack platform.
• Acquisition of AI-first company Green Bids to enhance performance in closed gardens.
• Integration of UID 2.0 solution to unify various advertising channels.
• "Perion One" strategy, focusing on acquisitions, is central to growth.

Future Outlook

• Continued evolution of AI capabilities through acquisitions and development.
• Focus on internal efficiencies and delivering value to advertisers.
• Growth expected from the unified platform and performance-based advertising focus.
• Revenue improvements anticipated following new management team joining in February.

Q&A Highlights

• No elongation in the sales cycle due to ease of implementing Green Bids technology.
• Decline in open web revenue attributed to market conditions and competition.
• Search business decline offset by growth in other areas.
• CMOs prioritize driving real outcomes over specific advertising channels.

Readers are encouraged to refer to the full transcript for a detailed account of Perion’s strategic insights and future plans.

Full transcript - 20th Annual Needham Technology, Media & Consumer 1x1 Conference:

Unidentified speaker: About what Perion does. And then you had a big earnings announcement this morning where you sort of blew away all your numbers, raised guidance, raised margins. So why don’t you talk about sort of what Perion does and what it’s over delivering on and what you see as the outlook for 2025 now?

Tal Jacobson, CEO, Perion: Yeah. Absolutely. Thanks for having me. Know, Perry and we’ve made quite a pivot in the last year, we’re moved into becoming a fully full stack platform from CMOs. So the way we think about it is, you know, where where CROs have Salesforce, CROs have Monday.com, CTOs have Jira, now CMOs can finally have their own platform.

Right? And that goes we’re not trying to replace other. We’re not gonna try to replace our DV or the trade disc. What we’re saying is we’re gonna connect all of them. We just announced of integration partnership with the trade disc.

So we’re connecting all those technologies, but the CMO would have one unified platform that he can run all his campaigns, all the strategy from planning to execution, and then get reports across all of them. Now within that, you know, we’ve in the past year, we’ve actually enhanced our leadership. One of them is here, Steven Yap, that used to do all the go to market and sales for d v three sixty at Google for seventeen years and now, you know, move to our company today to do the exact same thing for our platform. So we have top tier new management. And within that, we just announced we bought an AI first company that does custom algorithm for closed gardens.

Right? So for YouTube, Facebook, Instagram, and through that, we can actually increase our total addressable market dramatically. We were only on out of home CTV and open web, which we all refer to as open web. And now we’re moving into closed gardens. So that’s that’s a very good shift for us.

Unidentified speaker: Okay. So one of the things you said to me at at CES January, so five months ago, is like the open Internet is dead. In answer to my what’s the most provocative thing you’re saying, that was very provocative coming from an open Internet player. So definitely moved to the top of my ranking of most provocative things said at CES. And my question is and and I looked at the open web numbers you guys reported this morning, and I think they were down, like, 26, 20 eight percent.

Yeah. But they were down, like, 60 something percent last quarter.

Tal Jacobson, CEO, Perion: Right.

Unidentified speaker: So the open Internet was dead for six months, and now you’re gonna be growing it again? So Yeah. What changed?

Tal Jacobson, CEO, Perion: So, you know, you have an amazing memory. So, yeah, I think, you know, open web is is absolutely, you know, not the future. There’s a lot of money to be made on open web and that’s great. But when you look at agencies, 80% actually comes from social. Right?

And now when you look at brands and agencies, you see that more and more money is actually shifting from brand awareness into performance. Right? And that’s that’s those are the two shifts that we’re focusing on. How do we get better solution for closed garden, and how do we focus on performance? Right?

How do we make sure that the advertiser is getting the right ROI, we’re reducing waste, so they’re they’re gonna get exactly what they need so they can come back and, you know, build more and more more and more of their campaigns on our platform. Okay.

Unidentified speaker: So one of the things you just said where you’re pivoting to is the CMO first target market where you’re gonna become the platform that they can do everything on. One of the things that Trade Desk was just saying is that he feels he has four constituencies. One’s the chief financial officer, then the CMO, then I think somebody and then the head the guy that executes programmatic. So maybe it’s the person that knows about programmatic. Anyway, there’s four.

My question is CMO feels pretty high in the ranking. Does that mean your client size is smaller which is why you’re dealing with the CMO and not somebody at a lower level?

Tal Jacobson, CEO, Perion: That’s that’s a that’s a good question. So think about it, you know, Salesforce. Everybody’s using Salesforce on a sales team. Right? I mean, Steve has a hundred people on your team.

Everybody’s using that, but Steve needs to wake up in the morning, open Salesforce, look at the pipeline, look at the pacing, look at the forecast. Right? So that’s the way we’re thinking out, Perion. Right? The CMO logs in and see the orchestration of everything that’s going that goes on.

Right? But the programmatic people also gonna use that. Right? The planners are gonna use it. Data analysts are gonna use that.

So there are a lot of different layers exactly like in Salesforce. Right? But I think what we figured out in the past year, CMOs are not able to talk with CFOs about the results.

Unidentified speaker: That’s true.

Tal Jacobson, CEO, Perion: And there’s a there’s a fundamental issue because look at what we’re reporting. We’re reporting on viewability, CTR. I wanna see one CMO that goes to the CFO and say, well, you won’t believe with the hundred million dollars that you gave me for advertising, I got amazing CTR and viewability. That’s that’s exactly the point where it’s getting replaced. Right?

Yeah. Who cares? Yeah. Like, we’re selling shoes. How many shoes did I sell?

Correct. Right? If you know, it doesn’t matter. Correct. I and I think that’s the fundamental issue we have in online advertising, digital advertising.

We’re reporting the wrong things. That doesn’t help the CMO prove that he’s investing right. Right? Maybe he is, but there’s just no way to to help him say that. Right?

And that’s where Perion comes in. We’re actually translating the metrics that we know now into actual insights, into uplifts. Right? What are the outcomes that you’re gonna get if you’re gonna invest in those campaigns?

Unidentified speaker: So what would an so, ultimately, if does the CFO in this world view only hear sales? So, ultimately, the CMO’s job, chief marketing officer’s job, is to translate impressions and, you know, brand lift and incrementality, things that maybe he saw before. He has to somehow translate those into sales revenue because that’s the only thing the chief financial officer understands. And if so, how does Perion help him do that?

Tal Jacobson, CEO, Perion: Right. So for us, it’s it’s a natural progression for what we’ve started a few years back. We our retail media is actually how do we connect their data to see an uplift in sales. Right? So we started very simple a few years back, just taking some data and saying, you know what?

We’re gonna do that campaign. You’re gonna tell us, did you sell more, whatever it was, Hershey’s or whatever in that area. Now it’s getting more and more sophisticated. We’re actually integrating their promotions and we’re integrating their data to a lot of the cases to see do you actually see an uplift. Not an uplift in people clicking your ad.

Nobody cares if people click their ads or not. Like an uplift in actual sales in that area. Right? Mhmm. So it’s, you know, it’s getting there, but I think that’s the future.

I think the future is, you know, one unified platform that can do pretty much everything and not one platform for open web, one platform for YouTube, one platform for meta, one platform for TikTok, I think that’s that’s a mess. So you need one unified platform. You you need to be able to measure actual outcomes, business outcomes Mhmm. With your investments. And you need to be able to speak both languages, the CMO language and the CFO language.

Because that’s the only way you’re gonna get more and more budgets into your platform. Right? Okay.

Unidentified speaker: But your contention is a CFO speaks sales only.

Tal Jacobson, CEO, Perion: CFO needs

Unidentified speaker: to see sales in this.

Tal Jacobson, CEO, Perion: Right. CFOs looks at business outcomes. Right? So how do we bridge the gap? How do we bridge saying, okay, great.

You guys have great viewability. You got you guys have an amazing CTR and ads. How do we see that this was actually translated into sales, into more people coming into the stores, into better brand awareness? I don’t know, whatever the CFO cares about. Right?

How do we get more people into car dealerships? Mhmm. How do we get more traffic?

Unidentified speaker: Physical traffic into dealerships

Steven Yap, Go to Market and Sales, Perion: or something.

Tal Jacobson, CEO, Perion: Mhmm. So every company has their own metrics, but how we need to to build that bridge in between the CMO and the CFO.

Unidentified speaker: Okay. So in that answer, you said we need to have one unified platform across walled gardens and into the open Internet. Yep. By the way, I heard the exact same thing from the Double Verify CEO and CFO. They were talking about there has to be unification across walled gardens.

That’s where the open web is going. Yep. Or said another way, that’s what’s defendable with pricing power is something that looks across walled gardens and the open Internet because the walled gardens grade their own homework. And even within the walled gardens, Meta’s outcomes aren’t the same measurements, aren’t the same as Google’s, aren’t the same as Amazon’s. So what’s valuable is somebody that can go across walled gardens into the open Internet.

Okay. Yeah. And that’s what you’re saying too. My question is, one unified platform that doesn’t have connected television?

Tal Jacobson, CEO, Perion: We do have.

Unidentified speaker: Okay.

Tal Jacobson, CEO, Perion: So CTV is our numbers showed 31% lift quarter after quarter in our CTV. Right? And that goes directly into Perion one platform. And we’re working on more and more advancements on our CTV features and deliverability, connecting more channels, obviously, connected that to our DCO. So our algorithm actually builds the creative on for CTV.

So CTV has to be you know, it’s a crucial part, and we’re we’re happy to see that our CTV is 3031% growing year over year.

Unidentified speaker: Right. Well, it makes sense if you’re gonna do a unified platform for the CMO. You might have you must have a CTV solution.

Tal Jacobson, CEO, Perion: Absolutely.

Unidentified speaker: So and somebody asked Trade Desk about this just now, and they were saying they’re going to create a marketplace where they put all these content creators, because there’s a lot of them, through Gen AI content creators on their platform, and they’ll charge a fee if somebody wants to use that Creator to create custom custom creative for different target markets, which I think is probably where the world’s gonna go. Yep.

Tal Jacobson, CEO, Perion: Is that

Unidentified speaker: the kind of thing, will you guys create a marketplace or will you just use Gen AI so people can build creative through your platform and you’ll have a creation engine that’s sort of captive to your platform. What’s your thinking there?

Tal Jacobson, CEO, Perion: Yeah. So we’re we don’t call it the marketplace, but that’s exactly what what we’re aiming for. Right? So with our technology, you can build your own creative. You can ask our algorithm to change that creative base on so many different factors.

Right? It’s raining, if it’s, in the middle of the night, if it’s on an iPhone versus an Android. Right? So we have so many different ways to tweak that through algorithm. So that’s already part of the system.

Right? I think I think what’s so important because you you talked about CTV. As an industry, I think we’re always thinking, you know, does CTV grow? Does out of home grow? Right?

But for marketers, for CMOs, I don’t think they should care. I think, like, if I was the CFO of Nike, would I care if my investment is on CTV, or would I care that I actually sold more shoes? So by us having a unified algorithm that can shift between channels to push actual outcomes, Maybe it’s CTV. Maybe it’s not. Maybe it’s TikTok.

Unidentified speaker: But I’ll push on that a little bit because I think we all know that if you do performance only, bottom of funnel might be more performative in the current quarter. But if you do that for three years in a row, you suddenly have no one at the top of the funnel. So you might decide to have and in fact, we know this for a fact that the returns on capital demanded by top of funnel CTV or even for performance advertisers are like one to one. If they get a dollar of spend to something they can attribute to a sale downstream, they’ll take one to one. Whereas at the bottom of funnel, they’re looking for four or five to one because they understand that this one to one that sort of paid for the ad dollar

Tal Jacobson, CEO, Perion: Right.

Unidentified speaker: They’re getting brand value and reach and they’re getting awareness that’s feeding the rest of the funnel over the next three years maybe.

Tal Jacobson, CEO, Perion: No. Absolutely. I absolutely agree. So for Perion, historically, we were very much focused on the brand awareness parts. Now with green bids, we have all that performance part.

So I think once the CMO defines, you know what, I need people to go to physical Nike stores, but I also need people to buy. Right? So those are maybe two different metrics. So I’m gonna put $5,000,000 towards that and maybe $7,000,000 towards this, and those campaigns can run separately in parallel having two different metrics. Right?

So maybe one would have more CTV and out of home, while the other is gonna have more TikTok, Instagram, like really push people to buy. Right? It’s fine. But all I’m saying is when you have in front of you the outcomes and not the channels Mhmm. It’s a different story.

Unidentified speaker: Right.

Tal Jacobson, CEO, Perion: Right? CMOs, in general, good CMOs don’t really care if that’s CTV or not. They care about did I drive real outcome to my company.

Unidentified speaker: And I guess I would just say outcome over time. Yes. Outcome isn’t only this quarter. I mean, even though that might be the highest and best use. Right.

You wanna divide you wanna build outcomes for next quarter and Right.

Tal Jacobson, CEO, Perion: And and again, you can define what outcomes means this quarter. Right?

Unidentified speaker: Right.

Tal Jacobson, CEO, Perion: Better brand awareness, better sales, better That’s true. Right? Yeah. It can change. It’s dynamic.

Unidentified speaker: Yeah. Okay. And are you finding that that’s the reason that your open web numbers have improved so dramatically quarter over quarter and now you’re gonna grow in the second half like you thought you might? Is that because you’re getting new clients, Tau, or because these new capabilities are getting you more money from old clients? Where’s the where’s the why is it getting better so much faster in the open web?

Tal Jacobson, CEO, Perion: Right. Well, it’s actually three things. Yes. Existing customers now spend more with us. You know, we’d I think with Steve coming on board and some very talented people with him, we’re seeing new customers as well.

But we’ve the Greenbit company that we bought, we’ve started from a partnership, And we’ve used them with a few customers saying, you know what? We have a few customers. They wanna try out YouTube on steroids. Can you do that with us? Mhmm.

They said, fine. So and then it worked so well. Customers came back. Okay. Right?

And and we actually saw synergies before we bought them. Okay. So and through that, they said, oh, you know what? You guys are doing great YouTube. Can you do this as well?

Can you do web? Right? So it’s already starting. The synergies are only pushing our revenues. We just got started.

You know? Again, we’ve announced period one and the new management team beginning of February. Mhmm. So it’s on they’re only three months in Yeah. But we’re already steering good numbers.

I think, you know, q one looked good, but what really encouraged us is not the q one numbers. Q one numbers are great, but the actual pipeline. Okay. It’s The backlog sort of. Yeah.

It’s actually stronger than what we anticipated. It’s stronger than what we saw.

Unidentified speaker: Because of Perion One. Yes. Because of this strategy you think is working and taking hold.

Tal Jacobson, CEO, Perion: Yes. Again, we just got started.

Unidentified speaker: Right. Was just gonna say, what other I know you’ve said for a long time acquisitions are a key part and you’ve been sort of steadily making acquisitions every one or two quarters. Yep. So what’s missing? What do you do you have to do more with the walled gardens?

Is that the big pieces that’s missing? Or is there another channel I’m not thinking of? Because deal so let’s answer that question first because I have another one. What’s missing? What else do you have to build to make this platform, Perion One, have more pricing power or the ability to bring the next customer faster?

Tal Jacobson, CEO, Perion: Yeah. I think AI, you know, is evolving so fast. We need to evolve even faster. And you can see that, you know, you saw PubMatic just launched their own AI platform, Nexen launched their own. It’s a race.

Right?

Unidentified speaker: Yeah. It’s a race.

Tal Jacobson, CEO, Perion: We need to be faster. So GreenBits is a great addition. It’s a quantum leap for us on AI, But we’re constantly looking for more and more companies to advance what we have and to make it faster, to make it better, to make it unified. So that’s that’s our focus.

Unidentified speaker: Okay. Okay. So more more technology forward using technology. Okay. Is direct out of home was the big, the HiveStack acquisition, which I want to say is two years ago.

Does that give you a big competitive advantage because a lot of guys don’t have as leadership a position in Dooh? So when you talk about Perion One, one of the big pieces that you have that a lot of people have not emphasized to date is out of digital out of home.

Tal Jacobson, CEO, Perion: Yeah. So I think only us and now T Mobile with VSTAR, we’re the only companies that have that. And if we actually wanna be, you know, the best friend of the CMO to do the entire journey to manage all their to orchestrate all their activity, you can’t do this without out of home. Right? You can’t do this without CTV.

You can’t do this without closed guardians.

Unidentified speaker: Right.

Tal Jacobson, CEO, Perion: So I think we have an advantage that other companies don’t.

Unidentified speaker: Okay. And so one of the questions I have, so Wall Street believes we’re we’re moving toward more toward performance. Sounds like you believe that too. Direct digital out of home has a real problem with performance. How many people walk by?

How many people notice the billboard? Even if they all went into the store directly below the billboard, did they all buy something there because of the billboard? How do you speak to that? If the world’s moving more performative, which I think you believe it is Yeah. How is direct out of home fit with that?

Tal Jacobson, CEO, Perion: Yeah. Listen, I think the issue with out of home was always out of home is a great format. I think everybody in the advertising industry believes out of home is great. Okay. The fact that agencies are out of home are so separate from all the other parts of the agency, that’s the disconnect that we have.

So if you have one algorithm that can say, okay, what are the outcomes you need? I’m gonna push out of home around the store, but actually also push audio for Spotify when you’re getting near to the store and CTV for people that lives around it. Right? So when you look at it on on an holistic level, it makes a lot of sense. And what when you buy, like, agencies have out of home separate, nobody talks with them.

Right? And then you have CTV, then you have social, and then you have Edwards, like, the fact that it’s so fragmented doesn’t help provide outcomes, right? That’s where the waste comes Okay.

Unidentified speaker: So I totally hear your point, and I hadn’t thought of it at all. When I think of digital out of home, of course, I think of Times Square. Yeah. Right? Which is best thing.

And they had Times Square. Mean, Times Square is sort of HiveStack’s anchor tenant. Right? Yeah. But you’re right.

Within the stores, that’s a smart way. Like, if you like these products, go to Floor 2 in the back and buy bathing suits on sale or whatever. I totally get the out of home moving people through the store. That’s smart. But when we talk about big, I was gonna say, you know, premium placements on digital billboards.

How do you make that performative? Or do you just not make it performative and people who buy just buy it at a low CPM for reach and they don’t demand performance metrics?

Tal Jacobson, CEO, Perion: Yeah. Well, it it depends. Right? We have, you know, when Meta launched their AI glasses with RayBand. Mhmm.

Right? They ran a huge campaign with us nationwide here on all the at home. Yeah.

Unidentified speaker: With people wearing glasses?

Tal Jacobson, CEO, Perion: Yeah. So, and we they had video ads across all subways, Times Square, I mean it’s a great So

Unidentified speaker: it’s a reach. They’re using it as a reach medium to say, hey, we have this new product. Yeah. So it’s substitutable to TV except it’s in your face at eye level or can’t miss loud. Okay.

Yeah. Alright. So it’s so it substitutes to TV, linear TV in a way, not

Tal Jacobson, CEO, Perion: It The the only thing is we’re actually telling advertisers, you have an amazing budget with us on CTV. We can actually sell you the video ads out of home. Just know no audio, it’s a different price. But but again, skippable, a lot more eyeballs for every ad. So it’s, you know, it it works.

Unidentified speaker: Yeah. It’s sort of complimentary to CTV. I totally get that.

Tal Jacobson, CEO, Perion: It is.

Unidentified speaker: The top of the funnel. And like you say, lower price point and probably different reach, probably incremental reach to CTV because by definition, it’s out of home. So they’re not home watching a CTV. So to me, it’s just another touch point where somebody can say, oh, I gotta remember to ask about that or go into the store or something and Makes a lot sense.

Tal Jacobson, CEO, Perion: Somebody somebody like three months ago told me he saw on the subway ads for the trade disc.

Unidentified speaker: What?

Tal Jacobson, CEO, Perion: I said that’s

Unidentified speaker: What? It’s an enterprise Yeah.

Steven Yap, Go to Market and Sales, Perion: It was on Metro North.

Tal Jacobson, CEO, Perion: What? Yeah. So I I mean, if the trade desk and those are smart smart people.

Unidentified speaker: Yeah. Totally enterprise.

Tal Jacobson, CEO, Perion: If they understand the the the value in out of home Mhmm. Then it does bring value.

Unidentified speaker: Well, maybe there’s a lot of ad buyers in local in New York.

Tal Jacobson, CEO, Perion: Yeah. I

Unidentified speaker: mean, maybe that’s why. Yeah. So okay. So one of the things you did recently is you upgraded your talent team by bringing Steven in. So on duty, you have to hand him the microphone.

But the question on the floor I’m gonna ask is not of Tal. I’m handing my microphone to Steven who just came from seventeen years at Google. Why don’t you tell the audience why you came to Perion?

Tal Jacobson, CEO, Perion: I can do it from here. Yeah. Yeah.

Steven Yap, Go to Market and Sales, Perion: Yeah. It’s just my voice. Thank you. Yeah. So so between DoubleClick and Google, I spent twenty five years and during that time just built helped build their ad tech stacks across the globe.

You know, stemming from a conversation with Tal and and and talking about the the recent acquisition of HiveStack actually and and just kind of my belief and how that fits in to the digital ecosystem and and kind of bringing less bringing more efficiency to the industry and a lot less waste. And just in terms of how people plan and execute and deliver their ad campaigns. We got into a conversation and you told me all about Perion and and kind of the vision and what was what they were really kind of driving towards. And you know, what it reminded me of was like an old double click. Like back in the day.

Right? When it when it obviously the pioneers of of ad tech with the launch of their ad server. Because they had so many great fundamental products that were foundational in kind of building the industry, and that how they wanted to kind of pull them all together to make a more efficient, less wasteful industry. It was something that I was very much a firm believer in across the industry that we just we needed to do better. And based on the vision, that aligned perfectly with kind of where I thought the industry needed to go.

So here I am.

Unidentified speaker: Okay. Great. So Tal, one of the questions I’ll ask you, staying on the issue of Google, is there’s a real controversy as to if the DOJ in September has a hearing and says, look, Google has to spin off its ad tech ad server and its SSP to get it out of the monopoly. Yep. And Google will appeal, but I think there’s a consensus growing consensus of opinion in DC that she will put behavioral remedies on them from the day she decides that in September even while they’re fighting to not have it structurally spun off, but that the behavioral remedies will actually change the balance of power in the ad tech open Internet.

Do you have a point of view as to how much that helps Perion or doesn’t help Perion? Like, I get ratings from two, which means doesn’t matter to us, to 11 out of 10. Pubbatics like it’s an 11 out of 10. It affects everything we do. So do you have a point of view if if she defectively defacto spins off in September the Google ad server and and SSP?

Even if she just does it behaviorally.

Tal Jacobson, CEO, Perion: Yeah. First of all, I think that’s gonna take time. Whatever they’re gonna decide, that’s gonna that’s gonna take a lot of time. Second, okay, let’s say it spins off. Right?

Now what? It’s a different company. Still, people would need to buy YouTube through a unified platform like Google even though the d v let’s say d v three sixty is not owned by Google, but by another company. How would that help other companies? Why would that like, at the end of the day, it’s not about I think a lot of time we think that Google, by the way they act, is forcing everybody to buy your thing through them.

But that’s I’m not sure that’s the case. I think it’s about user behavior. You people are using YouTube. Right? And there’s a platform to buy YouTube.

People are using TikTok. Whether we like TikTok or not, people are using that. As in as long as they use that, they do not use other things. Okay. Right?

So you need to buy their ads. Again, going back to CMOs, they don’t care if you’re buying that through PubMedica or through us or through whoever. They just need to get those audiences to buy their shoes.

Unidentified speaker: Yeah.

Tal Jacobson, CEO, Perion: Right? So I’m I’m not sure that would actually matter to any of us in the industry. Okay.

Unidentified speaker: Like I said, real controversy. Two to 11, depending on which CEO you ask. So yours is a two. Got it. All good.

Tal Jacobson, CEO, Perion: Yeah.

Unidentified speaker: Like you said, it probably takes a long time. Google has a lot of resources as does the federal government. So might take a long time. Okay. Let’s talk about sort.

Remember sort? Okay. So sort used to be a big advantage of yours because you had all the great search data, which is first party data, and used to, like, apply it to the open web. Is sort, is that still a thing? Is it not really a thing?

Tell us what’s going tell update us on what’s happening with sort. Yeah. And how it adds pricing power and competitive advantage to Perion today in its current in its current, you know, sort of mix is.

Tal Jacobson, CEO, Perion: Right. So SORT started

Unidentified speaker: Better tell them what it is too.

Tal Jacobson, CEO, Perion: Okay. SORT started about three or four years ago when everybody thought cookies are gonna go away. Yeah. Again, see? Things take time and do not go anywhere.

But we so we’ve we’ve done it’s it’s funny. That was deep learning back then. Now everybody calls it AI, but we’ve done it four years ago. How do we recognize, users without knowing anything about them? So we’ve done that for web.

That was very successful. In the past, I think the past year, we’ve extended that to CTV. And now we’re using, you know, again, I think when you look at the bigger picture, cookies is no longer, is is not as big as an issue as it was before because, again, we’re gonna go into closed garden. YouTube doesn’t use cookies. And Google yeah.

Facebook, Instagram are not about cookies. We just integrated the UID two point o. Mhmm. So we have that and we have sort. So it’s not really about fighting our way to live without cookies.

Now it’s more of what a lot of companies call it curation. Right? How do I get the inventory on CTV and web in a way that is not wasteful. Right? So we’re using that to increase efficiency, reduce waste, and again, it all goes back to how do I provide actual outcomes.

So sort actually evolved so much further than just a cookie lesson.

Unidentified speaker: Just be an ID solution, and now it’s actually going all the way to outcomes.

Tal Jacobson, CEO, Perion: Yeah.

Unidentified speaker: And does it give you a pricing power and competitive advantage of getting new business?

Tal Jacobson, CEO, Perion: It does. It does.

Unidentified speaker: Okay. So it’s still still that was the original role for it. Right? Was to have an ID, a unique ID solution. You’re saying you kept the uniqueness of it as a product offering.

It’s just a lot bigger now. Right. It’s now about outcomes, not just ID solution. I assume people are still using cookies, right, since they haven’t gone away or not really?

Tal Jacobson, CEO, Perion: Yeah. No. People can use cookies.

Unidentified speaker: Uh-huh.

Tal Jacobson, CEO, Perion: I mean, some of our clients are saying, you know what? Just give me half of it on sort and half of it in cookies. Let’s see what works better. That’s great. Just And we can use we have Experian.

We have UID two point o. We we have we have it all. As I said, I’m not trying to replace anyone.

Unidentified speaker: Right.

Tal Jacobson, CEO, Perion: You know, whatever you’re used to, whatever you want, you can find it on our platform. Just use it. Okay. We wanna be as flexible as probably Salesforce. Right?

I mean, we’re not gonna replace all the other parts, but we’re you’re able to connect those parts into us.

Unidentified speaker: So speaking of this subject specifically, doesn’t scale matter? Because, I mean, I don’t hear different words out of the trade desk. They wanna be everything to their peep all people except for they’re doing it at the holding company level. Right?

Tal Jacobson, CEO, Perion: Yeah.

Unidentified speaker: So don’t they have a huge competitive advantage because they have $12,000,000,000 of gross ad spending going through their platform in terms of data advantage, in terms of algorithm updating? How does that position somebody like Perion? Like what’s your competitive advantage versus a guy that’s really big, has a lot more data?

Tal Jacobson, CEO, Perion: Yeah. Well, think the trade desk are doing an amazing job on everything they do. Our difference is, one, we have a DCO, so creative really matters to us through technology. DCO. Dynamic creative optimization.

Unidentified speaker: Yep. They definitely don’t have that.

Tal Jacobson, CEO, Perion: Yeah. They do not focus on creative. We have we’re connected to a lot of data sources. So the trade ask is is great, and we’re connected to them. But we also have sort.

We also have other data partners. We have our digital at home. We now have closed gardens, which a lot of the other companies do not have. You know, even Google is serving Google inventory. They’re not serving Facebook inventory.

Right? That’s true. We are. That’s true. So, again, I think the trade is are doing an amazing job at what they’re focusing on.

We’re we’re looking at things a bit different.

Unidentified speaker: Yeah. Well, that’s the way to create differentiation and pricing powers. Don’t do what other people are doing. Does anyone have any questions from the audience? Yes, Andy?

Sales cycle length, is it elongating or shortening?

Tal Jacobson, CEO, Perion: You wanna you wanna answer the sale sale cycle? Because you’re the person who’s in charge of sale cycle? I am.

Steven Yap, Go to Market and Sales, Perion: Yeah. So so right now, we haven’t seen an elongated sale cycle. That is primarily because when you look at things like the Green Bids technology in particular, the application of those onto kind of existing campaigns is relatively easy. Right? And with their kind of deep integrations with d v three sixty and the likes of Trade Desk and and Meta and YouTube.

It’s it’s one of those things where we can implement within a matter of days versus a matter of months. So we don’t anticipate right now say again? Yeah. I don’t think I understand the

Unidentified speaker: You want to pay more for it or whatever. It’s costing more. You’re trying more value.

Steven Yap, Go to Market and Sales, Perion: Yeah. But for performative solutions, right, like like they are just for for any kind of performative solution in the market, you know, amount of them they invest within the tool in terms of what they buy, they get obviously exponential return as a result of it. So, yes, you pay more for it, but the dynamics of those types of programs, right, where you’re paying for the performance of it, it actually that that’s not really what inhibits or slows down the sales cycle. It’s usually technology implementations.

Unidentified speaker: Apologize. They’re sort of indenting return on investment. Or

Steven Yap, Go to Market and Sales, Perion: No. No. They they’re very much they’re very much concerned about the return on investment, but because it is they’re implementing a performative solution. So if I a great example is if I have a campaign with YouTube and I expect 1.5 x return on my ROI from or my return on ad spend, and I know historically that in in when I apply these performative solutions, get three x ROAS, then as long as I’m covering my cost, which we obviously we do a whole analysis in terms of, hey, this is what we can bring you. We run tests with them because that’s how actually the custom algos work through kind of the testing methodology.

No. No. Not materially.

Unidentified speaker: Any other questions for Tal or for Steve? Or for we actually have the CFO here too. Yeah. So we got lots of we got lots of people in the audience. I want to talk about search.

So search has gone from 50% of your revenue. It’s on its way to 5% or zero. My question is, was there and what was interesting about that to me, Tal, we sort of saw that visibly because of changes that Microsoft was making that disrupted almost every player they’ve been partnered with. It wasn’t just you. It sort of negatively injured a lot of different people.

My question is, we also saw your open web, like advertising line item segment of revenue fall at the same moment. Was that because the advertising segment was benefiting from search data that is the search sort of disappeared? Or was it just coincidental they were going down at the same time? I know that we’re about to grow in open web, but was there four months, four quarters there where our search data, as it came out of the benefiting the advertising business, we saw negative comps in open web?

Tal Jacobson, CEO, Perion: Yeah. So it has nothing to do with data.

Unidentified speaker: Okay.

Tal Jacobson, CEO, Perion: It has a lot to do with market conditions. So what happened is beginning of last year, you know, I guess that that took a bit of time for us to for the market to the industry to realize that there’s now a lot more inventory than there used to be. Right? So historically, Perion made a lot of money out of managing inventory. Right?

So we didn’t call ourselves an SSP, but, you know, our search business was basically an SSP for Microsoft. Yeah. And we didn’t call ourselves an SSP on web, but, you know, Vidazoo was basically Vidazoo, the company that we bought was basically in kind of an SSP for websites. And what we saw is a shift in the market where, you know, TikTok came and flooded the market with inventory. And then Reddit really grew and Pinterest grew.

And all of a sudden, there was way too too much inventory and not enough marketing budgets to fill them in. And we saw those two drops because, you know, search Microsoft didn’t need so much inventory as they used to in the past. That’s I guess, that’s why they’ve changed their mechanism. Mhmm. But we also saw that in web.

We and and and and to be honest, you know, we were speaking with, you know, all the major publishers here on the Manhattan Islands, and they all saw the same thing. Right? They have less inventory. I mean, they’re not getting as much organic traffic from Google as they used to. Yeah.

All the websites. Yeah. And with that, you know, our web, activity started to go down. So it’s not a coincidence. It’s, unfortunately for us, a perfect storm because we were so heavily dependent on managing inventory.

Mhmm. And that’s why we actually made the shift on focusing on CMOs and on budgets and not on inventory. You know, we’re trying to get to a place where we’re agnostic to whatever inventory they need. We don’t we don’t wanna play that role of just managing inventory. We wanna play the role of providing value to the people that actually have the money to spend on on media.

And that was the major shift. And I think through that value, we were able to get more campaigns run on web now. But that’s we just came to it from a different angle, not from managing inventory, but to managing demand.

Unidentified speaker: So one of the things that sort of Jeff Green and I from Trade Desk disagreed on stage is he thinks all the power is with buyers. And I see this whole notion of curation shifting power back to the sell side, shifting back to sellers. He disagrees. No problem. But what you just argued is that you agree with him, that because of the rise of TikTok and because of the rise of Amazon Prime coming into the ad market and Netflix coming into the ad market, and you gave another example that I’m forgetting, that there’s been this explosion of inventory, let’s call it high quality inventory, explosion of ad units are now available, which in your opinion is a shifted power back to the demand side and away from the supply side.

Is that what I heard you say?

Tal Jacobson, CEO, Perion: I think it’s always better to be closer to the person that holds the money than the inventory. Right? I think curation, even though curation helps publishers, at the end of the day, the way it helps publishers is by providing better value to the advertisers. Right? You don’t need to buy all my inventory.

You just need to buy this part, which is, I don’t know what, women that love yoga in Manhattan at whatever. Right? So I’m just gonna sell you that segment. So, again, it all goes back to what does the advertiser need. They’re holding the money.

They’re controlling that. So on that part, you know, I think I I agree with them.

Unidentified speaker: Is this strategy you’re executing require more employees than the olden days? No. No?

Tal Jacobson, CEO, Perion: Because we’re focusing on AI so dramatically, also for internal efficiencies.

Unidentified speaker: Okay.

Tal Jacobson, CEO, Perion: So, no.

Unidentified speaker: And for efficiency too. I don’t know if you’ve seen this. I don’t know how close you follow Mark Zuckerberg, but he’s saying that by middle of twenty six, he believes that the code writing ability of LAMA, which is his large angular tone, will replace every mid level software engineer. And he’s a software first platform. Can you imagine?

Yeah. I mean, that’s amazing if true because they’re on the cutting edge of doing a lot of stuff. So you can replace this middle level software engineer at Meta. How many software engineers can you replace as somebody that isn’t staying at the very cutting edge? Yeah.

So that is super interesting. Okay. We have about one minute left. Any questions from the audience? Okay.

Then I will call it there. Thank you very much.

Tal Jacobson, CEO, Perion: Thank you very much. Thank you.

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