Integral Ad Science (IAS) beat its earnings and revenue estimates for the second quarter despite belt-tightening among advertisers and fallout from the recent TrueView scandal.
The company, which reported its Q2 earnings on Thursday, saw revenue increase 14% YOY from $100.3 million to $113.7 million, topping the street’s projection of $111 million.
Meanwhile, optimization revenue (which IAS previously called programmatic revenue) rose 10% YOY to $52.8 million, measurement-related revenue grew 23% YOY to $44.9 million, and publisher revenue ticked up 1% YOY to $15.9 million.
Although IAS CEO Lisa Utzschneider described 2023 as a “year of efficiency” (sounds familiar!) characterized by marketers taking a more ROI-focused approach, ad spending cutbacks have a less pronounced effect on the demand for brand safety and suitability, viewability and invalid traffic (IVT) measurement.
Regardless of the macroeconomic environment, ad impressions still need measuring, after all.
But that’s not to say IAS isn’t playing defense to protect its reputation.
Advertisers were shocked by revelations in June that more than three-quarters of YouTube TrueView ad campaigns allegedly run on low-quality, non-YouTube inventory through the Google Video Partners (GVP) ad network.
IAS, which is a YouTube measurement partner, has measured GVP placements for viewability and IVT since 2016, but only added brand safety and suitability measurement for third-party sites on GVP to its media quality product last month.
This addition, which is aligned with the Global Alliance for Responsible Media’s brand safety standards, gives advertisers more visibility into the content their ads run against, Utzschneider said.
TikTok don’t stop
The TrueView exposé forced IAS to put transparency front and center to soothe aggrieved advertisers who feel deceived by YouTube. But it’s far from IAS’s only focus. Another area IAS is prioritizing this year is social media measurement, because social is where the users are.
“We’re doubling down on measurement in social platforms,” Utzschneider said. “That has been a major tailwind for our business in Q2.”
Social media revenue made up 18% of IAS’s Q2 revenue and 47% of its Q2 measurement revenue. TikTok and Meta both contributed to its quarterly social media revenue growth rate, up from 25% to 33%, said IAS CFO Tania Secor.
IAS now measures media quality on TikTok in more than 30 markets and aims to be in 40 markets by the end of the year. The number of postbid TikTok campaigns that IAS measures went up 78% from Q1.
Beyond TikTok, IAS also began supplying viewability and invalid traffic measurement for Facebook and Instagram Reels in June and for YouTube Shorts in July.
The rule of three
Social aside, IAS is also eyeing other shiny objects, namely CTV, retail media and artificial intelligence.
On the CTV front, it became the first company to receive Media Rating Council accreditation for CTV viewable impressions and CTV-rendered impressions in May. In June, it integrated its invalid traffic prebid filters and postbid measurement with Roku’s OneView DSP and debuted its CTV-specific, video-level brand safety and suitability measurement tech with Iris.TV.
As for retail media, IAS integrates with nine of the 10 top retail media networks, according to Utzschneider. It also recently announced a partnership with Uber to ensure viewability, brand suitability and a lack of ad fraud for Uber’s Journey Ads campaigns (Uber also partnered with IAS rival DoubleVerify on this initiative). And it’s working with Criteo to measure viewability and invalid traffic for Criteo’s video network of retail media partners.
And IAS isn’t sleeping on AI.
It uses AI to classify video content in live social media feeds as brand safe or not based on a real-time frame-by-frame analysis of images, audio and text. Thanks to AI, IAS was also able to make its media quality classification technology available in more than 90 languages, Utzschneider said – a big leap from the four it offered earlier this year.
“AI and ML are in the DNA of this field,” she said, and it’s at the heart of “everything that we do from a tech and innovation perspective.”
But is IAS going to follow its top competitor DoubleVerify’s lead and acquire AI-focused ad tech? DoubleVerify bought AI startup Scibids earlier this week.
Time will tell. Utzschneider didn’t address the Scibids acquisition.
