Q2 2023 Integral Ad Science Holding Corp Earnings Call
Participants
Jonathan Schaffer; Head of IR; Integral Ad Science Holding Corp.
Lisa Utzschneider; CEO & Director; Integral Ad Science Holding Corp.
Tania R. Secor; CFO; Integral Ad Science Holding Corp.
Andrew Jordan Marok; Research Analyst; Raymond James & Associates, Inc., Research Division
Brian Nicholas Fitzgerald; Senior Analyst; Wells Fargo Securities, LLC, Research Division
Cal Bartyzal
James Edward Heaney; Equity Associate; Jefferies LLC, Research Division
Jason Stuart Helfstein; MD & Senior Internet Analyst; Oppenheimer & Co. Inc., Research Division
Justin Tyler Patterson; Director of Internet and Media Equity Research & Lead Senior Analyst; KeyBanc Capital Markets Inc., Research Division
Mark John Zgutowicz; Senior Equity Analyst; The Benchmark Company, LLC, Research Division
Mark Patrick Kelley; MD & Senior Equity Research Analyst; Stifel, Nicolaus & Company, Incorporated, Research Division
Matthew Andrew Cost; Research Analyst; Morgan Stanley, Research Division
Robert Zeller
Presentation
Operator
Good day, and thank you for standing by. Welcome to the IAS Q2 2023 Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Jonathan Schaffer, Head of Investor Relations at IAS.
Jonathan Schaffer
Thank you. Good afternoon, and welcome to the IAS 2023 Second Quarter Financial Results Conference Call. I'm joined today by Lisa Utzschneider, CEO; and Tania Secor, CFO.
Before we begin, please note that today's call and prepared remarks contain forward-looking statements. We refer you to the company's filings with the SEC, posted on our investor relations site at investors.integralads.com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations.
We will also refer to non-GAAP measures on today's call. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release available on our investor relations site. All financial comparisons, unless noted otherwise, are based on the prior-year period.
So, with these formalities out of the way, I'd now like to turn the call over to our CEO, Lisa Utzschneider. Lisa, you may begin.
Lisa Utzschneider
Thanks, Jonathan, and welcome, everyone, to our 2023 second quarter results call. We reported positive second quarter performance with revenue of $113.7 million, exceeding our prior outlook of $111 million to $113 million. Adjusted EBITDA increased to $37.4 million, ahead of our prior outlook of $35 million to $37 million at a 33% margin. We expect continued revenue growth and strong profitability in the second half of the year, and we are raising the midpoint of our full-year revenue outlook to $462 million.
In June, we were delighted to host our first Analyst and Investor Day. The event highlighted our talented IAS leadership team and showcased our differentiated technology through product demos of our Total Media Quality and CTV solutions. The day also featured partners, including TikTok, Mindshare and Haleon. IAS was thrilled to have these close partners participate as they affirmed our critical role in the digital media ecosystem.
Our partnership with Haleon, formerly GSK Consumer Healthcare, is a great example of how marketers place their trust in IAS. Haleon selected IAS as their global verification provider, going from 4 partners to 1. Haleon leverages IAS' global scale and best-in-class technology for an end-to-end view of their portfolio of over 100 brands in 92 markets.
We also unveiled a refreshed brand strategy at the Investor Day. Our new branding reinforces IAS' standing as a leading global media measurement and optimization platform. Our mission is to provide global advertisers and publishers the most actionable data to drive superior results. As part of the rebranding, when speaking about our business, we will refer to measurement, optimization and publisher solutions, which replace advertiser direct, programmatic and supply side, respectively.
Building on our new business momentum from prior quarters, we continue to win major global client opportunities, often following head-to-head product and tech due diligence against other providers. We're excited to share the news of L'Oreal's selection of IAS as their global strategic partner for ad verification, expanding our reach to encompass over 45 markets worldwide. IAS will be leveraged for YouTube but also to bolster brand safety measures across various other channels, including TikTok and Amazon. L'Oreal's choice of IAS reflects our robust product roadmap's effectiveness, especially within Connected TV and social media platforms.
During the quarter, we drove momentum in the APAC region with recent wins including LG Electronics, a global innovator in technology and consumer electronics; Singtel, the largest telecommunications company in Singapore; and Maruti Suzuki, India's largest automotive manufacturer.
We continue to see results as we focus on the right areas. In social media, we are laying the groundwork for accelerated revenue growth globally. As TikTok, Meta and YouTube launch short form video-based products that are generating unprecedented user growth, we are providing critical solutions for their platforms. We are investing in differentiated technology that is getting smarter and creating a flywheel effect of accelerated growth and increased marketer demand.
We are realizing strong adoption of our Total Media Quality, or TMQ, product for social media platforms as we expand availability into new markets. TMQ uses AI and ML to provide insights into video content in the social media live feeds through frame-level analysis of image, audio and text. Marketers have the ability to monitor the quality of their media buys on social media live feeds and ensure their ads are appearing next to content that is brand safe and suitable. By leveraging AI, we now support over 90 languages globally, up from just 4 languages earlier this year.
In terms of other recent highlights, during the quarter, IAS announced a significant expansion with TikTok of our TMQ brand safety and suitability measurement product. TMQ is now available to advertisers in more than 30 markets. Post-bid TikTok campaigns were up 78% in the second quarter from the first quarter of 2023.
In June, IAS rolled out viewability measurement tools for Facebook and Instagram Reels. IAS will now provide viewability and invalid traffic measurement, or IVT, for Meta's rapidly-growing Reels video feed inventory. Advertisers can verify that their ads are seen by real users. Separately, we look forward to the expansion of brand suitability verification on feed to all brand safety and suitability partners later this year.
We continue to expand our YouTube measurement products to provide advertisers with greater insight into the type of content their ads are shown. We've expanded our TMQ solution capabilities to YouTube Shorts and Google Video Partners, or GVP. IAS is now providing viewability and IVT measurement for YouTube Shorts' inventory. IAS is first to market providing GARM-aligned brand safety and suitability measurement on GVP inventory. Our solution with GVP enables advertisers to share video ads on publisher websites and mobile apps beyond YouTube with confidence.
Retail media advertising is one of the fastest-growing channels and has become a valuable medium for marketers. IAS provides coverage across 9 of the top 10 retail media networks, and we are actively expanding our measurement capabilities and innovating in the space for marketers. We are excited to partner with Uber's advertising division to help validate performance and effectiveness of Journey Ads campaigns on Uber advertising. IAS will verify viewability, fraud and brand safety to enable further transparency to Uber's brand clients.
In addition, we announced our first-to-market partnership with Criteo. IAS will enable onsite viewability and IVT measurement across Criteo's network of retail media partners, so that marketers can reach real users and maximize engagement across this critical channel.
In optimization, we welcomed Sam Cox to IAS as SVP of Product Management. Sam oversees global product strategy and execution for IAS' programmatic and optimization solutions. He brings deep experience in advertising technology and exchange-based trading, and joins us most recently from Amazon and Google.
We continue to develop our attention metrics to help marketers optimize their media spend and achieve targeted outcomes. In May, we announced a strategic partnership with Lumen Research to combine IAS' attention capabilities and actionable data with Lumen's eye-tracking expertise. In June, we launched our Quality Attention post-bid measurement product. Quality Attention is focused on driving quality impressions, boosting higher engagement rates without scale issues and driving higher conversion.
In CTV, the industry continues to grow as more consumers adopt ad-supported platforms. On the measurement side, IAS has received the industry's first accreditation for CTV viewable impressions from the Media Rating Council, or MRC. IAS is the only company to date to have earned this accreditation, as well as also receiving MRC accreditation for CTV-rendered impressions.
IAS partnered with IRIS.TV to launch TMQ for CTV brand safety and suitability, the industry's first video-level brand suitability measurement for CTV. IAS will provide marketers with reporting on CTV buys aligned to the GARM framework. We partnered with Roku to help advertisers accelerate their shift to TV streaming with confidence. IAS integrated its IVT pre-bid filters on Roku's OneView DSP. In addition, IAS supports Roku's Advertising Watermark to combat device spoofing on CTV.
By leveraging our unique Publica assets, including an ad server, unified ad auction and SSAI stitching capabilities, we are helping our publisher customers optimize yields on their inventory by providing consumers a familiar, TV-like ad-break experience. We are excited that Publica is one of the first to be certified as part of Amazon Publisher Services Ad Server Certification Program for streaming TV.
DraftKings recently announced the launch of DraftKings Network and has selected Publica as their primary CTV ad server as they launch into the streaming landscape. Vevo, the world's leading music video network, has selected Publica to help them power their programmatic ad break decisioning globally.
Turning to other areas of the business, IAS strengthened our partnership with Anzu to provide the industry's first measurement solution for 3D in-game advertising. IAS will help marketers monitor and improve their campaign performance by authenticating viewability in 3D environments.
Sustainability is a priority for IAS. Recently, IAS and Scope3 partnered to provide transparency into sustainability reporting. With IAS, marketers can collect and leverage their carbon emissions data to reduce their own carbon footprint and optimize campaign spend to lower emissions.
In addition, Publica, in partnership with The Trade Desk and Index Exchange, released research findings powered by Scope3 data. The results highlighted the benefits of adopting OpenRTB 2.6 to support sustainability in programmatic CTV advertising, indicating an 84% decrease in ad selection carbon emissions for those participating in the study.
We also joined Ad Net Zero, advertising's not-for-profit coalition that is working to reduce the carbon footprint for the advertising industry. Through this partnership, IAS will work alongside the biggest platforms and advertising agencies to drive change and help the advertising industry to reduce the carbon impact to net zero.
In today's environment, marketers are placing even greater scrutiny on media quality and ROI with increased efficiency on every invested ad dollar. We heard this repeatedly at Cannes Lions in June with tremendous excitement around how we are leveraging AI and ML to increase accuracy and efficacy.
Our goal is to meet our customers' evolving needs with a broad product portfolio based on increasingly actionable data. The major media platforms in fast-growing channels like social media and CTV are innovating to create greater engagement for consumers, particularly in video. We are accelerating our product roadmap with these platforms to drive adoption of our offerings. We believe that this may translate into even greater opportunity for IAS at massive scale over time.
To conclude, we exceeded our expectations for the second quarter and look forward to delivering profitable revenue growth in the second half of the year.
And with that, I'll turn the call over to Tania to review the financials.
Tania R. Secor
Thanks, Lisa, and welcome, everyone. We're coming off another solid quarter of profitable growth, ahead of our prior outlook. During the second quarter, we generated double-digit revenue growth and a 140 basis point improvement year-over-year in adjusted EBITDA margin to 33%.
Total revenue in the second quarter increased 13% to $113.7 million. We realized growth across optimization and measurement revenue in the second quarter. Revenue mix for the second quarter reflects increased marketer demand for our measurement products, most notably with the adoption of our social media products outpacing industry growth trends.
Optimization revenue, formerly known as programmatic revenue, grew 10% year-over-year in the second quarter to $52.8 million. Optimization revenue growth in the period reflects maturing Context Control growth in line with our prior expectations, the contribution from new logo wins, and strength in the CPG vertical, partially offset by slower demand from tech/telco clients. We are investing in optimization to drive continued adoption of our offerings. We are enhancing both our product capabilities and go-to-market engine.
Measurement revenue, formerly known as advertiser direct revenue, grew to $44.9 million, a 23% year-over-year increase and an acceleration from growth of 18% in the first quarter of 2023. The impressive growth in measurement revenue was attributable to ongoing adoption of our social media products, the contribution from new and large existing advertisers, higher CTV volumes as marketers increase spend, and open web growth.
Social media revenue grew 33% and represented 47% of measurement revenue in the second quarter, up from 43% in the first quarter of 2023. Year-over-year growth was driven by our measurement solutions for TikTok, as well as double-digit revenue growth in Meta and YouTube. Social media revenue represented 18% of total revenue in the second quarter, up from 16% in the first quarter of 2023.
Video, which commands a pricing premium to display, grew 31% in the second quarter. Video accounted for 50% of measurement revenue in the second quarter, up from 47% in the first quarter of 2023.
On a combined basis, total revenue from advertisers, including optimization and measurement revenue, represented 86% of second quarter revenue.
Publisher revenue, formerly known as supply side revenue, increased to $15.9 million in the second quarter. Publica revenue growth was offset by the performance of our non-CTV supply side businesses. Publisher revenue represented 14% of total second quarter revenue.
International revenue, excluding the Americas, grew 10% year-over-year as a result of new business wins, adoption of our offerings and investments in emerging markets. Europe, in particular, performed well, fueling a 12% increase in EMEA revenue in the period. The second quarter global wins that Lisa referenced earlier, including L'Oreal, LG Electronics, Singtel and Maruti Suzuki, reflect the strength of our international presence.
Gross profit margin for the second quarter was 79%, keeping us on track to realize our full-year expectation of 78% to 80% and reflecting investment in our data infrastructure and increased hosting costs. We expect to optimize the gross profit margin of our offerings as we scale over time.
During the quarter, we recognized $23.5 million of stock-based compensation expense related to the return target stock options, or RTOs. The expense was triggered by the filing of a shelf registration statement on Form S-3 in May, changing the implied performance of the RTOs to be probable. The RTOs were fully expensed in the second quarter, and no RTOs vested or were exercised during the period. Excluding the $23.5 million expense, stock-based compensation for the period was in line with our prior expectation.
Sales and marketing, technology and development, and general and administrative expenses combined increased to $95.2 million, including the $23.5 million RTO expense in the second quarter.
Adjusted EBITDA for the second quarter, which excludes stock-based compensation and one-time items, increased 18% year-over-year to $37.4 million. Adjusted EBITDA margin was 33%, ahead of the midpoint of our prior outlook.
Net income for the second quarter was $7.7 million, or $0.05 per share, which includes the $23.5 million RTO expense, as well as a tax benefit of $29.1 million in the period.
Turning to our performance metrics. Second quarter net revenue retention, or NRR, was 115%, reflecting our ability to grow with our customers. The total number of large advertising customers with annual revenue over $200,000 increased to 208 compared to 173 last year and up sequentially from 204 in the first quarter of 2023. Revenue from large advertising customers was 84% of total advertising revenue at the end of the period, unchanged from March 31 and up from 80% at the end of the second quarter of 2022.
We maintain a healthy balance sheet with strong cash flow conversion that provides us with financial flexibility to invest in the long-term growth of the business while lowering our debt. Cash and cash equivalents at the end of the second quarter were $99 million. During the quarter, we reduced our long-term debt by $20 million to $195 million, resulting in net debt of $96 million.
Turning to guidance, for the third quarter ending September 30, 2023, we expect total revenue in the range of $112 million to $114 million, a 12% year-over-year growth rate at the midpoint. Adjusted EBITDA for the third quarter is expected in the range of $35 million to $37 million, or a 32% margin at the midpoint of the range.
For the full-year 2023, we are increasing the midpoint of our revenue and adjusted EBITDA ranges. We now expect total revenue in the range of $459 million to $465 million, or 13% year- over-year growth at the midpoint of the range. We expect adjusted EBITDA for the full-year 2023 of $149 million to $153 million, or a 33% adjusted EBITDA margin at the midpoint of the range.
A few additional points. We continue to expect gross profit margin in the range of 78% to 80% for the full year. Third quarter stock-based compensation expense is expected in the range of $13 million to $14 million. Full-year stock-based compensation expense, which includes the RTO expense, is now expected in the range of $80 million to $82 million. We expect weighted average shares outstanding for the third quarter in the range of 157 million to 158 million shares, and 155 million to 157 million shares for the full year.
We're pleased to have exceeded our outlook for the second quarter with double-digit revenue growth and expanded adjusted EBITDA margin. We're excited to build on our partnerships in the back half of the year, and we've increased the midpoint of our full-year revenue outlook to reflect continued momentum in our business. We continue to invest in long-term sustainable growth, while efficiently managing our cost structure and strengthening our financial condition.
Lisa and I are now ready to take your questions. Operator?
Question and Answer Session
Operator
(Operator Instructions) And our first question comes from Jason Helfstein with Oppenheimer.
Jason Stuart Helfstein
Lisa, you've launched a ton of products and expanded IAS' relationship with almost all the major platforms. Just help us understand, when you think about your largest clients who, let's say, been on the platform for, I don't know, 2 years or something, what inning are they with kind of coverage across their spend. And then maybe help us how does the cadence work. So, do they turn on as soon as you like offer new capability, do they turn it on? Does this happen upon budget renewals like once a year? Just kind of help us understand like how this evolves with clients.
Lisa Utzschneider
Sure. Great question. So the way to think about the evolution, especially with our Fortune 500 global accounts, is typically when they launch with us, they usually launch measurement first and optimization after that. And when you take a look at -- I completely agree with you on our product road map. We're investing in innovation, high velocity, but we're very focused on prioritizing our bets in the right areas. And where we're prioritizing are with the large tech platforms. The large tech platforms are where the users are spending their time, especially in areas like social media. So a lot of the products you hear about right now, whether it's Meta Reels, YouTube Shorts, Total Media Quality with TikTok and YouTube, those are the largest platforms in the digital ecosystem. So we're doubling down, especially in measurement, in social platforms, in particular. That has been a major tailwind for our business in Q2. And our marketers, when you take a look at the adoption rates, I know we shared a few of the numbers on the earnings call before that, that is where they're doubling down is in those platforms, and that's where we're innovating.
Operator
Our next question comes from Brian Fitzgerald with Wells Fargo.
Brian Nicholas Fitzgerald
I wanted to ask about the price and volume in the optimization segment. Wondering if you could discuss what you saw with the CPM trends and the influence of any factors like regional mix or anything else to call out there.
And then maybe as a follow-up to Jason's question, with Google Video Partners solution that you've rolled out, obviously, very timely. Is that something that you have been working on for a while? Or was that something you were able to spin up fairly quickly, given the fundamental work you've done on your platform and your innovations around video classification over the past couple of years?
Tania R. Secor
Yes, in the second quarter, we were really pleased to see optimization volumes continuing at Q1 levels of 14%. We did see a slight decline in the average CPM for the period, and it is an average, and that will reflect -- average is a reflection of shifts in our product mix, shifts in our customers. And that can fluctuate from quarter-to-quarter, and we do not expect that trend to continue on optimization. But turning over to measurement, we were pleased for the measurement average CPM for the quarter. The uptick, which was a reversal of what we saw in the first quarter of down 6%, and that reflects the increase in video. We reached a -- 50% of our measurement revenue was video-related. And as you all know, video is a premium to display, and that's what drove up the CPM in the second quarter on the measurement side.
Lisa Utzschneider
And then, I'll take the second question, Fitz. Google continues to be a strategic partner of ours, and we're innovating across the platform. And when it comes to GVP, or Google Video Partners, we've actually offered viewability and invalid traffic on GVP for years. And we were thrilled to be able to announce this past quarter, first to market, big differentiator for us, offering brand safety and suitability on GVP. In addition to GVP, we also launched this past quarter, viewability, IVT and Total Media Quality in YouTube Shorts. So again, Google is a great partner. We're leaning in with them, and we'll continue to innovate on behalf of our joint customers.
Operator
And our next question comes from James Heaney with Jefferies.
James Edward Heaney
Could you just talk about the road map for the Meta Reels product rollout? How should we be thinking about revenue contribution over the next two quarters and '24? And then, my second question is just around the macro environment that you're seeing in Q2 and -- or you saw in Q2 and so far in Q3. Any particular markets that stand out as being strong or weak, and then similarly, on ad verticals, weakness or strength to call out?
Lisa Utzschneider
Yes. Sure, James. Happy to answer those questions. So with Meta Reels, as I've mentioned before, we rolled out viewability and invalid traffic in June for Meta Reels, both on Facebook and Instagram. It's just incredible to see the explosive adoption of Reels. I know Meta had talked about it on their earnings call last week, sharing numbers like it exceeded 200 billion plays per day across Facebook and Instagram, so just love that growth and that opportunity. From a revenue contribution perspective, I think it's too early to tell because we just launched the product. So I would look at the back half of 2023 as ramp and adoption. And then 2024 is when we would see the revenue contribution.
And in terms of macro and what we're hearing in the market, I'm happy to give high level and then, Tania, feel free to chime in. I spend a lot of time with marketers, and what marketers are sharing about just macro -- overall macroeconomic conditions, a few things. Ongoing scrutiny on ROI -- 2023 is the year of efficiency. Marketers, they're being much more disciplined and deliberate in spend, and they're doubling down and investing in the areas that are yielding returns for their business. And then also the economic conditions, they continue to be fluid, and we are overly cautiously optimistic about the back half of the year.
Tania, anything else you'd like to add?
Tania R. Secor
Sure. I think on your first question, James, just to build on what Lisa was saying, while Meta Reels, it's early stages, we did factor the impact of it into our guide. The second thing I wanted to highlight, Meta overall was a contributor, as well as TikTok, to our social growth rate overall. In the first -- in the second quarter, our social growth rate accelerated from 25% in the first quarter to 33% in the second quarter. So we really are pleased about the partnership going forward, the momentum to date, the contributions from TikTok, Meta and YouTube in terms of our overall social growth in the second quarter.
Operator
Our next question comes from Matt Cost with Morgan Stanley.
Matthew Andrew Cost
So it seems like over the past couple of quarters, there's been, every quarter, a whole bunch of announcements of new partnerships and new platform integrations for IAS, and there's quite a few impressive ones this quarter. But if I look at where guidance is for top line, we're more or less just a little bit above the midpoint now where we were at the start of the year. And I guess, when we think about the incrementality from a revenue perspective of these partnerships, talk to us about the road map to onboard them and set them up, and when you expect to see them start to drive revision in the revenue path going forward.
Lisa Utzschneider
Sure. I'm happy to take that, Matt. So I agree that we've upped our velocity in terms of both product road map, deliverables, launching innovative products for our customers, and also the partnerships that we've announced. And one thing I do want to call out, and I'm very proud of the team that 4 of the partnerships that we announced on today's call are first to market. But when you take a look at revenue, both product adoption leading to revenue, the way I'd think about it is the following. So, with some of those big tech partners being: TikTok, so you take a look at TikTok, we spoke to TikTok last quarter that we were ahead of the road map schedule, rolled out in 30 markets, on track for 40 markets year-end. That -- TikTok is a tailwind for our measurement revenue, and we're seeing nice both product adoption and revenue growth in the second quarter and the back half of the year. YouTube, so we had launched YouTube Shorts, for example, Total Media Quality. We announced that product launch last quarter in 30 languages. I would say for YouTube, back half of the year is adoption with 2024 revenue. Some of the newer product lines like Meta Reels, everyone knows Meta hasn't opened up their live feed yet. We anticipate that to happen by the end of this year. That revenue -- that is product adoption back half of the year, leading with revenue following in 2024. So again, it depends on both the scale of the platform, how fast the products are adopting, but also I'd say how fast we're able to roll out in multiple international markets and offer language translation.
Operator
And our next question comes from Andrew Marok with Raymond James.
Andrew Jordan Marok
One on Context Control, if I can. You mentioned on the call that Context Control growth had slowed, coming off some strong performance recently. The hope was that maybe as avoidance adoption reached high levels, the targeting would come in as another leg. I guess can you give us an update on where we are on targeting adoption and how the sales staff are finding selling that solution into customers? And can that reaccelerate optimization?
Lisa Utzschneider
Sure. So, a couple of things I'll call out. First is, optimization represents over 50% of our revenue from advertising -- from advertisers. And we saw maturing with Context Control growth as expected with double-digit growth in the period. Over 90 of our top 100 customers adopted our Context Control product. And in terms of verticals, where we see lots of adoption is the CPG vertical, in particular, new logos in CPG. That was partially offset by slower demand from tech and telco clients in the period. And when you take a look at our optimization growth in the back half of the year, we anticipate it will be along the same lines of what we saw in second quarter with possible upside. And with everything I just walked you through, the majority of our revenue is contextual avoidance. And for the overall Context Control products, that's where we see the majority of the adoption demand is the contextual avoidance of Context Control. We are still seeing demand for contextual targeting, but it's more contextual avoidance.
Andrew Jordan Marok
And then another really quick one, if I could. We've seen the MediaMath bankruptcy kind of cause some disruptions around the ad tech space. Any impact to IAS in 2Q? And to the extent that there was, would there be any lingering impact beyond Q2?
Lisa Utzschneider
Andrew, there's no impact to us -- no material impact to us from the MediaMath bankruptcy.
Operator
And our next question comes from Mark Kelley with Stifel.
Mark Patrick Kelley
I just wanted to ask you about retail media, and I'll lump Uber into this, but you had the nice announcement with Criteo and first to market there. I just want to get a sense for how material you think retail media and, I guess, really all of the channels that you're exposed to can be over time? Should we expect your mix of channels to kind of mirror the overall digital ad market? Or do you think you play to different channels in a better fashion relative to the market?
Lisa Utzschneider
Sure. So, a few things on retail media. As we all know, retail media advertising, one of the fastest-growing channels of media, and we continue to see high adoption from the marketers. We've mentioned in the past that IAS, our coverage is across 9 of the top 10 retail media networks, and we continue to expand our measurement capabilities. We were really excited to announce both the partnerships with Uber, where we'll be offering viewability, fraud and brand safety within the Uber app; and then also Criteo, where we're offering viewability and invalid traffic measurement across Criteo's network of retail media partners.
In terms of revenue sizing, similar to some of the other platforms and products I spoke to before, this is a ramp, right? So we're seeing nice growth. We are feeling good about our 9 out of 10 integrations with the retail media networks. But I would say it's a steady growth for the back half of this year and into 2024. And the one other thing I will call out is, in addition to being encouraged with the strong adoption of the retail media partners, we are seeing very strong volume growth across the partners.
Mark Patrick Kelley
And just one follow-up on the retail media stuff. You're doing both on-site and off-site, is that correct? So like on the retailers' website and then also using first-party data to find people off of the retailer's website. I just want to make sure that I got that correct.
Lisa Utzschneider
That's correct. It's both O&O inventory and third-party inventory. Correct.
Operator
And our next question comes from Justin Patterson with KeyBanc.
Justin Tyler Patterson
I wanted to ask a bit about AI. Obviously, there was a big acqui-hire in the space this week. How do you think about just AI's usage within your product suite today? Is that something you can really develop yourself through existing resources? Or do you need to look towards some tuck-ins to kind of further augment your product suite today?
Lisa Utzschneider
Yes. Great question, Justin. So, AI and ML, it's in the DNA of IAS. It fuels everything that we do from a tech and an innovation perspective. And a good example of how we leverage AI and ML is with our Total Media Quality products. So I think you're familiar with that product that we're able to classify real-time in the live feed, for example, of TikTok, classify image, audio and text real time to determine what type of live content is brand safe and what is not brand safe. But what's really powerful is leveraging our AI technology with OpenAI. And the example I gave in the last quarterly earnings, our ability to unlock language translation from 4 languages to over 90 languages with Total Media Quality overnight. That happened by leveraging OpenAI. So you'll hear a lot more about how we use AI with our innovation and our core technology. But I think equally, if not more important, is how we're leveraging OpenAI to unleash and unlock our products at scale.
Operator
Our next question comes from Jason Kreyer with Craig-Hallum Capital Group.
Cal Bartyzal
This is Cal Bartyzal on here for Jason. So first question, I just wanted to kind of circle back to this mid-market initiative you guys have and just see kind of what progress you've seen in trying to penetrate into the mid-market.
Lisa Utzschneider
Sure, Cal. I'm happy to speak to mid-market. So we are seeing a nice uptick with mid-market penetration. We define mid-market as north of the top 100 accounts. One area in particular is Context Control, where when you take a look at the Q2 revenue of Context Control from mid-market clients, it's growing faster than overall growth of mid-market. But the other thing I'll say about mid-market is, we're seeing nice adoption not just in the U.S., but internationally. And when you take a look at some of the data, both in EMEA and APAC, we're seeing that the bets we're placing in emerging markets, so emerging markets like South Korea, Thailand, investments both in the independent agencies, investment in putting boots on the ground in the markets, that's lighting up our mid-market activation and revenue. So we'll continue to invest in the mid-market channel, but also continue to invest in emerging markets as they bring on more and more of the local brands in the local markets to beef up our mid-market category.
Cal Bartyzal
And then last one for me. We've seen numerous headlines lately around things like made-for-advertising sites. So just wondering if maybe you saw any potential impact on furthering the desire for IAS solutions with those headlines kind of permeating across the industry?
Lisa Utzschneider
Yes, sure. So great question. So we are definitely developing our MFA solutions to help detect MFA sites, and we will look forward to share an update on our progress in that area in our next earnings call.
Operator
Our next question comes from Robert Zeller with Truist Securities.
Robert Zeller
This is Robert on for Youssef Squali. I'm just curious on short form video. How much are Reels and Shorts opening up their inventory versus TikTok? And are you able to give us an idea of how much available TikTok -- how much available inventory there is on TikTok, how much they are opening their platform to be measured?
And then just one bigger picture question. Over the next few years, I'm curious if you see increased spend from large advertisers or new spend from new customers like mid-market being a bigger driver of growth?
Lisa Utzschneider
Yes, sure. Happy to take the first question. So when you look at these large platforms, again, it's early days with Meta Reels and YouTube Shorts. We just rolled out our viewability and invalid traffic with Meta Reels. But the one data point that I will share that Meta talked about in their earnings call last week is more than 3/4 of Meta's advertisers are running ads on Reels. So when you think about that sizable ad inventory, and again, it's early days, but also, as I mentioned before, just the overall adoption of Reels, we are really excited to be partnered with Meta on Meta Reels and that we rolled out our offering. Same thing with YouTube Shorts, some of the stats they were stating in their earnings call last week, I believe it was 2 billion users using YouTube Shorts, just incredible scale. And again, it's very early days because we just rolled out both with YouTube Shorts and Meta Reels.
And then with TikTok, so with TikTok, it's -- in terms of baseball analogy, it's probably more like second inning, third inning from a product perspective. But the international rollout, we just launched it last quarter, right? And so we got ahead of our road map from 20 to 30 markets, line of sight to 40 markets by year-end, running the Total Media Quality product in 90 languages. And the inventory is quite sizable on TikTok. So we're just focused on scaling all of the products, all of the adoptions, and again, doubling down on these large global tech platforms because that's where the users are and the marketers want to be where the users are.
Tania, do you want to take the second question?
Tania R. Secor
Sure. So Rob, as you probably saw, we introduced a new metric, and that really gets at your question around spend from large advertisers. And as we look out in the future, we really see growth from both incremental spend from our large advertisers, but also new logos. And so if you even just look at where we are today at the end of the second quarter, when you do the math, with 84% of our advertising revenue coming from large advertisers who spend more than $200,000 in the period with us, and you measure that where we were last year at the end of the second quarter, our revenue growth is up 26% from those large advertisers.
The other thing I'd want to highlight in both the first quarter and accelerating into the second quarter is the revenue we've ascertained from new logos, both on the optimization side and also on the measurement side. And we're seeing, our new logos and accounts that we're winning, and Lisa talked about a lot of these on our last earnings call and the earnings call before, they're spending with us faster and sooner than they had in the past. And we're seeing the benefits of that across our revenue, and we expect that to continue in the future.
Operator
And our next question comes from Mark Zgutowicz with The Benchmark Company.
Mark John Zgutowicz
Tania, maybe just to tail on that your last point, I do see the 26% growth in terms of large customer advertising revenue. When looking at revenue per large advertiser, that grew at about -- by my calculations here, about 4% year-over-year, and that compares to 16% in the March quarter. So just trying to understand that dynamic a bit. And then I had a follow-up.
Tania R. Secor
Sure, yes. No, we have seen an expansion of our revenue from large advertisers. For the second quarter, yes, when you do the math, I can verify the amount you calculated. I would say, overall, we're expanding the number of large advertisers. It was 173 last year at this quarter, and it's up to 208, which was also a 20% increase in the number of large advertisers. So we're excited to see the higher spend and also the incremental number of large advertisers.
Mark John Zgutowicz
Okay. And Lisa, just a follow-up to a prior question about all the partnerships that you've been signing and the revenue there. You've obviously been clearly busy from the last quarter or so. And maybe to frame that revenue in terms of '24, given there's certainly a lag to recognizing that revenue or some of these partnerships ramping, is there some way you can quantify that in terms of '24, just loosely sort of how incremental that revenue could be to your '24 revenue?
Lisa Utzschneider
Yes. I would say at a high level, in terms of 2024, we're so focused on, with all of these new partnerships that we rolled out, just driving the adoption, the product adoption, market rollout, language translation. And we've shared our 2023 guide. We've shared expectations for the back half of the year. And when we're ready to share 2024 guide, we'll do so.
Operator
I'm showing no further questions at this time. I would now like to turn the conference back to Lisa Utzschneider for closing remarks.
Lisa Utzschneider
Thanks, everyone, for joining today's call. We are pleased to have exceeded expectations for the second quarter and look forward to continuing our business momentum in the back half of the year. We recently announced 4 first-to-market partnerships that underscore our role as a trusted independent provider. We look forward to updating you on our progress. Thank you.
Operator
And this concludes today's conference call. Thank you for participating. You may now disconnect.
