Q1 2020 Earnings Call
[music].
Good evening My name is Brent and I will be your conference operator today at this time I would like to welcome everyone to do you can trust first quarter earnings Conference call.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question answer session. If he would like to ask a question during that time simply press star followed by the number one on your telephone keypad.
He would like to withdraw your question press the pound key. Thank you Jane Penner head of Investor Relations for Pentrust you May begin your conference.
Thank you Frank.
Good afternoon, and thank you for joining US welcome kept interest earnings conference call for the first quarter ended March 31st Twentytwenty.
Joining me today on the call our bench Silberman, our president and CEO and Todd Morgan tells our Chief Financial Officer.
Now I'll cover the safe Harbor.
Some of the statements that we make today regarding our business and financial performance in operations, including the impact of Cobiz 19 pandemic, maybe considered forward looking and such statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Our results for Q2, Twentytwenty, our preliminary and may not be an indication of future performance.
We are making these forward looking statements based on information available to us as of today and we disclaim any duty to update then later unless required by law.
For more information please refer to the risk factors discussed in our most recent form 10-Q, four 10-K filed with the FTC and available on the Investor Relations section of our website.
During this call we will present, both GAAP and non-GAAP financial measures a reconciliation of non-GAAP to GAAP measures is included in todays earnings press release and letter to shareholders, which are distributed and available to the public through our Investor Relations website located at Investor Day Pinto.
Just inc. dotcom.
And now I'll turn the call over to that.
[noise] good afternoon, and thanks for joining us today.
Obviously, the world's changed a lot since we did or last call back in February.
I haven't heard tire company I just want to thank all the heroes out there who are helping people through this tough time.
Like every person in every business, we're figuring out how to manage and work through the current health economic crisis.
And that starts with making sure employees are safe and healthy.
It also means ensuring that can trust as a valuable resource for people as the adjusted to life fitness new reality.
Over the last month and a half we've learned that our mission, bringing everyone inspiration to their lives has never been more relevant than it is right now.
Over the past weeks, we've seen record high engagement from existing users resurrected users and new users.
Prior to Cook at 19, we saw gains driven by product investments that are detailed in this quarter's in past shareholder letters.
The stay at home orders that began in mid March significantly accelerated this trend.
When the Koeppen crisis began we immediately prioritize the safety of our users by helping them find reliable health information during the pandemic.
And if people stopped practical solutions for challenge has created by the crisis. They discovered new ways to use Pinterest and also deepen their existing uses of surfaces.
They search for things like recipes for freezer friendly meals getting ideas for home schooling.
Researching home Jim equipment, we're figuring out how did you hear cuts from home.
We're proud to Pentrust is helping people all over the world get through this difficult time.
We're also working with advertisers is the adjusted this new economic climate.
The quarter began with a continuation of the strength we've seen in Q4.
But the pandemic began to impact our business during March.
As offline stores close around the world, many advertisers slowed where pause to their advertising spending on interest.
For those advertisers that pause, we're sharing or insights to help them plan and eventually reaccelerating reactivate their spend.
Interest where consumers have always looked for ideas and playing their lives and we're offering see imos valuable insights to help the decide how to spend their 2020 budgets.
For those advertisers that continue to spend we've seen a shift away from awareness campaigns and towards highly performing adds an area. We've invested heavily in over the past year.
As a result or conversion optimization efforts in shopping ads are much bigger part of our product mix dates and they were a year ago.
These ads are delivering real value to marketers with ROI accountable objectives, particularly as painters engagement with shopping surfaces has increased significantly over the same period.
Finally, well, we're working to help Henderson advertisers to this current crisis, we remain firmly committed towards long term strategies.
We continue to invest in our vision to be the home with the Internet's list inspiring content.
To help users discover more ways to use interest in their lives to let penders easily purchase things may find on our surface and to create value for much more diverse base of advertisers.
We had the benefit of having a balance sheet that allows us to continue to pursue these outcomes.
As you know we withdrew annual guidance, because we have limited visibility into future advertiser demand.
That remains the case, but Todd and I will continue to provide as much transparency into our current business as possible as things evolve in the coming mobs.
With that we'll turn it over to keep today.
Brent we're ready for our first question.
Your first question comes from the line of Ross Sandler with Barclays. Your line is now open.
Oh, Hey, you guys just.
Couple of questions first as a can you tell us what you're seeing those far into Q and if we look at your retail Advertiser category. How would you the revenues coming from digitally native ecommerce companies versus retailers that have a big offline stores programs.
As you talk about what you're seeing I guess broadly across retail and CPG. Thus far in Twoq and then second question is then you mentioned a in the letter the usage dipped a little bit in the early days or the corn team and you just mentioned there were now seeing like record engagements. So is it.
You to record means a lot of things given that you guys are growing I.
I guess the question is or EMEA, you growth roots accelerating.
In April or some way margin and into April I was result of a.
Oh, good relative to the 6% us growth rooted in 34% International gross written one queue. Thanks a lot.
[noise] sure I'm, just wondering I start with your second question on engagement and then titled talk about outlook in Q2, and some of what we're seeing in retail CPG.
So you know as mentioned in the in the shareholder letter went a pandemic first started we started initial depending catchment as people just got prepared and then we saw steadily rising engagement.
We saw that across both brand new users. So roughly 50% I think it should we saw were from people that were due to pin Trust. We also saw significant growth amongst existing users by me and resurrected users. So across all fronts, we saw really strong engagement.
We've talked in past calls about how we look at a basket or different metrics across all those metrics. We saw I'm pretty significant increases. So for example, I am searches were up more than 60% year over year.
New board creations, which to us indicates that people are using interest for new use cases were up 60% year on year Pinner views on their own boards that was also up 60% and then we continue to see strong growth.
In the usage of video, which is been a longstanding trend.
As we look forward into April.
There are probably two aspects first we would expect overall for there to be a slowing it that growth. It's just as people spend less time online.
At the same time.
The things that we typically look at which are the indicators of sustained user engagement things like people, creating brand new boards I'm doing searches across multiple use cases those early indicators look really strong. So we do expect to retain somebody that engagement, but not the same rate.
It's obviously an unprecedented situation. So we don't know exactly how that from that out.
But we've been really excited about the growth that we're seeing across the board and want to make sure that we're continuing to served us pairs going forward.
[laughter] Todd I can turn it over to you.
Yes, sure so Ross I heard a couple of questions in there one was.
An update on what we're seeing into the early part of Q2 through April.
And the second was a little bit more color on what we're seeing in terms of vertical impact.
And I'll take those in terms so first.
On the revenue side through the course of April.
We're still obviously in the middle of a highly uncertain environment driven by Cobot 19, and so what we wanted to do on this call was sure what we know.
We've actually experienced.
Rather than project things that we don't yet know because of the amount of uncertainty in the markets.
We had a very strong start to Q1 that persisted through January and February but as we noted in the letter we had a sharp deceleration in year over year growth trends that really started in earnest in mid March.
That sharp deceleration persisted through the the latter half of March and then we began to see stabilization in our revenue year over year revenue growth in early April.
That stabilization persisted through the course of the month and into early May.
To quantify that a bit further our revenue for the month of April on a year over year basis declined 8%.
And what I want to note here is it as a reminder, if you remember the call from a year ago.
Around Q2, we talked about Easter timing and a year ago in the month of April.
Easter provided a little bit more than an extra week of benefit.
So on a normalized basis, we're probably a point or to better than the 8% decline that we noted or experienced in the month of April.
So that's the April trends point on the vertical piece.
The impact has been uneven across the verticals where were in market and that's not shouldn't be too much of the surprise because the impact of the pandemic, it's been relatively uneven across verticals as well.
Our major verticals CPG and retail I'll pick those I think you highlighted those it's too that you wanted to get more color on into CPG space things like food and beverage health.
And beauty.
Had relatively better demand in the early part of this crisis because people were preparing to shelter in place in their homes.
But even those advertisers began to experience supply chain difficulties that had various impacts on their their appetite for spend.
In retail the impact was a bit more pronounced you might imagine that omni channel retail stores or omnichannel retailers that have stores that were closed had a significant pulled back on spend whereas direct to consumer brands grew relatively faster in fact, our direct to consumer.
Advertising cohort grew significantly faster than the rest of the business.
But those advertisers as we've noted historically are not a huge part of our revenue mix.
We've also noted historically that some of the most impacted verticals areas like travel automotive and restaurants were significantly impacted but those constitute relatively smaller exposure for us.
So hopefully that gets to your two points on recent revenue trends and some of the color around our vertical exposure.
The only thing I would add there just one extra point.
And you didn't ask Ross, but it's probably worth noting that.
We have these joint business partnerships that we sometimes sign with.
Perspective advertisers. So these are not contracts to spend but there are indications of intend to spend.
And we solve a number of those deals grow over the course of Q1 this year relative to last year and the dollars covered by those agreements more than doubled year over year. So.
That was a good indication of intend to spend across our advertising base and that that trend has persisted even through April we've continued to sign some of those deals so.
Wouldn't want to over index on what that means because none of those deals are a contractual obligation, but we're still very actively involved with major retailers and seeing seeing good intent there.
Thanks, a lot guys.
Your next question comes from Mark Mahaney with RBC. Your line is open.
[noise]. Thanks, we tried to questions that new users that are coming on is it too early to know.
What their experience is gonna be like their level of engagement as like versus prior cohorts Secondly, I.
I think you've been asked us in the past, but would you how would you characterize your mix of awareness versus performance advertisers and I'm sorry third quick question. When you talk about Opex growth outlook in Q2 lower than the growth lower than in Q1, do you mean, not on a GAAP or non-GAAP basis. Thank you very much.
Great. So I don't know Ben if you want to talk a little bit about the new users and engagement and I can take the the second to on.
Random performance and expense guidance.
Sure so our new users.
We continue to see really similar behavior across those new users. So.
A lot of the reason they were coming to interest were things that were directly related to I Cook in 19, so things like meal preparation, making your home more livable.
Interest and things like home and garden I until those topics look really similar and as I mentioned earlier the engagement trends from those folks looks promising.
Meaning that our they're taking all of the actions that in the past have helped us predict whether user would be a long term user now the situation is different so we have to wait to see what that looks like.
The other thing that's worth noting is that we continue to see strength from especially younger users. We mentioned this in the last call, but we're seeing really rapid growth in the population of users that are under 25, I wish we take as a positive sign because indication that we're kind of expanding into new demographic.
[laughter], how do you want to talk about the performance mix and topic yeah. Yeah. So marked the second couple of pieces of your question here on the the format.
What we've talked about in the past is that we are a majority performance business.
And a minority brand flash awareness business just in terms of revenue contribution.
And I'll go into little bit more color there, but we've invested in a full funnel ads business and the recent reason we've done that is because of the mindset that our users brain.
When our users come to Petrus they come with commercial intent, they're coming to plan something that they want to do when they're real life. When they go all the way from.
Discovering an idea or being inspired ultimately in many cases to buying something.
The second thing it's worth noting is advertisers tell us that their spend as ever more returns accountable, we know that advertising spend the long term trend in advertising is that it's ever more ROI accountable.
And so it's been very important for us as we invest in our ads product to build measurable value for conversion oriented advertisers.
We saw some trends around our conversion optimization and shopping products that grew much quicker than the rest of the business.
Reflecting the attributable conversion growth that we continue to see spike.
Through the course for the quarter and into April.
And we've been investing in that in three ways, our tools and automation, we rolled out I think weve added in the letter that we had automated bidding for our traffic objectives, which improved click delivery on the same budget, which was an important innovation and one that will extend to further products as the year unfolds.
More work on creative and formats and against measurement, what we're showing more conversion activity against different attribution windows and better offline to online conversion matching so that coupled with all the tag integration work that we've been talking about for some time is leading to a stronger performance business.
So going back to your question, we continue to be performance heavy in terms of mix or the majority of our business is performance versus brand flash awareness.
And we saw significant improvements in our conversion optimization and shopping product format over the course of the quarter.
The automated the bidding automation improvements that we made had a big impact on our traffic business as well, but that was in flux over the course of the quarter. So hopefully that gets to your question.
On what we're seeing in formats.
On the Opex growth piece I'll answer two questions. One you Didnt answer it didn't ask but I think it'll probably come up on the gross margin piece.
I just wanted to remind folks that our cost of revenue for the business really is more tied to the number of users the depth of their engagement and usage along with product complexity. So this isn't.
Our cost of revenue doesn't scale with revenue it scales with the number of users and their engagement.
So we wanted to call out.
I'm just to make sure there was no daylight between the way we're viewing our gross margin performance through the year in this.
Market environment, where engagement trends are spiking at exactly the moment when the demand picture is more mixed.
On the Opex side.
We continue to focus on and are excited about the long term opportunity in front of us as a business. We believe in the potential of Pentrust and as a result of that.
We're staying focused on the four big pillars of investment that we opened at the started the year.
Investing in inspiring content.
A more used cases for users.
And improve shopping experience and diversifying our advertiser base so.
We will continue to invest in those things and the reason we're investing.
In this environment is one we believe in the long term potential the business, we think that that remains unchanged.
We have the balance sheet to do it with a billion seven in cash and a 500 million dollar undrawn revolver.
And we believe that in this market environment retooling things like travel event spending and marketing will allow us to dialed back the growth of our investments prudently, while we still invest in the core strategic pillars that will drive long term value.
Sort of market that gets to your question you also asked about non-GAAP versus GAAP.
That was that was designed to be more of a non-GAAP comment.
Okay. Thank you very much.
Your next question comes from the line of Mark smaller whispered seen your line is open.
Yes, hi, Thanks for taking my question, you know I think I think that little bit more.
The performance in particular, some of the bottom of the funnel initiatives that you're working on a you know I know recently, you know you've launched the thought shop inserts shop them and others to understand a little bit about what fraction you're seeing there any response back from advertisers.
Uptake anything like that would be very helpful. And then secondly internally do you think about your resources when resource allocation, we've heard from others about.
Shifting around resources to where there's demand today, which seems to kind of skew towards direct response performance or anything you can share around that would be very helpful. As well. Thank you.
Sure I get it started on the shopping we've outlined.
In past calls that we kind of have a three part shopping strategy. So the first is that we want to continue to grow high quality inventory and we have two projects against that our catalog floater.
And we didn't really excited you know we've seen catalog uploads increase at 140% sequentially.
And that's buoyed by both the partner with shop partnership with Shopify, which is now generally available U.S. and Canada.
Well as the verified merchant program I mean, we've welcomed kind of boasts a traditional omnichannel retailers folks like crate and barrel.
As well as you know lots of emerging brands folks like May trade. So that first part of the strategy is really got that.
Then you asked specifically are we getting traction with users and we'd really measure that by building. These new shopping surfaces somebody once you mentioned shop from boards shop from search and look by the end of February painters engaging with that shopping content had increased 44% inorganic traffic to retailers has increased more than.
Qx about 2.3 times and so we're really happy that I'm printers are seeing more value and then advertisers and retailers are seeking out in the home a traffic.
And then the last part of that story is really what ties together. The first part of your question about shopping with some of your second part of your question around a more performance based products, but we do see that shopping revenue.
Is growing faster than the rest of the overall business mix, it's almost doubled year over year over year I'm looking at Q1 I'm in we're building a lot of things to continue to support that more performance oriented conversion oriented on mentality that includes investments and things like measurement. We continue to look at tag integrations and.
Hi Tech integrations from third parties are up to acts that also means more automated products and so Todd mentioned that we provided tools and automatic bidding around traffic objectives.
We're really excited and the future to bring that to our conversion MRO CPM objectives as well I haven't so that's how we're really allocating resources I wouldn't say, that's a huge divergence.
From our strategy, which has been about enabling more conversion like activity.
But we're doubling down there, especially in the current environment.
Your next question is from Justin Post with Bank of America. Your line is open.
Great. Thank you I guess two quick questions [laughter] outside is the AD spend on interest to events. Just wondering how you think about that obviously you said it mostly perform at a higher percentage performance based but how does that relate to events and then I you know I remember last year in Twoq, you had a nice acceleration around the IPO.
[laughter], which was in April and also a very robust Easter. So wondering if that's affecting your comps.
At all as you as you look at what you provided for your problem. Thank you.
Yes, I am not.
The first question around AD spend tied to events.
What I would say that we've called out and continue to experience or something a little different perhaps another platforms, but.
We people plan well in advance of you know if he did you come with a planning mindset in commercial and tend to Pentrust, often planning well in advance of said event or seasonal moment.
But I think your question is more about a events that may be postponed a in this environment.
Than what we typically experience and what I'm, referring to specifically or things like seasonal moments that we called out in Q4, Halloween Thanksgiving and if you're holidays, we had a lot of strength through Q1 around events like new years day Valentine's day, the big game etcetera, and so while some of those seasonal moment can get delayed.
In this type of environment.
Or the shape of spending may maybe altered many of them are driven by the calendar. There there are moments that people plan for their their personal and family lives.
The second part of your question was around the Q2 dynamics that we called out last year, we really reference to things that we thought led to some of the strength that we saw last year, when we accelerated or we accelerated our revenue growth just 2% on a year over year basis.
The first to those with Easter timing.
And I may get the dates wrong, but I think a couple of years ago Easter was on the first.
Vapor all last year was on the 20 Onest of April and this year was on 12, and so as Easter moves around.
Back to the first part of my answer Easter is a seasonal moment that many advertisers want to get in front of our users as their planning.
For that holiday events.
And so because that holiday moves around it has a different impact year to year.
On Q1 in Q2 performance and last year. It was much heavier in Q2.
Than it was this year for example.
We called out a moment ago, I think that's probably a point or to have a growth headwind that we're experiencing right now so while were down 8% in.
In the month of April, there's probably a point or two that's related to Easter.
There may be even more related to the IPO, but it was tougher to quantify that a year ago and so we didn't want to do it here.
Great and maybe one follow up because when I when I'm in advance and then a personal events like wedding planning or get Togethers around Easter just wondering how that might be affecting.
Second activity.
Well I think it you know I think the AD dollars follow people in their planning activities and that's why we've seen mixed amounts to spend to the extent people are planning for how to home school their kids out of how to exercise in their home.
How to teach themselves how to cook.
Those are new events that were seeing some spend deviate tort and away from things like wedding planning travel events et cetera.
One of the things we've seen over the course of the last several weeks is been reference that engagement dipped a little bit as people were planning to shelter in place when all the news initially broke.
And then started to come back and we reached record levels because folks were trying to train themselves how to operate in this new environment and so for an advertiser like Nordic track. That's a great thing people are trying to figure out how to exercise in their home and there's a lot more spend opportunity for some brands like that relative to those that maybe on the travel.
Segment or around weddings and other events.
Thank you got.
Your next question comes from Lloyd Wamsley with Deutsche Bank. Your line is open.
Thanks, Todd kind of going back to their recent trends questions and the down eight you called out you know it involves a little bit a guesstimate on mix by month, but assuming marches bigger. It implies January February grew about 44% does that does that number sound right.
And then and then secondly, going back to the automatic bidding you always you rolled that out for conversion objectives, how how meaningful could that be and maybe what percent of the business today.
Is targeting conversion optimization and how do we think about that improve performance from automated bidding ultimately translating into into higher spending budgets and anything you could share there would be helpful.
Yeah. So on me.
You know them out that you're doing it.
There are a number of factors involved and we saw.
The growth was in the kind of low to mid Fortys and it accelerated a little bit in February because we had an extra day.
In February and then we saw the impact start to unfold early in March, but really take off in a material way mid March.
And so I don't think you're too far off with your math and your assumptions.
With respect to the impact on.
Of auto bidding on our conversion optimization product I'd say, it's too early to know we've seen a a positive impact on.
Tropic objectives, we've seen a significant increase in budget utilization.
A significant uptick in number of clicks per budget and even click through rate.
But it's too early to tell because we haven't yet rolled it out for conversion optimization. We are optimistic that that it's the right thing to do and will deliver value to our advertising partners and help us with budget utilization, but until it's rolled out we won't know much to just there.
Okay. Thank you.
Your next question comes from the line apiece, Terry with Goldman Sachs. Your line is open.
Great. Thanks, I'm, just wondering if you could give us a sense or help us understand sort of the make up your performance advertisers a little bit better.
Obviously, there's a broad spectrum of advertisers that are engaged in performance and a lot of a lot of gray area there but.
You could give us a sense, it's sort of.
What what the the spectrum looks like in terms of in terms of size in terms of what you would consider to be outperformance advertisers that kind of following a premium the ones that have access to enter salespeople and third party measurement versus something that might fall into into kind of more the.
You know almost resonate category of of performance advertisers.
And particularly in this environment sort of where you're you know where you're seeing maybe differentiation in the a in the performance of those those two categories, which whose whose most most active.
And where you're you know where you're seeing on returns fluctuate though.
[laughter] Heath I I can take a cut out and how can chime in as well like the ask it was really about the composition of the performance advertisers and how we're seeing that behave differently. So.
As you know you know we started off with a lot of large omnichannel retailers. So what I would say is that on average.
Those folks had been the first a pause spend when they close stores and then when they do reactivate we've seen some folks reactivate they tend to first reactivate their most perform at objectives and are holding off on brand objectives in general so they're really using our products like go CPM or traffic objectives in a driving autonomy.
I was kind of ROI accountability there.
Then an effort that's been going on all year, and we'll continue our what I call more midmarket advertisers.
And.
Those are folks, where they're often very sophisticated advertisers, but they don't have a dedicated sales force. So when we talk about some of the product investments that we've made this year.
Last year was really about very small businesses, providing mobile interfaces on this year has really been about tools and automation to help those folks scale and the example of automatic bidding on the Todd provided it's a pretty significant one.
The reason, it's significant is because not only do you get the benefits of efficiency the Todd mentioned like.
Deals with an example, advertiser they saw 47% increasing clicks with the same budget and a higher ctr, but it also means that they're doing a lot less work. So they don't need a dedicated sales person to be managing their budgets.
We don't have as many of what you would describe as as remnant inventory into advertisers, but overall performance objectives have grown faster both because of the macroeconomic environment on the kind of a return to performance and the fact that when brand budget exited decreased cost.
Per a conversion rate you had fewer people on contending for those same conversion objectives that people can get more value and we take that is actually a really good a really good sign ups, what we want to take the business in the future.
Great I guess when one follow up to that is when you. When you look at the the mix of your performance advertisers that are focused on are primarily buying sort of minimum.
In advertising, maybe that's another way to think of kind of the the remnant buyers that are that are that are out there.
You know what what percentage of your your average and I'm not expecting actually give a percentage, but when you look at the mix of your your performance advertisers how much would you say, we're sort of focused on that that minimum bid inventory that's available there [noise].
How have you seen that you know as you've been able to attract more premium performance advertisers overtime and nicely my on filled with ads for Apple TV, which you know I would've expected that would've been there a year ago variety of reasons, but when you see more premium or performance advertisers coming into the mix how would you say that.
That that has shifted away from those sort of minimum bid advertisers.
[laughter], Yeah, I mean, I think so what I hear you getting at is like how many folks have very very low cost per acquisition.
Can still make money and how many is higher ones everyone is actually minimum did the nature of an auction that no one wants to pay more than demand is but I am look as we grow the number of advertisers on their more and more folks that have.
And the ability to get a lot of lifetime value out of out of an acquisition I mean, so we expect that you get more liquidity that will increase.
Prices over time.
And our job is to provide as much value as possible so things like automatic bidding.
In other efforts to improve machine learning and targeting I'll provide more efficiency for advertisers across the board.
Great. Thank you very much.
Your next question comes from Seeping into with Credit Suisse. Your line is open.
Okay. Thanks, very much so I guess one of the interesting disclosure points at the time of the pre announcement was that there wasn't much in the way up a travel related sector revenue.
Despite what we have understood to be one of the main use cases for your users.
So right now the travel scepter is lack of presence ended up being less of a headwind for you, but you know what has been holding piece advertisers back until now and what can you do to onboard them as fee eventually recover from this crisis.
And secondly, the letter you talk about hundreds of merchants lined up to join shopping so from an operational standpoint, how long does it typically takes on board and interested party into shopping and you don't wants they make a decision.
To start spending what picturesque thank you.
Yes, Stephen Your first question was really about travel and I think that the reason that travel hasn't been as large of a sector. As it is a use cases because the vast majority of travel is very focused on last click acquisition travel So think I'm expedia advertising on Google.
Building machine I think that the way to unlock that is too.
Do what we've done for many verticals, which is showed the disproportionate value catchy people early in travel inspiration planning and then bringing them down.
Closer and closer to a transaction.
I will say that when we look at our plans for increasing I'm kind of purchasing activity on controls travel is not the first place that we're optimizing for how we think theres, a really big opportunity I'm in a lot of our core shopping verticals, which is why shopping.
And conversion driven events continues to be a focus so think about things like home decor apparel in general shopping there's a huge opportunities take people from getting ideas all the way down to buying things and that's really the thesis.
Bill on the shopping efforts.
Your second question is how much easier has forgotten.
For people to get onboard with a shopping program.
And I would say that we're really proud of the progress we're always trying to remove friction from that.
But you know one evidenced if this is that we've just seen significant increase the number of people I've never uploading or catalogs and we're also seeing benefit from third party.
[noise] integration, so I mentioned before that the Shopify partnership is now live in U.S., and Canada and that means that a midsized retailer that seasonal platform like shopify can get on board and they're not touching the code of their ecommerce site. It's an option if they can select which gets the right measurement and.
Place and get their catalog uploaded and put them in a position where they can begin advertise it really easily so there's always more work to do there and particularly for large advertisers.
We not only have to make a technically easier, but we also have to wait for them to get out of complete shelter mode, where they may not be touching anything on their site as they have a lot of their stores closed, but we're moving out friction and getting as many people see mostly kind of uploaded through our catalog and through our first party measurement is a long term strategic priority for the company.
Thank you.
Your next question comes from Doug Anmuth with JP Morgan Your line is open.
Thanks for taking my question I'm, just wanting to go back to the performance on a discussion on performance based advertising. So we've seen some other AD businesses in the last week or two that are majority performance based that obscene less of a slowdown in this environment.
So just curious what your views on why the variation in deltas and do you think that's based on the verticals or categories in which you're advertisers lie or perhaps just on the earlier stage nature and perhaps a smaller number of advertisers. Thanks.
Look I think said you know it has to deal with that makes it advertisers that we've got.
So.
You know one even performance based advertisers are some verticals that are disproportionately impacted as well as some larger.
Kind of there sorry, there's some verticals that are disproportionately impacted and then depending on that the size of the business they may be impacted more or less by physical store closure. So.
Part of the reason that we have a long term strategy about increasing the number is so we're not relying on any particular I'm sizes appetizer or any particular vertical I'm over time, but I think that you're going to see varying gearing changes across the different.
Ah advertising platforms.
And a lot by this mix by the nature of advertising map in place.
Thanks Bye.
Your next question comes from Michael Levine with pivotal research your line is open.
That's not going to further question on the on the shopping feed side [laughter] win.
When advertisers choose not to do do so not participate because it feels like it's one of the key things you guys could do to close the loop I mean, I'm I'm curious what the with the pushback is I guess I'm, a little bit intrigue by Google announcing their P.L.A. program and I'm I'm wondering if this is something you guys would be able to the leverage greater.
Greater people participating and can you know just cataloging their feet.
Yes. So the question I heard was what's the objection that we hear most often I think that's changed over time. So initially the objection was how easy is its get my catalog and measurement implemented.
And as we've improved on that we brought in more and more those retailers I think that.
Candidly now for some of the larger advertisers are into larger retailers. It's just.
Getting on our radar and giving them the time in space to do those integrations, while you Gotta remember a lot of the folks, especially the omni channel folks like they have all of their stores close I mean, so they're not investing a lot of incremental time.
But we take the Google expansion of P.L.A.'s into.
Making them free as actually kind of a validation of the strategy will be pursuing for a while which is we want to welcome as much high quality inventory and then connect that to people who are browsing state and we think that but the big player like Google We can kind of ride that trend to continue to scale up him out of inventory that's available.
There are no further questions at this time.
[noise] [noise] [noise] in that case, I think we're ready to close the call and I'll hand, it back after that.
Yes, I just wanted to thank everyone again for taking the time to join US. We appreciate the questions and we look forward to continuing the conversation down the road.
[noise] had a good day.
Okay.
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