Cardlytics, Inc. (CDLX) Earnings Call Transcript & Summary

I'm Will Maina from Cardlytics Investor Relations. Welcome, everyone, to the Cardlytics Investor Day. We greatly appreciate you taking the time to join us. During today's presentation, we'll be making forward-looking statements. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from any forward-looking statements. For more information, please refer to the disclaimer slides at the beginning of today's presentation as well as the risks, uncertainties and other factors discussed in Cardlytics' periodic SEC filings. Today's presentation is made available on the IR section of Cardlytics website and the SEC's website at sec.gov. We will be conducting the question-and-answer sessions electronically today. We will take time for questions and answers after each section. If you wish to ask a question, please submit it under ask a question on the left-hand side of the webcast console. Just type in the question and hit submit button at any time. Please note that if you use the telephonic dial-in to join today's presentation that, that dial-in is listen-only, you'll not be able to ask a question over the phone. Finally, we will be showing a few demos in videos today. To be able to see these better, please click either the full screen or enlarge icon at the top right-hand side of the media player window above the center of your webcast console. Hitting the escape button will allow you to exit full screen. Thank you very much. Now it is my pleasure to turn the presentation over to Lynne Laube, Co-Founder and Chief Executive Officer of Cardlytics. Lynne, please go ahead.

Good morning, everyone, and welcome to Cardlytics 2021 Investor Day. We're pleased to have you. I, Lynne Laube, CEO; along with Andy Christiansen, our CFO, are pleased to present our entire management team who will be presenting to you today. We have our U.S.-based team, starting with Michael Akkerman, who leads product; Ross McNab, who leads advertiser sales; then we're going to do with Farrell Hudzik, who leads our bank relationships; and then we're going to turn it over to Pete Gleason in the U.K., who leads our U.K. team. We're also thrilled to have the CEOs of Bridg and Dosh here today, and you'll be hearing from Amit, formally, as the CEO of Bridg; and then Ryan, of course, the CEO of Dosh is here to answer questions. The entire team will be available for questions at the end of this. With that, we already have a technical issue. Oh, here we go. Disclaimer. Okay. So just real quick, and this is the last that you're going to hear from me. I want to kind of walk you through, just as a recap, if you will, the overall Cardlytics strategy and how the different pieces that you're going to hear today kind of drive into our overall strategy. I think the best strategies are simple. So obviously, our strategy is we just want to be a leading digital marketing platform that creates a real measurable impact for all. And we think that's what differentiates us from a lot of other digital marketing platforms is our ability to truly measure the impact that we're delivering for advertisers, for partners and even through -- for customers through actual savings. We're going to talk a little bit today about how we're expanding our MAU base and growing engagement. That's going to be a big part of Farrell's presentation as well as incorporating Dosh, and how Dosh sort of brings our ability to expand our MAUs into the overall components of our strategy. Michael Akkerman is going to talk a lot about the capabilities that we're building to expand the number of products and services that we can offer to advertisers, which is really the core foundation of how we grow our ARPU. And then everyone is going to talk about some of the new things that we're working on to expand our moat, most notably the Bridg acquisition with Amit, which, of course, brings in a whole new first-party data asset that's very exciting. And Pete's going to talk about open banking. We're pleased to announce that the Sainsbury pilot actually rolled out this week, so we're going to give you some early stats on that. But those are some of the foundational elements for how we are going to continue to expand our moat. With that, you will not be hearing much from me. I'm going to turn it over to Michael Akkerman now, who's going to kick us off, and we'll go from there. Michael?

Great. Thank you so much, Lynne. This is the agenda for today. I'm going to go first around product strategy. Then you're going to hear from Ross, Farrell, Pete on international business and then last [Technical Difficulty] So as discussed, good morning, I'm Michael Akkerman, Chief Product and Strategy Officer here at Cardlytics, and I'm very excited to talk to you today. I've been at the company for just shy of 1.5 years, so why don't I start by telling you a bit about myself. Most recently, before Cardlytics, I built and oversold the Pinterest expansive partnership program globally for numerous years. And prior to that, I ran Global Solutions Consulting at Kenshoo, marketing SaaS company that empowers advertisers and agencies to scale and optimize their spend across Google, Facebook and Amazon becoming one of the largest partners to those platforms. I'm originally from Sydney, but now reside in New York, and I'll make sure to speak very slowly because of my very southern accent. So today, I'm going to walk you through how our product strategy is enabling the value exchange of all sides of the Cardlytics marketplace. We allow advertisers to engage and reward the most valuable consumers across numerous buying moments, and Ross and team will discuss about how the sales and services organization is helping them evolve this conversation. On the financial services side, we are empowering banks to drive richer engagement with their consumers, offer unique and differentiated products, drive lifetime value and spend on card, which Farrell will touch upon in greater detail later. And lastly, we are continuously working to ensure that consumers have highly relevant and personalized offers in a new immersive interface while rewarding them for and often driving their purchasing decisions. At our core, this value exchange allows Cardlytics to do something no one else is able to do, be the world's largest advertising platform in bank's digital channels, being available and present when consumers are deciding where, when and how to spend their money. Our partnerships with the largest banks in the U.S. means we have more scale than many of the world gardens, including my former employer. In fact, an advertiser can reach more people in the U.S. with Cardlytics than they can on Pinterest, Twitter or Snap in a completely brand-safe and fraud-free environment. Their engagement is only growing. Trends show that an increase in first-time usage of online and mobile banking as well as an overall increase in log-in frequency may have been accelerated due to the COVID-19 pandemic, but seem to be permanent shifts in consumer behavior. In fact, your bank app on your phone ranks #3 in usage after social media and weather. Ultimately, this is the network effect of flywheel that the Cardlytics ecosystem facilitates, mass scale together with higher engagement and continual optimization of relevancy, creating a marketplace platform where each party benefits the more they participate. And it is this value exchange between parties that defines what and where we focus from a product perspective because in order to unlock scale growth, we need to put the needs of our customers first. This means focusing on the advertiser experience, enabling us to work with advertisers and agencies of any size in the future by building ad products that are simple to use, industry standard and drive value. The bank experience is focused on lowering the barrier to entry for new banks and fintechs to partner with us by investing in a new ad server, newly developed set of connective elements like APIs and SDKs and building a whole new suite of governance and management tools for our bank partners, and the end consumer experience, which revolves around driving relevancy and creating a more engaging and robust interface with the consumer. This is exactly how we have structured the product organization. Product management is segmented and centered around supporting everything across our main constituents of advertiser, banking consumer and all the underlying front-end and back-end technology infrastructure that makes innovation possible. Product strategy incorporates go-to-market, product partnerships and analytics. And then cornerstone areas like pricing and optimization as well as product design, given the focus they deserve. If you know, last year, we invested heavily on product and technology by bringing industry experts who have both seen the movie before and have a proven track record of execution from some of the most scaled and innovative companies in their respective markets, such as Facebook, Amazon, Pandora and Yahoo! on the outside, Integral Ad Science and NextRoll on data and measurement and Visa, Amex and Chase on the banking side. These folks have done it before and have sat in the seats of those that we are building solutions for. We also brought the 3 legs of the stool together: product, engineering; and design, by bringing design in-house and introducing new disciplines like user experience and product analytics. Because in the end, our mission is simple, ensure consumers, advertisers and partners getting daily value through Cardlytics products. If we do this correctly, the flywheel will ensure scaled revenue growth. To that end, we do have a secret weapon. The underlying secret source of our platform is the Cardlytics purchase drop, where based upon our understanding of the users' purchase preferences, comprehensive view of the merchant's unique attributes, we can continue to improve and deliver a highly relevant and personalized set of offers to everyone, ensuring the right offer to the right person at the right time, while optimizing for engagement and whatever the goals of the advertiser and banks may be. And given Apple's latest privacy restrictions announced this week, Cardlytics' ability to bridge the physical and digital world is more important and valuable than ever. It is a great segue into all of the work we have done on the new advertiser experience. And if you know, digital advertising dollars are concentrated to the large walled gardens, where they have: one, an engaged audience; two, drive unique intent to take an action, such as a purchase; and three, make it easy for advertisers to connect with their current or prospective customers with compelling mediums. And while $0.64 on the dollar are going to the top 3, advertisers are keen to diversify. Cardlytics can compete in the broader digital ads landscape, and we have a right to win. However, in order to command a sizable shift in ad dollars, the market expects automation of the buying process, simplicity in ad offering, targeting and reporting, measurement of the efficacy and efficiency of their ad dollars, unique consumer insights that justify further investment and rich creative ad units in which to engage with the consumer. These 5 pillars are germane to where we have been investing. Today I'm incredibly excited to introduce the Cardlytics app. We focus on creating a simplified platform that streamlines campaign creation and management aligning with industry expectations, automating targeting options that drive business and marketing outcomes like net new customer acquisition. We've created a robust reporting suite, the lowest level of effort in understanding campaign performance and streamlines further investment in Cardlytics. We try to remove complexity wherever possible. So let's dive into a demo. I was told to say that for those listening, feel free to maximize your video in the top-right corner of the dashboard to see the details of the self-serve demo. When you first log in, you see at a glance the performance of your campaigns with all key metrics highlighted in the main performance group. You can change the visualization within the reporting to see any 2 metrics stacked up and compared against one another. You can also alter the time frame to be able to compare pre and post periods. Everything here is completely -- reading here is completely customizable to me, the user, from including metrics to column order and sort preference. Additionally, if I'm an agency, I can easily jump into another advertiser to which I support. So let's create a campaign. First, you get to choose a business objective between acquire net new customers, build loyalty with my existing customers or drive gross sales. By moving on after I can -- after I put a campaign name as well as set a budget, I get to move on to the ad group where I get to choose my targeting specifications. Over here, I get to choose targeting such as geography, and the indicator on the right will show me my potential addressable audience. As we scroll down, being able to segment based upon purchase categories driven by the Cardlytics purchase graph allows us to go and highlight individuals that have the highest propensity to purchase a brand, product or service. Now we get to go and create our offer. Highlighting the name, being able to write compelling completely customizable ad copy, adding my brand's logo, creating a call to action such as shop now or find locations near me and being able to add extremely compelling hero inventory, all together allows me to be able to build a very enticing offer that engages and drives the value we are looking to do. Who doesn't love some chocolate? Final QA and there it is, we've built a campaign in less than 90 seconds, and I was going slowly. Able to jump into a reporting dashboard where I can quickly see some analysis and some data visualization or create a completely customizable report, where I can choose the frequency to which I want this data delivered and it allows me to understand further investment within the Cardlytics channel. Lastly, as we move on from campaign creation and reporting, we move to business insights, where instead of just understanding the singular performance of myself as an advertiser, I'm understanding the macro market environment to which I participate and effectively understand where I am gaining and where I may need to invest. By focusing first on advertiser marketing objectives such as building loyalty and existing customers or driving gross sales in an easy-to-use and intuitive interface. That the Cardlytics ads manager paves the path for Cardlytics to begin the journey from managed servers to managed self-serve and then full self-servers for those that work that way. Our initial agency partners have been really impressed by the platform thus far. And because we built this on a completely new technology stack, we are future-proofing Cardlytics for many years to come. Lastly, as we look to scale internationally, making it easier than ever to work with Cardlytics is paramount to capitalizing on that opportunity. Due to time constraints, we don't have the ability to dive deep into some of the wonderful work we are doing with our bank partners, around governance and management systems, plus our new ads serving robust set of APIs and SDKs that together lower the barrier to entry for banks and fintechs to work with Cardlytics as well as the work on open banking that Pete will talk about shortly. But all of those are the foundation that enables the new consumer experience. So let's dive into that. Within the bank environment, the product -- the consumer navigates through many different touch points and mindsets while engaging with the Cardlytics program. We've mapped those through vast user testing and data analysis and have baked unique modular offerings into our experience at every stage. With our flexible new ad server, we will be working with each bank to help them create their own engaging experience that is differentiated and unique. By making the offering modular, we have the ability to endlessly test and learn to ensure we are optimizing for consumer, bank and advertiser value. Let's dive into a quick demo of the consumer experience. First up is the education model, leveraging at launch by U.S. Bank to drive user comprehension. When you go and see all of your offers, you can easily activate, just as usual. Now we've created a set of collections of sourced content such as local leads or [ black-owned businesses, ] each with their own featured set of offers. Categories allow a consumer to choose what is important to them, such as food or travel with a set of premium hero offers that in the future make command premium pricing. And then product-level offers, which is currently in testing phase and still being built, but opens the door for grocery and CPG relationships in the future. Lastly, to the earlier point of the solutions, we allow each bank to customize their look and feel in complete flexibility with the unique visual treatment, whether they are North Bank or South Bank, they get to choose what their experience should be. And the preliminary results are very promising. As you know, we recently launched U.S. Bank and off the bat, they focus on driving consumer comprehension of their new offering, utilizing our education model that you just saw as well as richer imagery and offer. When compared to prior bank launches over the same initial launch period, we are seeing a lot of reasons to be excited. Engagement, visits and offer activation rates are all up after viewing the education model. Additionally, the richer imagery is driving substantially more click outs to advertiser websites. These are still very much early days, and we are working with U.S. Bank and all of our banks to continue to enhance the consumer experience. Farrell will talk more about this shortly. In the end, the goal of product is to build the foundation and enable the company and my peers to scale through innovation. Everything I've shown you today, all of these investments are to drive these 3 core growth vectors. Enable Ross, Pete and teams to diversify demand by making it easier than ever for advertisers to buy from Cardlytics. Enable Farrell and team to scale existing and new bank and fintech partnerships as well as nonbank MAUs by lowering the barrier to entry to integrate the Cardlytics offering. And lastly, enable Pete to easily drive further international monetization by delivering on the first 2 vectors above. All 3 of them will talk to their respective areas at greater extent shortly. Thank you so much for your time and for giving me the opportunity to speak to you today. I'm more excited for what we are building and the future ahead of us here at Cardlytics. Before I pass it over to Ross, I want to see if there are any questions.

Thank you, Michael. As a reminder, if you'd like to ask a question, please submit it electronically under ask a question in the webcast console and hit the button submit. Welcome to take any questions regarding product and strategy. We have 1 question. How are newer cohorts of bank users engaging with Cardlytics? Are you seeing differences in the level of engagement?

Yes. I'll most probably have Farrell talk in greater depth about that. But ultimately, I think we all can understand that when you first open a bank account is when you are highest to engage with everything that your banks and their partners have to offer. And so it is definitely something that we are exploring with our bank partners, how to capitalize on that early engagement and that early month on full in order to create really compelling both in the consumer experience as well as in the offers that we show to them in order to entice them further.

We have another question. Any -- can you provide some thoughts on timing of ad manager adoption? Which groups will most likely adopt it?

Yes. So first off the bat is our entirety of our existing business, which is a migration that we are doing over numerous months to be able to make sure that business as usual does not change whatsoever. Additionally, as we spoke, and that Ross will talk further about, we are strengthening our partnerships with agencies who are very, very quick adopters of ad manager or self-serve platforms such as these. And so really, when we think about going through the path, we're being very methodical to be able to our most prized and current advertisers first, and then be able to bring in new cohorts and constituents across the way, agency being the #1 focus.

Do the SKU level offers that you described require a retailer to connect to Bridg?

Right now, we are still in exploration phase. So we're -- there's a lot within that. Obviously, we know from both advertisers as well as our bank partners that this is an area of great interest for them. So we are exploring all of the opportunities and options in order to make it come to fruition.

We have a question, when will the rewards be rolled out broadly to other bank partners? What are the hurdles to rolling this out, if any?

Great question. So I think Lynne has stated previously that new user experience because it is built on a new technology stack is dependent on our new ad server or our offer server as opposed to our legacy technology, which some of our banks still take. So U.S. Bank was one of the first to roll out with the new ad server and the new user experience. Additionally to that, Nectar, via open banking in U.K., has also adopted it. And then we have one of our largest banks who have committed to being able to move this year to which Farrell will give greater insight later during her presentation. And so we are working -- just to put a finer point on that, we are working with each bank on their specific time lines to upgrade the technology necessary to go and take the entire user experience.

Great. Another question. The U.S. bank data on the new UI looks wonderful. Is it good enough to persuade other major banks to shift to their new UI server -- sorry, shift their new UI ad server platform?

That's what we're hoping. It is quite -- we have all been really, really impressed by the data, and it really does speak for itself. I think being able to put a qualitative and quantifiable point on why this is a value-add not only for the bank at large, but for their consumer, the main crux of where they're trying to drive value, I think, is really important for us. So we are definitely taking this and all other initial conversation. We also do vast user testing, which helped inform what we built, before we actually put it in production. And so having both qualitative and quantifiable data that proves that this is the right direction and extremely compelling is the conversation that my team together with Farrell's team is taking to every single FI that we work with.

Great. What lessons for future developments have you learned from U.S. Bank launch?

Yes. So I think one of the biggest points is just having the right relationships and executive sponsors at U.S. Bank. They've been a wonderful partner to Cardlytics. They've been really leaned in. We've been able to strategize and really solution together. And they have been really a wonderful advocate of what we are trying to achieve and have taken our recommendations when put forward with qualitative and quantifiable data. And so being able to take those learnings to, again, the other FIs we work with, not just what the product is, but how we best work together to be able to facilitate it is something that Farrell and myself are working very closely on in order to expedite so that each new launch is quicker and more efficient in the [ line. ]

Michael, could you please talk about the bank systems you're building? Can banks onboard new advertisers and new campaigns at a very high pace?

It's a great question. The way we build the ads manager is to allow anyone to be in the driver's seat, whether that is an advertiser, an agency, our own managed service team or yes, indeed, a bank within emergent services organization. So they can leverage that exact same platform to go and drive their own desires as they pertain and work with their merchants. Additionally, as I touched upon, we have created a lot of governance tools for the banks themselves that allow them to monitor and report and control the program at large, so they get greater insight into how consumers are engaging, they get greater insight into their ability to audit everything going through their channels. And those 2 things combined mean that this becomes a platform, not just available for advertisers, but for banks at scale too. I think they're about to play me off with some music.

Maybe we can take one more, and then we'll move on, if that's okay?

Yes, absolutely.

What are the key modular products, designs, features that you believe will drive user engagement the most?

That's a great one. So as we saw from U.S. Bank, I think, number one, helping people understand and comprehend the platform and the program at large is the most important. It's one of the things that we hear within our consumer research, that being able to help them understand how they get value from the program is paramount. On top of that, I come previously from a platform, which was all visual. And so as we saw from the results of click outs to advertiser website, a picture really is worth a thousand words. And so being able to go and dive deeper into our richer and premium imagery is, again, the largest focus. As it pertains to UX modules, what you saw previously, like the collections to being able to bring local content at scale, everyone wants to find offers that are around them and from the places they go regularly as well as being able to create hero imagery and hero offers for individual categories like food, like travel, like anything specifically that entertains and drives the consumer. To me, those are the most engaging touch points. And then bringing it all together with what we are building, which is a brand-new set of messaging in real time and engagement functionality. So being able to send push notifications that there are offers available from merchants around them at that location, although, quite frankly, being able to create FOMO, hey, here are offers that you're missing out because you're not locking it. All of those are what we are in testing right now and have also built into the platform. With that, again, I wanted to thank every time -- everyone for their time today. I really am excited for what we are doing here. The sky is the limit. And with that, I'm going to pass it over to someone else who has a lovely accent, Ross McNab.

Nice work, mate. Thank you. Whilst I get myself situated here, now let me just say, excellent use of silence, meaningful pauses and tension in the demo. I was on the edge of my seat at times there. All right. Hi, everyone. I'm Ross McNab, President of North America advertising. I run our front of house, sales, client success, analytics and operations. So I'm the back to pat or the throat to choke for revenue and client happiness. My goal is to make it far more of the former than the latter. I joined Cardlytics in October of 2019, approximately 1 month ahead of Michael. So if I don't go down in history as the best Australian import, at least I'll be the first. And I'm seeking for your vote as the one with the best hair. We'll open that up for a poll after our sessions. My experience is in leading digital marketing businesses with 20-plus years in the ad tech and digital advertising industry, working across APAC and for the last 12 years in the U.S. Prior to Cardlytics, I ran the U.S. business for MediaMath, one of the first demand-side platforms. After that I acquired my moderately successful small business back in Australia in the ad tech space. The entrepreneurial spirit still runs deep, which is what drew me to the compelling opportunity we have with this business to build exponential growth on top of the amazing foundation that Lynne, Scott and all the Cardlytians before me created. My #1 learning in those first 18 months is quite simple. We matter. The industry and ecosystem is better off for our existence and presence. Consumers benefit as we put cash back in their wallets. Market has benefit from a path to their holy grail, create incremental return all within a brand safe and forward-free platform. And we help our banks and FI partners create stronger relationships and engagement for their customers. Put simply, we positively influence consumer behavior for everyone's benefit. I focus on ARPU growth on 3 vectors. First, in the immediate term, it's about focus, selling to who we should, not who we could. Most of the content today is going to focus there. This is about going after our fair share in our right to win segments and industries by being continuously better at our core and still really well-differentiated value proposition. Good news is that this doesn't require intensive product or technology innovation immediately. This is achieved through a modernization of our go-to-market, smart allocation of human capital, how we structure ourselves and service teams to better delight the right clients, last milling our offering to be relevant by industry and continuously increasing our talent density. Second vector is unlocking new growth opportunities in the short to medium term. This is industries like grocery and gas, budgets like shopper marketing, market segments such as the agency community and the longer tail. We do this with help from new fit-for-purpose solutions such as potentially the self-service offering and aided by partnerships we create in the marketplace and the addition of our new friends from Dosh and Bridg. Third, looking longer term, we're readying ourselves to address the exciting upside fueled by the innovation Michael and his team are leading, supported by the next-gen experiences Farrell and her team enabled with our FI partners, all of which allow us to address new market segments such as SMB, budgets, like Brand, and creating -- potentially creating complementary SaaS-oriented recurring revenue streams for our business. Without a doubt, we have an opportunity to compete in the broader digital ad landscape, as Michael said. I consider this not just an opportunity but a mandate, strongly supported by secular tailwinds in our core digital advertising market. As you're all aware, our core market digital advertising is expected to grow 25% this year to $191 billion. Furthermore, here's where I show off 12-plus years of American cultural acclimation, we've managed to skate where the puck is heading. We are inherently well placed to solve any -- the key industry challenges. According to the IAB 2021 market outlook survey, 41% of marketers viewed data privacy and ad tracking as top challenges. We are well insulated from the cookie apocalypse with our noncookie-based targeting and measurement platform built upon decades of expertise from working with our banking partners in their stringent and highly regulated stewardship of consumer privacy. Another 41% say they will continue to take flight to quality media environments. The good news is bots don't bank. We are brand-safe and fraud-free. 64% of marketers say they will continue to focus on performance marketing, a continuation of the trend of all marketing becoming performance marketing, and this today is our sweet spot. More pointedly, the smartest market is driving demand, incremental -- proven incremental omnichannel return, and this is our killer app today. Cardlytics drives not just efficiency, that's us beating performance in the form of incremental return, but effectiveness, our ability to do it at scale across those 160 million plus MAUs we now have in the U.S. That all allows us to create business impact that matters. And we create that material business impact no matter the sales channel. E-commerce growing in the last 10 months, what it did in the 10 years prior, fabulous. We can impact that. In-store still accounting for 90% plus of sales, fabulous; we can impact that, too. It's 0 sum for us. We drive sales. We bridge online and off-line. How we do this starts with our investment in people. I believe the single biggest impact a leader can have is increasing high talent density. I believe people want to be surrounded with high-caliber peers who will coach, stretch and set new standards of excellence. Working with really talented colleagues is exciting, inspiring and an incredible amount of fun. Proud to report our immense progress here. I was fortunate enough to inherit a strong heritage talent base with deep institutional knowledge and credibility. We wrapped our arms around our A-grade talent. At the same time, we continuously push ourselves to have the courage and discipline to move on from mediocrity to embrace a culture of high performance. This created room to augment with peers who have fresh expertise from the digital advertising industry. They bring experiences from platforms like Facebook, Google, Pinterest, [ Pandora ], PayPal and Criteo and from marketers like the Home Depot, UPS and eBay. Rounding this out, we have an always-on approach to recruitment. This is a quality over quantity game, where we strive to hire fewer yet more excellent people, reminiscent of our choiceful approach, the advertisers we work with. And once you have the right people, that core talent group, it's imperative that you invest in them. Core to this plan is the formation of our sales strategy, operations and readiness group. It's SOR for those acronymically inclined. The fact that it's my name backwards is a handy coincidence. There are 4 tenets in building this sales machine. First, we removed the friction in the customer sales cycle. We make ourselves easier to buy from. Second, we train and enable our people. We invest in them to make them more effective, to be kicka** at their functional roles, at their jobs, at their professions and then to be kicka** at that job at Cardlytics, bringing it to life in our business. Third, development of a revenue marketing discipline, repeatable prospecting programs that drive customer acquisition and measurable sales for our business. And the fourth leg, key to all of this, is the installation of the Cardlytics partner program. We're being far more purposeful with our give and our get here. Standardized and simplified value tiers, which has led to multiple examples from increased budgets and longer-term annual agreements. And I'm pleased to report this investment is already paying dividends. We've increased the number of $1 million-plus advertisers by 60% year-on-year to be on track for 80 already this year with room for upside as well. Our win rate is steadily increasing every quarter, being 56% in Q1. And we're winning and losing faster. We improved our average days to close by 20%. The time [ dock ] in between campaigns as well has been significantly reduced. Test versus control analysis is both a killer strength and it's how we prove our incremental impact, but it can also be a tax on campaign timelines. Our stellar analytics group has half the time to run these with continuous improvement ahead. Now from a new business [ perspective ], more than 1/3 of our won opportunities this year are longer term, an average length of 10 months plus and 1/3 of those won opportunities this year. From a new business only perspective, we're on path to 2x our billings this year. We have closed 44 new business deals, which is flat year-on-year. I call that out because it shows that we are, one, winning more of the right clients with higher upside and spending less time on lower-yielding accounts; we are -- and two, we are doing a better job of accelerating the revenue on those clients. We focus our account handoff process now, not just on campaign details but on growth opportunities. And to cap it all off, our regrettable churn rate is continuously decreasing as planned. We bring that talent and approach to bear on -- to serve 3 core groups of advertisers: first is enterprise, large-brand advertisers; second is the growing agency cohort; and third, what we call, the commercial segment. Majority of our investment today is in that highest value segment, enterprise and mid-market. This is Fortune 500 brands, and we seek $1 million-plus minimum from these clients annually. Our aim here, again, is to get our fair share of their digital advertising budgets. We put the clients further in the center in this group by organizing this enterprise segment by vertical or industry. We've found bringing industry expertise in keeping the entire account team, sales, client service, analytics aligned is paying dividends. Best practice is now easily shared amongst the group and brought to bear as expert business partners for our clients. We create solutions, that last-mile Cardlytics, to be relevant for any given industry, how we sell in service, how we speak to them, position, the products that we bring to bear and the economics as well. Each industry is run by an experienced industry leader. Interestingly, in this role, we found a great mix works. We have ex-senior marketers and, in other cases, proven sales professionals to lead these teams. Next segment up is we engage the agency cohort as our first cab off the rank for our emerging channel partner strategy, helping us aggregate demand across all segments. As Lynne and Andy have said -- mentioned before, we intend for agency to be a material contributor to billings in 2022. Now there are 3 reasons behind our investment here. First of all, 50% plus of media spend is still controlled by agencies, and we have traditionally underrepresented here. It is greenfields for us. Second, we see them as an early adopter for that self-service orientation of our solution. And third, frankly, they want to buy from us. Our brand-safe, fraud-free, highly performing channel appeals to them. This year, we've installed a dedicated agency services team to both drive deals directly with these agencies and support our enterprise teams when the agency is an influencer in the buying decision. We recognize that SMB and long tail is an important segment for our long-term growth. We know there is significant latent demand in this group. There are thousands, if not millions, of small to medium businesses who are desperate -- who are hungry for a solution. We know our consumers are very interested in getting local content, and our banks would love nothing more than us to also provide engaging local offers. But we do not have a scaled solution here yet. So our focus this year is on what we call the commercial segment. Think about these as Fortune 1000 brands. They are perhaps more regional oriented, and there is a strong population of direct-to-consumer brands in this. We are engaging on this cohort, firstly, to address the revenue opportunity that exists today but also to use them as a proven ground for the new solutions and go-to-market that we work with Michael and his team on. And these are an early adopter cohort of the Cardlytics Ad Manager platform. Pleased to report we're already seeing great success here and are [ 4x-ing ] ahead of our expectations from a revenue perspective on this segment, and we are learning an incredible amount as we continue to push ahead with that emerging go-to-market. Incredibly invaluable learnings and insight that will help us as we continue to move up the customer value chain with our future go-to-market proposition. I'm going to spend some time now drilling a little further into that high-value enterprise segment further. Here's how we break it down by industry and selection of named advertisers where we focus our energy. Above the dotted line there, you'll see some of our top existing clients, while below remain some of our highest-value business targets. Whilst retail and restaurant are the foundation on which our business was built upon and still represent more than their fair share of billings, over the last 2 years, we have successfully diversified into growth industries, where we have -- which we amplified with the Rise, Retain, Return strategy installed at the advent of COVID. You'll note agency features along the bottom here, too. Just a snapshot of the enterprise brands we will deliver this year across the 5 major holding companies and leading independent agencies. Up next, I'm going to spend some time diving not into each of these but into 4 key ones. Firstly, some breaking news to share with you all today. We have gas, but in a good way. The quarter -- this quarter, we were able to secure a multimillion dollar annual investment from a top 5 gas station in the U.S. Furthermore, we have significant traction with at least 3 others, proving we have a repeatable approach, meaning, there is a lot of gas left in the tank. I fit it in there for you, mate. This is a great example of our new best-in-class sales talent, bringing fresh perspective and approaches to a category we have long sought to unlock, backed up by our expert analytics group, interpreting our insights and modeling particularly for this industry. Retail remains our #1 industry. However, at the start of the year, we split it up into 2 subcategories: big box and specialty, acknowledging they require a similar but nuanced approach. I'm proud to share a compelling win-back story in this category. When this national automotive retailer paused their Cardlytics investment in the back half of last year, they lost share of wallet, with their customers spending more than $100 million with their competitors during that time frame. Crucially, our insights also showed the loss was acute with their top 20% of customers. After we proved that targeting these switches would return a positive ROI, the client returned with an annual multimillion dollar agreement. Importantly, their third-party measurement partner also validated the uplift in campaign performance. Resulting from that successful deployment of the Rise, Retain, Return approach, capitalizing on industries with natural growth, e-commerce and subscription is on path to be our second largest industry this year. Telecommunications companies remain an important pillar, with our analytics team doing stellar work, modeling to predict audiences at most risk of churn. This category is buoyed by rapid growth of streaming services and a continued push of D2C brands across apparel and fitness subcategories. Because we can identify, reach and acquire the highest valued customers for subscription service providers, Cardlytics' portfolio of streaming video services has seen rapid growth. This year, we have secured investment from more than 10 such advertisers. And with a mandate to sustain the customer acquisition growth that D2C apparel brands enjoyed in 2020, they have turned to Cardlytics to help them retain their highest value customers. We remain enthusiastic about the opportunity in grocery. We know customers want offers where they shop every day or that have a high share of their weekly wallet. We know banks want content that will increase engagement, and grocery certainly fits that bill. These marketers, whilst this category experienced enormous consumer spend growth in 2020, it has left them seeking help to retain the shoppers that they gained during that period. Whilst we continued to develop a SKU product or category level solution as the killer app to release a flood of CPG and shopper marketing budgets, there are definite bright spots in the solution we have today. Grocers today appreciate, like most marketers do that we work with, our ability to complement their nascent first-party data approach with our insights into their existing customer and potential net new [ customer ]; our customer churn rate analysis, which helps identify leading indicators of customers with a higher propensity to churn, so they can get in front of that. Like all marketers, they love our insight into share of wallet, helping not just make marketing decisions but business decisions, too, like store locations. And we've modified our pricing to help address perceived risk in this category, recognizing grocers' need to achieve profitability hurdles in a notoriously low-margin category. A compelling highlight I'm proud to show here is from a grocer with a leading e-commerce and burgeoning bricks-and-mortar presence. We're able to secure an annual contract in the double-digit tens of millions of dollars from this contract -- from this advertiser this year, thanks to our proven ability to: a, change grocery customer behavior of traditional grocery shoppers; and b, increase order frequency amongst this advertiser's already existing customer base, all at a compelling incremental return. What makes this even more noteworthy is that this marketer slashed their overall budgets by over 75% this year, meaning, our share of their budget grew exponentially. In return for their increased trust and investment, we expect to be able to influence over $200 million in top line sales for this business this year. I hope that gave you all a great sense of power addressing the opportunity right in front of us as we continue to better delight our customers with our highly performing solution. I look forward to speaking with you all again as we open up new growth vectors fueled by the innovation from our product and bank teams. I'm pleased to take your questions now.

Thanks, Ross. First question for you. How do larger advertisers grow in the platform year-over-year in terms of dollars? Are larger ones plateauing after a few years? Or do they continue to scale with MAUs? Why haven't larger advertisers scaled with your increased MAUs yet?

So I mean, I believe our large advertisers are showing growth, and you see that in the numbers that we're putting on the board that is being driven by some of the largest advertiser cohort. Now that said, it's right to acknowledge, and this is great part of the opportunity, there is enormous headroom still on the budgets and the customers that we have today. Growth, whilst we are getting better at delivering meaningful enterprise-grade new business, majority of our growth opportunity remains in our existing customers. Usually, those customers, that growth path, what do we do? We start by helping them acquire new customers. It's where every marketer generally wants you to start. It's where they believe they need the most help. But again, one of the killer things of our solution is that we're able to help actually influence the entire loyalty continuum, helping them move customers along become higher value and retaining the highest value customers, too. So the growth opportunities are immense. And they certainly do grow in line with our MAU growth. I think some of the things that we've installed, the talent we bring to bear, the meaningful approach from account strategy, the sales machine that we have installed and that we continue to evolve will only see us step better forward into that large upside.

Thank you. Second question, can you talk more about your consumer research findings? How misunderstood is the Cardlytics platform today?

Again, I think, an amazing opportunity for headroom because in the marketer community, I think there is 2 opportunities: a large awareness opportunity and then the right perception and understanding opportunity. We've embarked upon a project this year, working with an external agency and also excitingly buoyed by the amazing marketing talent that we've been able to bring into the group via the Dosh acquisition. I think you'll see us make meaningful impact on that front this year. Simply put, the market needs to -- we need to be better known. We are not -- we punch below our weight from an awareness and then a perception and understanding perspective. Too often our sales teams are going in, and we have to create that awareness at the field level. So complementing that with better investment, expertise and impact at the higher top of the funnel level will only pay dividends for us, and we expect to be able to start to bring that to bear in short order.

Thank you. Next question. Is the self-serve platform a real TAM enhancer, i.e., bringing large advertisers with incremental [indiscernible] onto the platform or merely table stakes for doing business in the digital ad world?

I see the self-service orientation of our solution being completely complementary to what we do today. Yes, there will be some large advertisers who wish to be hands on keyboard. But for me, that isn't the biggest growth opportunity. For me, it's the vectors -- the cohorts that a self-service orientation opens up. We spoke extensively about agency. We believe they will be an early adopter cohort of it. But where I see the real greenfields of self-service really comes down to unlocking the true SMB, long tail/local opportunity, again, those millions of small businesses that exist. And we see the power -- we know that there is latent demand there as we've spoken about. Today, our service model, our technology, we are not capable of onboarding those customers in a meaningful way. Self-service is the unlock to that. We know -- we're bullish about that opportunity. We saw how powerful that segment is for the other large advertising platforms. Facebook and Google, they were able to weather the COVID storm last year, thanks to strength and a diverse group of advertisers. And that is the opportunity that, I think, sits in front of us, and that I look forward to self-serving, making the biggest immediate impact on.

So if I'm a small business owner and I want to access self-service platform, roughly how long is it going to take before I can spend on this platform?

The product road map timelines, I think I will send that one back to Akker. We can speak for -- in further detail. But what I can share is that we are piloting that today, not necessarily with SMBs, but again with that commercial segment cohort and with a small number of agencies who are also becoming hands on keyboard. So we're piloting today. We intend to grow that over the rest of this year and seek to have a solution in place from an impact in 2022.

Thank you. Next question. Could you talk about the historical barriers to getting initial relationships and then moving up to the next level has been product, lack of familiarity with the platform? What battles have you fought and feel like you won with the larger market -- larger marketers, sorry?

Yes. I think we've talked about the awareness piece, right? It's moving from a do I know you to being a nice to have to being a must-buy, and we're starting to feel positive impact there. But again, great upside still to happen. I think it's also down to selling -- a better job selling the value of our channel. Again, when you think about our scale now and you think about the inherent advantages we have in the digital advertising marketplace, it's really about making more of those. Excited about the Bridg acquisition there because, I think, our blind spot really still has been what has been purchased. We know all the rest, right, where, how much, when and so on. And again, that's a particular challenge to unlock the true CPG and shopper marketer-funded grocery budgets. So we're excited about the work that we're bringing to bear there. I think the opportunity as well, we're kind of all science and no heart as well. I think our, again, purchase intelligence asset that we sit upon, those insights that we're able to bring to bear. It's actually being able to sell more to the hearts, not just the minds. Great product innovation here. We're looking forward to enhanced imagery. The likes that you saw from the U.S. bank demo. They're not only going to help, I believe, improve incremental return on performance budgets, they also help us start to unlock the upper funnel or brand budget segments that we have traditionally not been able to access. And I think these are all exciting growth vectors for us.

Thank you. Perhaps we can take one more to remain on track. Can you discuss how you guys view travel as a category? And what have you seen so far in '21 relative to 2020?

Yes. Listen, no industry [ performed ] worse than travel did last year. And I'm pleased of the efforts, the commitment that our travel team has made, rebuilding momentum early in 2021. This is a great example, led by an industry leader with deep travel industry experience from the marketer side. I think I'll talk about it in 2 groups because we do see it as a great growth opportunity, perhaps not material impact to our revenues this year, but again on a great path for subsequent years. Two groups I'll talk about there. Firstly, our hotel relationships are strong and steady with the leading chains. Hotel marketing, though, the spend there continues to be depressed. They have been hit both directions from COVID, right, again last year. And then the restaffing problems they continue to experience are causing them to struggle to service this recovery we're now in. And it certainly is a recovery judging from the hotel bar last night. This is causing the hotels, though, to pull back on lower funnel advertising in the immediate opportunity. Two really interesting, though, I think, growth opportunities for us there that we're working on now in readying for that recovery. Property level reporting, which allows us to get into the franchise and operator budgets in this industry, a huge source of funding we've traditionally not been able to address. This is all part of the purchase Graph road map that Akker introduced in there, really solving an incredibly time-sensitive heavy lift to do this type of work. Purchase Graph gives us a much better opportunity to do so. And then second is addressing the OTA, the online travel agency opportunity. Our opportunity there, again, historically has been difficult because we have very limited visibility into the actual transaction, as it's usually done at the hotel property, not through the OTA, right? We are in a proof of concept today with a major OTA, showing that we can stimulate incremental sales lift in, first of all, their prepaid products in the transactions we see, where that OTA is the merchant of record. But importantly, presuming we create that incremental lift on the prepaid work, we're getting this market [ at a share than ] downstream data with us, which will allow us to see the transactions that we then can't, so that we can show incremental lift on all of the spend that, that market -- that, that customer then had at the hotel property. That starts then showing incremental lift across their whole business rather than just a narrower part that we could historically see. We're not getting credit for it. We're driving it. We should be, and we will do. I'll pause there on the travel piece. We can follow up with further detail at an industry level at the right moment. Again, I thank you again, and I welcome Farrell.

Thanks, Ross. We're going to take a quick 5-minute break and then we'll start again, let's call it, at 10:45, everyone. [Break]

I think we're good. Hi, everybody. I'm Farrell Hudzik. I lead our bank partnerships team. I have been with Cardlytics for just under a year, and Lynne's been keeping me busy, which we will dive in here shortly. But first, a quick background on me. I come to Cardlytics from Synchrony, where I designed and built a customer experience organization, focused on putting the end customer, the retail shopper, the patients, the new mover, the newly wed at the heart of internal decision-making across digital product, marketing and servicing. Previous to Synchrony, I led Accenture Interactive's North America Financial Services practice and loyalty globally; managed growth partnerships and financial services business development at Epsilon; and spent my earlier years growing a marketing and analytics start-up, along with holding CRM and consulting positions at Bank of America and Accenture. And no background is complete without mentioning my true crowning achievements. Married 17 years next month to my amazing husband Steve and our 2 children, Avery and Eli, 11 and 12. As you've heard and seen all of our exciting product and experience enhancements from Michael and how those are clearly paying off through advertiser growth, I'm now looking forward to spending the next 20 minutes walking you through how we're optimizing this value exchange with our bank partners and how we're helping them take full advantage of our new platform, the new user experiences and expanding content that will be available from our self-service platform. Over the past 10 months, my team has been working hand-in-hand with Michael, Ross, Lynne and the entire team to strengthen the value we deliver to our bank partners and best reward their customers. We're doing this in a few key ways. We're delivering more of the best content in the best categories but also creating journey-based cardholder engagement programs, providing increased visibility into the total value created through our programs, including the total purchase volume related to redemptions, proven correlation of program engagement to habitual use and the role of our programs in driving digital engagement for our bank partners. We're also enhancing test and learn capabilities along with increasingly demonstrating the power of our core program across bank-focused top of wallet spend categories: grocery; gas; restaurant; and finally, the return of travel. So how do we achieve all this? It starts with significant investments that we've made in the team. Within leveling up the team and restructuring the team, complementing our power veteran team, over half of whom have been with us for over 5 years, and that really speaks to the power of the culture here at Cardlytics. We're focused on creating the right structure to support innovation, growth and continued relationship development while streamlining day-to-day operations. To that end, we've brought in more senior relationship and sales talent. This team is being led by Sean Welsh, a 25-year plus veteran helping banks optimize marketing loyalty programs. We've rapidly brought on the Dosh partnership team with their continued focus on growing our neobank footprint and partnering with product and engineering to keep up with a rapid but exciting pace of feature and function development for our edge [indiscernible]. We created an insights and solutions team, housing our analytics team and a solution consulting-type team with talent hailing from Merkle, Epsilon, Visa, KPMG and Fjord, Accenture and the world's largest experience and service design firm. They're also focused on partnering with products to develop and test engagement strategies with our banks, with the sole focus of helping our banks fully understand the total value of their programs, making their internal cases for growth and investment and delivering the best and most rewarding experiences to their customers in a way that best embodies each bank's unique brand and program. And finally, we created a bank success organization, focused on flawless execution and bringing the best Cardlytics to bear for our partners on a daily basis. So what do our banks really want? We created this entire new category of customer value over 10 years ago. And a once nice to have has now become a cornerstone of the bank's loyalty and engagement programs. And our banks are asking for more. They're asking for more of what we do best. They want more content. They want differentiated content. And they want more engagement. And engagement is defined not only through interaction with their offers programs but through how the program integrates seamlessly into each partner's broader engagement and customer journey ecosystem to deliver relationship deepening value well beyond the reward. We are continuing to invest heavily in our major U.S. Bank relationships. We're partnering with them to evolve their programs, expanding, offering loyalty experiences, enhancing the user experiences engagement that Akker spoke quite a bit about and helping with mergers, Truist and the growing PNC. So starting with the new addition -- the newest addition, U.S. Bank. Their program is now fully launched across both mobile and online banking platforms. As Michael highlighted earlier, they are our first partner on the new platform with the UI that's anchored in the richer imagery, category filtering and enhanced program education that I just have to reiterate is driving a phenomenal early reads we're seeing with 50% more engagement than we saw with our most recent bank launch. We're also launching co-brand cards this year, which will have a -- which will significantly expand the program reach for U.S. Bank and for our program. And of course, our big banks, Bank of America devolving its program to provide a more seamless, connected and expanded offering loyalty experience, and we are thrilled to be partnering with them on this journey. Chase continues to take full advantage of our platform by reinvesting their own loyalty marketing dollars into the program with a focus on driving audiences and brands. They've launched new grocery category level offers, are rolling out local offers, leveraging the Cardlytics platform for their small business clients in select markets. We've also partnered with Chase and Eureka, a company focused on bringing small businesses, majority of them minority-owned, the strategies and tools historically only available to larger organizations, to deliver that initial Chase-supported biodiverse campaign across a few local DMAs and markets. We're excited to expand this with Chase into evergreen programs for Chase and Eureka and, most importantly, to small businesses who will benefit greatly from advertising the Chase offers. Chase is also, as Michael mentioned, on track to take the new Cardlytics ad server and UI by the end of the year, which will continue their engagement growth trajectory. And Wells Fargo continues to grow its program after launching in 2020, and we expect them to hit full stride later this year. Cardlytics is also deeply committed to serving our neobanks and fintechs. And we expect our recent acquisition of Dosh to accelerate that progress. We're on track to double our partner base by the end of the year, adding to our impressive existing power [ bank ] partnerships that we see here. Strategically, neobank and fintech partnerships provide Cardlytics the opportunity to iterate solutions rapidly, explore new business models and access new and different demographics. A couple of great examples of that include our continued focus on growing our Venmo partnership. In Q2, we will deliver new engagement offer constructs to drive early tenure engagement. For the balance of the year, the team is focused on expanding rewards to additional payment types, creating a rewarding experience with Venmo regardless of what payment instrument the consumer uses. The team continues to deliver flexible solutions, allowing our SDK to feel unique within each of our partners' ecosystems. A great example of that is the Women on Business campaign that we executed with Ellevest. Together, we sourced and launched a unique merchant collection of 119 women-owned businesses that were unique to Ellevest, instance of the SDK, driving value for cardholders and staying consistent with the Ellevest's mission. We firmly believe that our focus on neobanks married together with our traditional FI partnerships will continue to give Cardlytics a unique advantage in the market. And looking ahead, we are excited to align around SKU and transaction integration opportunities with Bridg. We're continuing to evaluate the product and our bank partners' additional value-added enhancements and services that will deliver even more value for our bank partners and their customers. We're exploring synergies with bank-funded loyalty programs, bank-driven commerce experiences and providing offer construct support for new financing vehicles, the likes of buy now pay later that will benefit both our bank and our advertising partners. We'll also continue to invest, along with product, in our teams, supporting the build and partner integrations for enhancements, including currency conversion, pay with QR code, currently live at Venmo, and explore the potential to expand the Dosh travel booking capabilities across our partners. The acquisition of Dosh also brings great channel partnerships that represent both content partnerships as well as deeper solutioning opportunities with both banks and our nonbank growth areas in the future. Speaking of nonbank growth and MAUs, that will be an area we start to more fully explore starting in 2022. So key takeaways. We've significantly grown and restructured the team to better support and grow our partner relationships. Our large bank relationships are thriving, and we're focused on supporting their move to the new ad server and UI over the course of 2021 and throughout 2022. Our new MAU growth is focused on large neos, where we'll be able to rapidly innovate and explore new business models. And finally, we are investing for the future as we partner with our banks to help them deliver and capture loyalty further into the commerce journey and also evaluate new adjacent growth paths to expand beyond bank MAUs. So that's a wrap for me, and I'm happy to answer any questions.

Thank you, Farrell. First question for you. Can you talk about the importance of Cardlytics to the bank? Some investors question how important it is to the CEO of a big customer. But somewhere in their organization, there's someone that considers Cardlytics to be very important and a strategic revenue generator. Is it someone within the card organization, the digital banking or marketing or brand organization at the banks? Can you provide a little color there?

Absolutely. So our typical clients, it varies, typically, within the card, either credit card or debit organizations and oftentimes in digital and experience. And we absolutely provide a critical revenue source and opportunity for our banks, but most importantly, an opportunity to be a cornerstone of the loyalty and rewards programs that have utmost importance across all of our banks and, I would say, the CEOs as well.

Thank you. Next question, what is the ARPU opportunity at neobanks relative to current banks?

The ARPU opportunity at neobanks is actually greater because the neobanks, this is their core loyalty program, and they're not nearly as focused on the revenue because they are laser-focused on growing their base and see this as an engagement opportunity.

Thank you. How do relationships or the approach differ between large banks versus the long tail or smaller FIs?

Yes. Absolutely. I've come from a couple of large banks. And it is a slower process when it comes to making movements in a sea of priority. So in general, our larger banks have much more focus, but it takes longer, whereas our neos are moving very quickly as many of them have even found their own legs as companies over the past couple of years.

Can you discuss overall MAU engagement level? And also how U.S. Bank compares to that?

Absolutely. Overall, our MAU engagement level is great, but it's been fantastic over the past month to watch what even more focus on driving engagement, bringing in the level of education to explain the program and overall kind of launch engagement tactics has led to, as we said, the 50% engagement increase over our most recent bank brokerage.

Thank you. We have one more question here for you. What are the challenges around neobanks that may be different versus more traditional FIs? And how do you need to approach them differently from an ad perspective?

So I wouldn't say challenges, I would say opportunities. Because the neos, because they're so used to moving very, very quickly themselves, are constantly pushing us to innovate and evolve as -- at their pace, which we are surely doing our best to keep up with.

And one more. How practical is it to expect large banks to adopt the new UI?

Look, our large banks want to drive as much engagement with their program as possible. And they -- our team, our experience, our growing team with the integration with Dosh as a key source in helping them evolve even with our banks that have -- integrated, I mean have long-standing and expert design teams. We are absolutely locked arm hand-in-hand with helping them evolve into the best version of the combined user experience.

Thank you. We have no further questions. At this point, I believe we're going to take a -- about a 15-minute break for everybody on the line. So if we could reconvene in about 15 minutes, that would be great. And then we will proceed after the break with Peter Gleason, our President of International Operations.

Thanks, everybody. [Break]

Okay. I think I'm ready to begin. Rob, if you could move on to the next slide. Hi there. I'm Peter Gleason. I head up the International business for Cardlytics. I joined Cardlytics 4.5 years ago, having spent the previous 25 years working in grocery retail, CPGs such as Gillette, Mars Confectionery and Kimberly-Clark, and their associated agencies, dunnhumby, Aimia and Catalina Marketing, where I set up and grew businesses in over 20 countries around the world. Click the next slide. Today, I'm going to focus on 3 areas: an overview of U.K. business performance, an update on our international expansion plan, together with some detail of our new open banking platform that we launched in the U.K. last week with Sainsbury's and Nectar. Click the next slide. But first, I want to start with an introduction to some of my international team. The team has vast experience, both within and previous to Cardlytics. Innovation, commercial and operations are key drivers. The culture is very strong, and I'm delighted to announce that thanks to the efforts of the entire team, 2 weeks ago, Cardlytics was rated as one of the top 10 small companies to work for in the U.K. with a maximum 3-star world-class accreditation, which is the highest standard of workplace engagement. And critical to this rating is that it's based on employees' anonymous feedback, a real testament to the tremendous effort the whole team has put in to making this a great place where people want to be. So we're focused on 3 key areas: First of all, a strong drive on profitability as we start to come out of the COVID pandemic. We're beginning to see some positive trends despite the fact the performance of some of our key sectors, such as pubs and dining, grocery and travel, remain muted by restrictions and ongoing ambiguity around new variants and vaccine effectiveness that threaten a third wave here in the U.K. However, we're hopeful that once restrictions are completely removed, we'll see a gradual return and improvement in performance over the back end of quarter 3 and through quarter 4. And as we began this journey to recovery, we are looking to build our MAU base through the addition of new publishers across both banks, neobanks as well as through non-FI solutions by our open banking platform. Again, our focus here is on growing scale, profitability. In terms of international expansion, we have work underway to identify our key priority markets and how these should be phased. We're focusing on the economic attractiveness of each geography, the extent to which we can tap an unmet need and have a right to play, and then to determine the most effective market entry route across the full range of capabilities, Cardlytics, Dosh and Bridg. Additionally, open banking now becomes a potential market entry route too, with the ability to develop programs for key non-FI publishers. A key commercial feature of the open banking proposition is 0 revenue share. After the successful open pilot -- open banking pilot we ran last year, we have fully developed the white label platform that we launched last week. I'm now going to dive into more detail on that, together with a demonstration. It's worth pointing out that the international team has been able to develop some of the key test and learn capabilities for the overall business, and open banking is a good example of this. So what's open banking? Open banking came into effect across Europe in 2018 as part of the European Union's payment services directive, second version, commonly known as PSD2. PSD2 has been designed to drive increased competition within financial services by making consumers' financial data more portable. The PSD2 legislation requires all banks and payment account providers to provide via our APIs, a secure way for the customers to share their payment data with regulated third parties. So for example, when applying for a loan or a mortgage, rather than having to provide paper financial records or statements, consumers can simply connect their bank accounts to the financial services provider in order to demonstrate their financial history. PSD2 also provides a new set of payment rails that enables consumers to move their money between banks. And even though open banking is relatively a new term, its scope is already evolving towards a more general open finance that includes a wider range of financial services products such as in pensions and investments. In summary, open banking puts the financial data in the hands of the customer. They choose who to share it with. Next slide is why our -- why is Cardlytics -- why is open banking important to Cardlytics? It's important for 2 reasons: firstly, momentum is growing. A number of markets around the world have already implemented or are reviewing the legislation that mandates open banking. And a number of these markets are looking at both the U.K.'s technical and governance model as a template for their own implementations. Where open banking has been implemented, propositions are emerging across the ecosystems from big banks through to neos and fintechs. However, no one has established a scale solution for accounting [ stoppers ], which provides us with a huge competitive advantage. Open banking, therefore, becomes an additional market entry route for Cardlytics, where we can leverage our U.K. experience and open banking solution. The opportunity is the creation of a new publisher network, diversifying our MAUs towards a nonbank customer base. We will create an advertising network across scaled merchants in key sectors such as retail, restaurants, telecoms and travel. It means that these large merchants become publishers of our advertising and offers in the same way as our banks do today. But importantly, our open banking commercial model does not involve any revenue share with these publishers. Our white label open banking platform allows us to create targeted offer programs for merchants. We enable the merchants' customers to be able to share their open banking data in return for high-value offers. Cardlytics can see up to 3 years' worth of historical transaction data across all the payment accounts that a customer is connected. And as a result, we can personalize offers based on customer spend data in the same way as we do for our banks today. We process all of this data in a bank grade environment without using any personal identifiable customer information. Open banking platform provides merchants with 2 key benefits: Firstly, we know the economics of funding both motivated and valuable customer rewards has been increasingly difficult for merchants over previous years. As a result, loyalty engagement rates have been dropping. Therefore, the cash back that customers can earn from high-value Cardlytics-sourced offers can be turned into retailer-specific value that help merchants enhance the value of their own loyalty or rewards programs. For example, our cash back offers can be turned into merchants' own loyalty points, enabling customers to earn more meaningful rewards more quickly than through the current merchant's baseline earnings rate. I'll share an example of this in a demonstration in a moment. And secondly, these targeted offers act as a real value exchange for customers to allow access to their open banking data. And this transactional data enables merchants to gain a deeper understanding of where customers spend, not just in their stores but across all areas of their lives. This is a strong proposition that following a pilot last year, Sainsbury's started the rollout of our open banking solution last week. They branded the proposition Nectar Connect. As background, Sainsbury's is the second largest grocer in the U.K. and Sainsbury's owns and runs Nectar, the largest coalition program in the U.K. with 19 million customers. We soft-launched the proposition last week; mainly it is available to Nectar customers, but we deliberately did not have any proactive marketing support or messaging. We want to ensure that we have a few weeks with a large number of customers cycling through the end-to-end customer journey before beginning e-mails of marketing activity to the scale base. Once at scale, Nectar Connect will be the largest open banking launch in the U.K. and potentially the largest globally. To bring this to life, I'll take you through a real demonstration of Nectar Connect. Nectar Connect is embedded into both Nectar's mobile app and website. For this demo, I'm going to be using Nectar's mobile app, and this is a real demonstration of connecting a real bank account. On the home screen, users are presented with a large navigational panel introducing Nectar Connect, outlining how they can unlock more points and earn up to 30 points per pound when they shop with a linked payment card. To put this into context, buying shopping at Sainsbury's or fuel at Shell gives Nectar customers 1 point per pound. And this is one of the key benefits for merchants, the ability to help their customers earn more value from their loyalty programs faster. Tapping on this panel takes users through to an overview of the Nectar Connect open banking program with key messages focused on the fact that consumers simply need to link their frequently used payment cards, activate an offer and then shop as normal. There are no coupons, nothing else to remember. It's a frictionless customer experience. High-value offers are personalized based on how consumers shop using their transactional data. And the entire experience puts the customer's privacy first with all data stored in a bank grade environment and consistent with our core bank programs. Cardlytics powers the Nectar Connect program without using any personally identifiable customer information. There are 3 key stages to the regulated open banking journey. The first is to ensure that the consumer has provided consent for linking their bank accounts. Here, we ensure the consumer can see an opt-in to all the program and open banking terms and conditions. Next, the user selects which bank account they want to securely connect with Nectar. Consumers can currently search from 27 U.K. financial institutions, including every High Street and neobank. For this demo, I'm going to share how easy it is to connect main accounts by connecting my Barclays account. So I confirm I want to connect my account, then I'm automatically taken through to the Barclays mobile banking app, where I use my normal way to log in, whether that's using face ID, a fingerprint or PIN number. There's no stumbling around trying to remember bank account user names, passwords or memorable data. And the last stage is then to authorize which accounts I want to share information from. At this point, Cardlytics can now see up to 3 years of transactional history. We refresh customers' transactions data daily in order to check for qualifying purchases. Once I've authorized those accounts, I'm taken back to Nectar Connect, where I can see confirmation of successfully linking my account. I will also receive an e-mail to confirm this, all designed to reassure customers that they have successfully linked accounts. The office hub is a focal point to the program, where a user can see the value of the points they've earned from the Nectar Connect program. The accounts they have linked. As you can see, I've also added my American Express, Monzo and NatWest account to my Nectar Connect profile. Any new personalized offers based on the customers' everyday spend, in exactly the same way as we do in our current bank programs. We have a series of high-value everyday welcome offer brands such as Just Eat, Costa Coffee, Papa John's Pizza, Interflora and Pets at Home. Here is the coach offer. Customers can click to see the details of the offer and terms and conditions if they want to, or simply activate the offer with one click. And once an offer is activated, it can be viewed in the activated offers tab. By the settings icon, the user can also manage their account, reviewing bank connections or removing accounts they no longer want to link, see any expired offers or access the program's terms and conditions for any help. Our white label open banking platform provides partners such as Nectar with a frictionless way to reward their customers with high-value offers, personalized based on a deep understanding of their customers' everyday spend. Nectar Connect soft-launched last week with 0 support. Already, over the first 7 days, more than 65,000 customers have opted in, given us access to their banking data. We have processed over 100 million historical transactions and issued over 760,000 Nectar points on over 2,000 successful redemptions. The early results are really encouraging, but we know that the first 90 days of the program will be critical to determine ongoing customer engagement. So we will be keeping a very close eye on every open banking program metric before Nectar's full marketing push starts in July with activity through to the end of the year. That's the end of the update of the international business. I'm happy to take any questions that you might have.

Thank you, Peter. First question for you. Has the U.K., the environment in the U.K. improved from the first part of this year? What's that bounceback look like? And how long do you think it takes for the U.K. to get back to pre-COVID environment?

I wish I had a crystal ball. It's hard. The market has been hard hit. The economy has been hit. We've been in lockdown for a long time. And while that lockdown is starting to ease now, a lot of our industries have been hard hit, and people aren't spending the money. We still can't get on a plane and fly anywhere. Travel is restricted. Restaurants have started to open up, started out outdoors, which isn't great in the British winter and spring, as you know. So they're starting to go indoors at the moment, again, limited to the number of people. Hotels have started to open, but again, restricted. So it will depend on the variants that we're having. We're having the delta variant here at the moment. The next stage, the next announcement will be on Monday when the Prime Minister announces whether we go to the next stage of lockdown -- of coming out of lockdown. There's debate everywhere there, that will be the case. Again, I wouldn't want to predict when that will happen. But we're seeing some signs that we're recovering, but it would be dependent on lockdown and restrictions. The good news is vaccinations is going very well here. But I haven't a crystal ball, I'm afraid.

That's fair. How do you expect open banking contribution margins to compare to the contribution margins of the traditional business?

I mean open banking is a strong proposition for us because we don't give a revenue share. We obviously have the offers in there, but we keep 100% of the revenue to ourselves. The good news about open banking, the things that I'm really excited about is that, certainly, Nectar, and I think as we move into other similar verticals, these people are really strong marketeers. The CMO of Sainsbury's is a world-class marketeer, and they are looking to push their program in a variety of ways. And obviously, this is the new, the latest big version of how they can get more of their customers attracted to the Nectar brand and earning Nectar points that they can then go and redeem in Sainsbury's and Argos and in their other outlets. So we think that Nectar is going to get behind it strongly, both with marketing and with e-mails and with media. And it's a strong commercial model for us.

Thank you. Beyond the U.K., which regions or countries are the most immediate opportunities on the open banking side based on what you know today?

So if you look at open banking and where it's rolled out, obviously, the EU right away across Europe have taken open banking. It's gone through Asia, into Australia, into some of the South American countries. So it's already adopted in a lot of those markets. So that will be obviously an attractive solution for us when we look to get there, working with the bank, but working with nonbanks as well. So having what we believe will be the largest open banking solution with one of the biggest and most well-regarded retailers in the world will be a great benefit for us when we go into our international expansion. But I'm not going to name any markets as yet. We're into that process at the moment.

Great. What are the main pushbacks you're receiving from large banks such as perhaps Barclays and HSBC with respect to implementing Cardlytics' core rewards platform?

Both our existing banks and all the banks that you'd imagine that we're talking to are very impressed with our solution. And I think even more impressed when they see the direction that we're going in as a business. When they see the great new solutions that Michael Akkerman has been talking about and sharing with you today, we've been sharing those with them. We've been sharing the opportunities that Bridg or Dosh can bring to the party. We've been sharing the great experience that we've got in open banking, how that can help. The banks are all doing the HSBC, the Barclays are all doing some open banking capabilities. But it's more around sort of Mint Star solutions where they're able to see all of your bank accounts, your accounts and your Barclays account with the HSBC, et cetera. I think what we're bringing to the party now and this whole end-to-end solution that Cardlytics can offer is really exciting, not only our existing banks, but new banks that we're talking to be that neobanks, but also the large banks as well.

Sure. And last question, Peter. What allows you to not take the revenue share from banking clients versus traditional IFs?

It's a new solution that we've gone in with. The loyalty cardholders and the -- anyone with any big -- this isn't just a grocery loyalty. This is anyone with a big set of customers. It could be an airline, it could be a coffee shop. It could be a restaurant chain, it could be a hotel chain. They all have their loyalty programs and they earn money from that program. When we started having the conversation with them, that's a commercial conversation we have. But the value that we bring in our rewards, but also running this open banking program for them, is very strong. And of course, they also get the data from understanding more about their customers. Sainsbury's have always known all about their customers, about what they buy in terms of their stores. What this enables them to do for their core customers to be able to understand and be able to work with them in different ways by knowing more around their life outside their stores. So we have a strong offering, strong proposition. We think we're the furthest ahead anywhere in the world on this, and that's something that we have gone with, and we will remain with the 0 revenue share.

Thank you very much, Peter. With that, we are out of time for questions. And...

Thank you very much. I would like to pass over with a great pleasure to my friend, Amit Jain.

Good morning, everyone. My name is Amit Jain. I'm Founder and CEO of Bridg, and I'm really delighted to be here with you all. This is my first interaction with all of you here with Cardlytics. Before I begin, I really want to start with really thanking Lynne for welcoming us to the family, really giving us a platform to build our combined and shared vision to go change the word. When I first met Lynne, almost over a year ago, she shared her vision what she had when she started the company of creating the data team, combining the data that banks have with the data that point-of-sale systems have. We both really clicked on that vision. Fast forward a year, we are here in the same family. Today, my goal is to really introduce you to what Bridg has really built and how we come together as 2 companies into a single product to a unified vision, which we believe is about to change the world of advertising in the retail, in the CPG in a way that has never been done. Advantage that was only available to companies like Amazon will now soon be available to every single brick-and-mortar retailer out in the market. With that, let's begin to learn what Bridg is really all about. Good news is Bridg is a very simple product. The problem we saw is a very, very simple problem. Brick-and-mortar retailers just don't know who's coming into their store. Who is shopping? But if you are an e-commerce business, you know every single thing about them. Why is it fair for e-commerce business to know everything about you, but a brick-and-mortar business to know nothing about you? And this is the problem that everybody is trying to solve. And the way they are solving is to launch a loyalty program. And we all know, we all are part of one or the other loyalty programs. At airlines and hotels, loyalty programs struggle to succeed, struggle to adopt any high degree of concentration or adoption of membership base. Even the best program -- for example, a major coffee retailer. They publicly reported after a decade of loyalty program in the market, they could only acquire 12% to 15% of their customers. A decade. They spent a decade to acquire 12% of their customers, and they are invisible, blind to 80% of their other customers. This is the problem we got to solve. We can't let -- have only e-commerce companies have this visibility. And that is the problem Bridg saw. We launched the first platform that helps a brick-and-mortar retailer to identify and know their customers in a privacy safe, anonymous, in a real manner where you know everybody individually, all within the legal compliance, legal umbrella of CCPA and all the appropriate laws that exist today. Our ability to create this fundamentally transformed the physical brick-and-mortar retail industry. When we took this message to these prospective clients, talked to their CEOs and said to them, "Now we can tell you as much about your customers as Amazon or somebody like them knows about their customers," they fundamentally didn't believe us. But once they give us a chance, we prove ourselves. And here we are a year later, with Cardlytics, a fantastically growing company that I'm going to talk more about in a second. So how do we do it? How do we do it without a loyalty program? So if you go back, what is the loyalty program? A merchant gives you a new card and asks you to use this card every single time you go and shop with them. And now you have to use your payment card and you have to use -- remember to use this other card. And if you don't, you don't get your point. And if you don't get your point, you get on the phone and try to get the guy to give you your point back, give you your birthday gift back, and it's really painful. We said consumers are already using a payment card to tell you who they are, and your POS system is recording enough information about it, but it's not everything about it. It's not who you are. Bridg was able to use all of the signals available in point-of-sale system anonymously, apply some AI and machine learning to that data to really create an anonymous individual profile of these consumers entirely from first-party data from within the POS system. Very important point. All of this is done with the first-party data that merchants have complete and full rightful ownership of. We are able to use that data, apply AI and machine learning to it and turn that into individual, anonymous, privacy safe, customer profiles, which have longitudinal history of every single purchase this consumer made down to the SKU-level items. That's the magic. Now you know every single customer as if you would have in the loyalty program but without having to launch one. And better yet, you don't have to spend a decade to get to 12% of your customers. We can go back in the history and build a decade of customer history overnight and give you every single consumer, what they have done with you over the last decade and, of course, going forward. Once you have this level of knowledge, now you're on the level playing field with any major e-commerce business you're trying to compete. And you take this knowledge and you apply it to basic core business use cases, be it learning your customers, what they are doing with you, how they are shopping with you, how they are switching the product or engaging them. Imagine when you have this data, you quickly look at it and see, oh, look at here, 5 million customers who shopped with me in Q4 of last year have not shown up this year at all. Why wouldn't you want to reach them? Why wouldn't you want to get in front of them and give them a small incentive to come back and shop back with you, and you can do that with Bridg? Bridg connects all of those anonymous profiles that we create from your point-of-sale data with every single digital marketing platform out there today. Or let me just say it more factually accurate. Virtually every single platform, I'm sure there's something that our advertisers haven't thought about, but we can connect to virtually every single platform out there. And that allows advertisers to go to any of their unknown customers now unknown to them through Bridg and reach them, engage them on any advertising platform of their source. And the best part is if you go around that campaign and if that consumer comes back and shops with you again, Bridg can tell you that consumer came back, shopped with you and bought product X, product Y and product Z. And that is the level of knowledge that never existed even within the major advertising walled garden platforms today. Bridg has fundamentally changed how advertisers can think about their customers and how they can engage them and create and grow their business. Our ability to create this data has allowed retailers, especially grocers, big-box retailers, to, for the first time, have very large scale and reach of their customers and every single purchase history, even for the SKUs that only sell to a very small portion of the customers. This data has fundamentally created a transformative opportunity for us to go and disrupt how CPG companies work with their retailer partners in utilizing this data for advertising, for growing their individual brands, working with their retailer partners. And we all know with the way the privacy is going, no retailer wants to send their data to some third party to go aggregate, especially for this PII. We have been able to create a platform that allows CPG companies to interact with retailers in ways that was never possible before. Retailers, with Bridg, own their data. They control the data. They decide who gets to see what. A retailer on Bridg platform can choose X number of CPG partners they would like to share their data with. They can share that data with their CPG partners through the Bridg platform anonymously, in a privacy safe manner where that CPG partner can actually use that data for analytics and marketing purposes. And that allows CPG companies access to their consumers inside of retailers' environment at scale in places where they can do something with it. They can actually act on it. They can measure results from this. And best part is, over time, as CPG companies have more retailers sharing their data through the Bridg platform with them, they will be able to look at a more unified picture, a simple, seamless environment to manage multiple retailer relationships at the same time, while retailers can manage multiple CPG relationships. Just to caveat and explain this here, what I'm presenting here is our vision. This is the path we are building our product towards. All of this is not live today. But in the spirit of sharing where we are headed and what our combined vision looks like over time, in coming quarters or years, you will hear more about this as we go along the journey. With that in mind, I'm really excited to tell you that I've spent a year -- about a month here at Cardlytics, not years like many other people in the room, but it's been incredible. The culture at Cardlytics, the people here, it's been phenomenal. And if you imagine what Bridg is bringing to the table with the SKU-level data, first-party data, merchant-owned data and the data that Cardlytics has that you all very well understand, allows a retailer to, for the very first time, understand what their customers are doing with them and outside their business in the horizontal view. Of course, there is a lot more for us to solve there, working with our banking partners, privacy lawyers and bringing it all together in a way that allows us to go fundamentally change the industry. If you bring this view of customer together, with truly a 360-degree view, what they're doing with you and outside you will be the table stakes. Can you imagine, as a CEO of a major retail organization or CPG organization, running your business without knowing your customers entirely and fully in the full context when your competitors know that? And that's why I believe this partnership with Cardlytics and Bridg is going to change the world of advertising for good. And I believe a far point in the future, companies that change the normal level of working today to a new normal, they never look back and they really change the society forever like Cardlytics did a decade ago. With that, I would like to thank you once again for the opportunity, and I'm delighted to be here and happy to take some questions if there are any, and I will pass.

Thank you, Amit. We do have some questions. First one for you. We understand that Chipotle is a large customer. Can you discuss the contract negotiation?

I probably would not want to be discussing a specific customer, especially on my first call here. And I'm sure Cardlytics in general probably doesn't comment on any individual customers. But if there was something factual and more concrete and material to share with shareholders, I'm sure we all will come and happy share with you. At this point, I really do not have any information to share on that.

Understood. Next question, what is the difference between Bridg and other CDP players? How sustainable is your moat?

Yes. Good question. I think CDP, as you all know, have accelerated quite a lot, especially in recent times. And fundamentally, the job of CDP is to organize customer data and make it available or actionable across marketing ecosystem. And there are many companies who were previously a DMP or in some other category have really rebranded all of them to be CDP. And yes, they do a job of CDP. But what they all want you as a merchant or you as a retailer to do is to bring the clean and nice data to put into those CDP so you can use their products. But imagine a physical brick-and-motor retailer. They don't even have 90% of their data. Bridg creates that data from their own first-party data. And I have not come across a single CDP yet that does that. We differentiate ourselves in ways that we have not seen anybody else doing it. We believe we are the CDP of choice or should be a CDP of choice for anybody who's got brick-and-mortar footprint because we are the only company that can create that data. CDP is only as good as the data in there. And Bridg creates the data, and we believe that has allowed us to really accelerate and have the level and the quality of clients we have today and the level of happiness that we have received or shall deliver to them.

Thank you. Next question. Can you discuss the transition -- Bridg's transition from restaurants to big-box retailers?

Yes. It's a journey like any other start-up. It is a very deliberate process that start-ups go through with limited resources. You choose your focus areas, and restaurant was a focus area where we spent quite a bit of time perfecting our product, scaling our technology, making sure we got that right. And once we got that right, we started to expand. And in all sincerity, to share with you, when we started to expand, it accelerated beyond our expectations. We expected to have 1 or 2 clients in those verticals, and we were very surprised that within a very short period of time, we got so much interest and acquired many clients who are actually fully live on the platform today, and all of this happened during the pandemic. And I believe pandemic has accelerated the digital adoption at different companies, which is also a tailwind in our business, which we expect to see continue to deliver more results for our business in this area. But again, it is still early in our journey in those verticals. And as we learn more, we'll come back and share more with all of you.

Thank you. What does Cardlytics bring to Bridg beyond scale and support?

Scaling and support is very important, but let me go back to the point I was making. If you would want to really understand what these 2 companies fundamentally change in the world is you've got to understand our underlying assets. Cardlytics gets to see almost 168 million MAUs across major banks with every single spend across wherever they go. Bridg gets to see inside our clients every single purchase item they buy. If you combine the 2 sets together and if you want to understand the consumer holistically, you want to know as a merchant what that consumer is doing with me, what are they buying from me, how often they are buying from me and what are they doing outside my business. And that clearly what creates a true view. And I believe there are no other 2 companies who have these 2 complementary data assets to bring together to create a competitive -- or competitive product in the market. And I think really that's what Cardlytics brings to the table. Of course, scale, support, capital and the platform is very important. It allows an acceleration of this vision, but that is what fundamentally creates the shareholder value. And that's why we believe if we do our jobs right, every single marketer in the world needs to have this product or they're going to be missing something. And that's how much I believe in our combined capabilities that's, of course, not there today, we are just starting to have those conversations, but we'll get to that point.

Thank you. Who do you sell to at the customer? Is it the CMO, the CIO, the CEO?

This is another very good question. So of course, our buyer in most cases is the CMO. However, probably 70% of our customers today, Bridg has CEO-level relationships. And why? Why the CEO cares about a product that marketing is using or analytics team is using? Why? Because we fundamentally changed the vision for the CEO, the dashboard for the CEO, the visibility of the CEO into his own business in ways that was never possible before. If you're a CEO of a major organization today and if you don't understand your most important asset, which is your consumers, at the level that Bridg can teach you about, I think you're fundamentally missing that. And that has -- that strategic importance of Bridg allowed Bridg to create a lot of CEO-level relationships. And it has really given us a platform to accelerate our business in a strategic way. I believe we not only sell a product but we have a strategic seat at the table with the leadership at these companies. But once again, we are bought by the marketer. But in most cases or in many cases, CEO or another C-level person is involved and very influential in the process only because of the importance and the strategic value of what it brings to the table.

Can you discuss a little bit about how Cardlytics transaction data is additive to...

Can you please repeat the question? I think you broke up there for me.

Sorry. How is Cardlytics transaction data additive to Bridg's data? How does the data augment Bridg's insights?

Once again, Cardlytics gets to see -- if you are a consumer, Cardlytics get to see everything you spend your money on as long as you are a consumer of one of the Cardlytics' [ clients ], which gets to see what do you actually buy with that spend, exact items, if you happen to be shopping at one of Bridg's clients. And if you combine those 2 data assets, you once again get to see, you as a consumer, what are you buying and where are you buying and where else are you buying. And that is really what combined technologies, combined data assets bring to the table.

Maybe one more question. Can you help us understand how you designed the Bridg Bureau? Are you still using data from POS systems? Or are you combining POS data with other data sets?

Bridg technology fundamentally is designed to only work with the first-party data that comes from our merchants and the rights we acquired directly from our merchants who actually own that data. So for our core platform to do what I just talked about, we only utilize point-of-sale data. And if our customers would like to use other data that they -- that is important to their business, we absolutely -- our platform can connect those data assets for that client. And they can, of course, use it. But our core platform works entirely with the data we acquired from our merchants and the rights we acquired from our merchants as part of our agreement with them. Well, with that, thank you so much once again, everyone. And I think I'm the last one between you and the lunch. Or maybe there is a comment from Andy here. So I'll pass this on to Andy. And thank you once again for joining us all here at Cardlytics.

First, I want to thank all the presenters today. I'll spend just a moment tying what you've heard back to our financial goals. We remain laser-focused on driving sustained long-term growth, and the team has covered several of the very significant avenues we are pursuing. To continue our growth in our user base as well as engagement, we've acquired Dosh, and that's enabling us to quickly add new banks to our platform. And the successful launch in Nectar Connect will provide a new meaningful pathway to expand our reach. The modernization of our sales efforts has us on a trajectory back to our $2.30 ARPU in the next couple of quarters. And then longer term, our investments in self-service and new offer constructs, including product level offers, will propel us towards our goal of high single-digit ARPU in the years to come. We're also on track to deliver many new capabilities via the new Cardlytics Ad Manager. And this platform will allow us to efficiently scale the business and demonstrate operating leverage. We remain on track to deliver on our Q2 and full year guidance. And I'm proud of the executive team as well as the entire organization for their contributions on our strategic initiatives, all while executing our 2020 plan. Either Lynne or I are happy to answer any of the last questions.

Thanks, Andy. One for Lynne. Can you discuss how you view the Cardlytics value proposition in light of the push towards privacy by Apple and others and limiting availability to track consumer data? How do you think this impacts platforms that, including SMBs, we use for advertising?

Yes. No, it's a great question. For sure, it's a tailwind for Cardlytics. The question is how big of a tailwind is it. We do not rely on any of those devices' capabilities, tracking tags that are in question with all of the privacy issues that are happening, most notably the Apple. But there's more than that, [ particularly with pixels and ] everything. We don't rely on that. So it's definitely a tailwind for us. The question is how big. And I do think that it does impact smaller advertisers more than it impacts larger advertisers. The top, call it, 200 advertisers in the country have long been gathering their own first-party data and then working more towards a more private environment, more privacy-focused environment, I think, than the longer tail of advertisers. So my hypothesis is it's going to help us accelerate our going after the longer tail of advertisers as we go into mid-market and even SMB in the future. It's going to be more of a tailwind for us. It helps us with the larger advertisers, but it's not as meaningful or significant because like I said, they haven't been relying on many of those issues, those types of capabilities and features for a while.

Thanks, Lynne. Another question perhaps for both Andy and you, Lynne. How are you feeling about R&D spend given the 2 recent acquisitions? Would you need to make larger investments internally to reach your long-term goals?

I'm happy to...

Sure.

So we've talked quite often about our operating leverage goals. We see tremendous opportunity in the business to demonstrate leverage over time. And the other thing we're looking to do is to definitely grow this business beyond the $500 million revenue goal that we put out there in 2023. And that's going to require investment. And so as long as we see very meaningful returns on our capital, we're going to continue to invest in those. And then that includes making sure that we are investing in international growth where it's appropriate and where we see great opportunity and then continuing to partner with our banks to build a world-class advertising platform. So I really think that we're going to continue to invest in R&D over time. And we're going to be trying to balance, showing that operating leverage of the core business at the same time. So we certainly expect to grow that R&D over time.

And I'll just add to that. We will be breaking out our financials. So you can see the visibility of what the core Cardlytics platform is doing versus some of our investment-focused capabilities and offerings. So we'll be breaking out Bridg next quarter. We'll be breaking out international as well so that you'll be able to really see that. And just to reemphasize, the $0.5 billion goal, it was pre, even knowing the word Bridg and Dosh. So Andy is right, we are way past focused on -- way beyond that goal as we're looking at our road map and we're looking at these acquisitions.

Excellent. Andy, can you discuss how the metrics around billings, adjusted contribution margin and EBITDA will be impacted as the self-service channel grows and Cardlytics moves further into the SMB market?

Yes. Yes. From an adjusted EBITDA perspective, yes, we look at the new self-serve platform in general as a very nice platform that's allowed us to go after budgets of all sizes. It's going to allow us to efficiently scale the business. And I certainly expect that as we look to expand to sell to agencies and SMB and the like, we're going to continue to see a lot of efficiency there. As it relates to our margins, we're on a journey. And it's difficult at this time to really give a lot of precise guidance around SMB. There's still a lot of questions. There's a lot of testing we need to do. I think the message here is that many of the platforms have gone along this journey. And they've all found an answer that works for them. And we're going to find the right answer as well. And it's going to take a little bit of time, a little bit of testing. But certainly, we'll be able to communicate that as that unfolds, and we are able to really give good clear expectations.

Thanks, Andy. We have a clarification question around the ARPU goals of $2.30 coming in which quarters and high single digits in the coming years.

Yes. Yes. Look, we've talked a lot about the $2.30 ARPU. That was our ARPU in 2018 before we launched Chase and Wells. And so obviously, having that dramatic increase of MAUs takes a while to grow the ad budget at that type of pace, right? And so we are really excited to get back on the pace that we were at in 2018 when we achieved that $2.30. I think we see that coming in the next few quarters. And honestly, we're starting to look beyond that. Once we get back to that pace that we were on, it's simply a matter of time for us to hit the $2.30 on a trailing 12 basis. And then Lynne and I have been very consistent in our really long-term views that there's really no reason why our platform can't achieve high single-digit ARPU levels like many of the other digital platforms that are out there. We have a lot of strengths. We're a fraud-free free environment, right, with people who are really thinking about their money. Well, we have some work to do on expanding our media capabilities. We can play to our strengths and get there.

Great. Thank you. And a final question here. What is a realistic time frame to think about for integrating -- integrated product that includes all the Bridg, Cardlytics capabilities and a better way to address the CPG big-box opportunity?

So as we kind of talk about integration, Bridg, one of the things that we need in order to integrate the data -- and the platforms and technology, probably less is integrated. What we're really talking about from an integration perspective is the data, bringing the horizontal view of data -- purchase data that we have from our banks with the deep understanding of what people are buying. And bringing that data together will unlock a lot of opportunity. And so that integration, if you will, will happen over time as we gain scale within Bridg and have a very compelling solution for the banks. We're all very excited for this new solution can create significant value for them and for their banking customers. So once we achieve that scale, we will have a platform and a new experience to support that data. So we've talked about that taking maybe a year for us to really invest and really help Amit and his team to get that scale. And we're laser-focused on that, and I have no doubt that we will get the banks there, and we'll have the scale and control over.

Thanks, Andy, and I want to thank everybody for their questions. With that, I'd like to turn it back to the management team for some closing remarks.

Yes. Thanks again for everyone on the management team that participated today. I appreciate the support from our investors and the interest from those who are looking to invest. We have an amazing, talented executive team that we put on here display with a lot of great energy and great ideas. So I appreciate the interest, and we'll be talking soon.