The digital ad industry faces growing challenges from stricter data privacy policies and the decline of cookie-based targeting. Meanwhile, Viant is turning these obstacles into opportunity. In today’s FA Alpha Daily, we explore how Viant’s Optimizer tool and its Holistic Platform are strategically positioned to drive its growth trajectory amid fierce competition.
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When sectors face downturns, investors often sidestep the entire industry, assuming all companies are struggling.
This makes sense, but it can also mean missing out on promising stories within that same sector.
The advertising sector is a prime example. As consumer demand fluctuated, advertisers pulled back, leading to a significant drop in ad tech stocks.
But some companies adapt, finding new ways to solve problems or meet new privacy rules. Even in a tough market, these companies can stand out, offering solid opportunities that go unnoticed by those who avoid the sector entirely.
Viant Technology (DSP) is a digital advertising firm that aims to optimize marketing effectiveness for its clients.
The company leverages both AI and people-based identifiers, setting itself apart from cookie-reliant competitors.
One of its notable solutions is the Viant Data Platform, which provides marketers with the autonomy to control and analyze their data, helping them run campaigns with greater insight.
Additionally, Viant’s AI Big Optimizer tool allows advertisers to predict and lower media costs based on historical data, while its Household ID solution compiles information from multiple devices within a household, enabling advertisers to engage more effectively.
Another significant tool the company provides is its Holistic platform, which allows clients to manage multi-channel campaigns and offers metrics for each channel, from in-store visits to online interactions.
By combining both personal and digital identifiers, Viant’s people-based approach allows the company to adapt to stricter data privacy standards while maintaining effective ad targeting.
The digital advertising industry is currently facing issues. Policies around data privacy and the use of third-party cookies are tightening, making it harder for companies to rely on traditional, cookie-based targeting.
Viant’s people-based solutions stand out because they don’t require cookies and are not bound by the same expiration limitations, making them more resilient to regulatory changes.
In an environment where big tech platforms like Alphabet (GOOGL) and Amazon (AMZN) largely control digital identifiers, the company’s unique use of people-based profiles allows it to offer advertisers alternatives that are more privacy-conscious and adaptable to future changes.
Viant’s innovative approach has helped it tap into high-growth markets, particularly Connected TV (CTV) and streaming audio.
As traditional linear TV budgets migrate to digital platforms, the company’s focus on CTV has been instrumental. In Q1 2024, the company saw a 28% revenue increase year-over-year, fueled by a 50% rise in CTV ad spending.
Viant has been able to gain market share in CTV, partly due to its Direct Access program, which connects clients directly with prominent CTV players like Paramount and Disney.
Streaming audio has also become a vital revenue source for the company, accounting for 10% of its ad spending in Q1. Advertisers are increasingly drawn to streaming because of its premium content, scalability, and effective targeting capabilities.
Combined, CTV and streaming audio made up over half of Viant’s ad spend in Q1, showing the company’s ability to meet advertisers’ demands for diverse, high-return channels.
However, the market has concerns about the company’s highly competitive environment, contending with giants like Trade Desk (TTD), which may have more resources to adapt to market shifts.
If these competitors leverage similar technologies or refine their approaches, they could erode Viant’s market share.
Another key risk lies in the adoption and effectiveness of the company’s cookie-less advertising solutions. If these innovations fail to deliver results or sales fall short, Viant’s growth could stagnate.
In the long term, however, Viant’s position as a niche player in cookie-less, AI-powered ad solutions provides a solid growth platform.
The company has demonstrated its ability to capture market share and maintain revenue growth, which may continue as it refines and expands its services.
Best regards,
Joel Litman & Rob Spivey
Chief Investment Strategist &
Director of Research
at Valens Research
The Uniform Accounting insights in today’s issue are the same ones that power some of our best stock picks and macro research, which can be found in our FA Alpha Daily newsletters.