Direct Digital Holdings, Inc. (NASDAQ:DRCT) Q4 2023 Earnings Call Transcript

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And so we work with roughly about 20 to 25 different DSPs, and not all DSPs treat data the same. And so the new paradigm that we’re actually seeing is that we are adjusting how we treat each DSP differently. And we think that, that is really part of what’s fueling a lot of the innovation that’s in the marketplace today. So I think for the last half of the year, the more that you’re able to customize and work specifically with certain DSPs, and we are actually in conversation and already running different tests and POCs with them, that is going to give us a competitive advantage in the future, and that’s really what we’re looking to capture.

Michael Kupinski : Thanks, Mark. And I was just wondering, in terms of the performance metric that these advertisers are getting, let’s say, the ROI on the advertising. Has that gone down as a result of changes in the deprecation of the cookies and things like that?

Mark Walker : I think every marketplace is saying something different. We have not experienced the degradation of campaign performance from the conversations that we’ve had with our clients as clients continue to work with us. And so our anticipation is that there will be different workarounds when cookies completely go away, as it relates to campaign reporting. And that’s one of the things that we’ve been working towards with our tech team and with different partners to make sure that the reporting capabilities as well as the degradation of the campaigns actually doesn’t occur and actually the quality stays intact. So that’s been an important proof point that we’ve been working with our clients on.

Michael Kupinski : And in terms of the most valued publishers that you work with, how — where do you think they are in terms of this cookie-less environment and implementing and planning for it because I know we talked about this in the past. But I was just wondering, do you feel like most of the publishers have already kind of adjusted for it at this point? Or what are your thoughts?

Mark Walker : Yeah. I would say, I think that the more — the larger publishers have started making the transition as what we have seen and what comes through with the partners that we work with. What we’re seeing is the smaller to midsized publishers are a little bit behind or they are behind. And so I think that the small to mid-size publishers have a lot of catch-up to do in comparison to some of your larger, more sophisticated publishers that are out there in the marketplace. I think what you’re going to see in the future come Q3 and Q4 is really a bifurcation of the marketplace as it relates to publishers that have the means and the capability to make those type of adjustments of going to alternative IDs and working with privacy sandbox.

And they have ones that can’t. And there — that’s really the opportunity that we think we can provide to the marketplace is helping those publishers that are the mid-tier publishers who might not have the means or capability and work with privacy sandbox or alternative IDs. And we’re there to fill the gap for them.

Michael Kupinski : Got you. Thank you. That’s all I have.

Mark Walker : Thank you.

Operator: Thank you. That does conclude today’s question-and-answer session. I would like to turn the call back over to Mark Walker for any additional or closing remarks.

Mark Walker : All right. Well, thank you very much for joining us for the Quarter4 and full year 2023 results, and we look forward to talking to you at the end of Quarter1.

Operator: Thank you. That does conclude today’s presentation. Thank you for your participation today. And you may now disconnect.

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