Perion Network Ltd. (PERI) Earnings Call Transcript & Summary

Hello, everyone. Welcome to Perion's headquarters. My name is Doron Gerstel, and we prepared a great live event for you. So let's begin. Everyone, welcome to Perion's Investor Day. Before we get started, I would like -- I must mention that the statements mainly in today's presentation may contain forward-looking information. Actual results may differ materially from what we are presenting today. The information you now see on Slide 2, that's Slide 2. On Slide 2 of the presentation, identifies and gives you details about some of the risks regarding those forward-looking statements as well as where to go to get more -- as well as where to go to get more information about our risk factors. With that, I very much welcome you again to our live event. My name is Doron Gerstel, as you've seen in the opening. I'm the CEO and Director of Perion. I joined the company April 2017. Together with me, Maoz Sigron, our CFO, and the entire management that we'd love to host you today in our event. So let's get started. We have quite a busy agenda today. We hope we're able to manage it in 2 hours. We divided our agenda into 2 parts, and there is another one in the middle. So at first, we're going to talk briefly about the last 3 years. And the last 3 years from the point of a turnaround, and that's something that I'm going to do together with Maoz. And then we're going to talk about our next 3 years, where we are heading, where is our North Star. We're going to talk about how it all fits together into a one very holistic solution. But in the middle which is a great connection between the last 3 years. And the next 3 years is very much has to do with 4 use cases that we selected. Those 4 use cases will be presented by our business unit managers as well as selected customers. Both of them are going to talk about the each BU, and this will be a way for us to demonstrate the importance of our customer and partners to our business and to our growth in the next 3 years. The last 3 years set the stage for growth. And I should very much to start, which I believe is the most important strategic decision that management took back then mid-2017. And the idea was for an advertising technology company, what is the best way to overcome the volatility of this sector. And we decided to adopt a diversification strategy. Diversification from the point of view of the Chief Digital Officer of any given brand, who is our main customer. And their decision that they need to make, it has to do with every year or in between every campaign, it's how to allocate it's digital advertising budget, allocate it based on the 3 main pillars of digital advertising budget. One has to do with social advertising. The second has to do with display, including CTV, and we will elaborate a lot about the CTV. And last but not least, ad search. What you can see below here is the market and the total addressable market of those pillars. But most important, and the main takeaway from this side is when the Chief Digital Officer is moving its budget from one pillar to another because that's the journey of the consumer. The consumer is not very much saying, I move from social in my way to the office to display at the office and then to the CTV at the living room. Nobody informed the advertiser. So the advertiser is very much shifting budget between those 3 main pillars. And Perion capitalized on any shift in advertise budget, allocation between those 3 main pillars. We want to get the example why diversification is the right way and very much hedge any sudden move in this business has to do with the next one. And the next one is the slide, which I just -- we're all looking at the Google latest announcement that was coming end of last week. And with this, announcement, which they very much not saying new things because we were well prepared. The market was all tuned for 2022, where they said that they will very much abandon the use of third-party cookie. But look at it from the point of Perion's revenue, and that's the pie chart that you have here. So this diversification, which split it into the same color that I used before, is basically calling that only that search monetization for a good reason, search advertising is away from this announcement as well as all the assets that we have in owned and operated and all the things that we're doing very much on Facebook and content monetization. So what's left? What's left is very much the business of display campaigns. And within this display campaign, I'd like to share with you that only 3% of the total revenue or 14% of the display campaign may be affected. That's equivalent to a $10 million a year out of the $360 million that we are projecting. And -- but what we did and what we prepared a year ago for it. So first and foremost has to do with contextual targeting. Contextual targeting is our ability to match the ad unit into content and doing it in a way that we don't need to use the third-party cookie. The other thing which is going to be very important, that's to do with this limitation is that those that are doing standard ad units, standard ad units will be mostly effective. Those that are very much focusing on the creative side of display on rich media format will be less effective. The other thing that we did, we invested heavily on predictive analytics and machine learning in order to get the right match and less and less be dependent on the third-party cookie. Control via our owned and operated assets. That's another thing, which was everything is a first party. Cookie and not depend on a third party. And last but not least, the synergy between display targeting and search intent signal. We will talk about it more when we will talk about the search monetization business because everything has to do with the synergy that we have between the 2 very important pillar, the search advertising as well as the display advertising. With that, I would like to take a moment and look back on the last actually 4 years of what the company did, we announced just a week ago that the first quarter momentum is very much continued. The first quarter of 2021 is very much continue with the trend that we've seen in 2020. And we announced a 31% year-over-year growth between the first quarter of '21 and the first quarter of 2020. That allowed us to look very much on our guidance and we're looking about, at this point, 50% year-over-year growth, with growth, we talked about $370 million to $380 million on 2021. So what are the key growth drivers? First, has to do very much the Microsoft being partnership. We announced it on November 2, 2020. It was a very important announcement for us because we very much clear ourselves for the next 4 years, then -- and it was very important for all of our advertising, search monetization partners. They were a bit on defense. They were a bit worried during 2020, what future holds. And in this way, by securing the next 4 years, give them quite a relief, and we definitely saw it in the first quarter of 2021, will they renew their agreement and working with us even in a greater way than they did in the past. This partnership is something that we're going to discuss, but I can give you the highlight of it. Our forecast is calling for an $800 million of revenue in the next 4 years of this partnership. Accretive synergistic acquisition of Content IQ and Pub Ocean. Both companies have been acquired at the beginning of 2020. And I'm happy to say after a year that the synergy that we're able to achieve was beyond our expectation and definitely helping us, and I will talk about it where this synergy plays later when we talked about the next 3 years. Intelligent high-impact ad unit. Another very important factor on our growth where the market is shifting towards standardization. We believe that when it comes to what really matters for advertiser has to do with the creative. And the creative generate engagement level that they're not able to achieve in a standard ad units and the intelligent high-impact ad unit, more specifically. In a way where we are taking CTV into the iCTV, interactive CTV is definitely was one of the main growth drivers in 2020. With that, I would like to call by friend Maoz, our CFO, that he will provide more KPIs as far as 2020. Maoz?

Thank you, Doron. Good morning, everybody. My name is Maoz Sigron. I joined Perion in 2017 with more than 10 years' experience as a finance executive with NASDAQ-listed companies. Over the last 3 years, we have been leading a financial turnaround, resulting in cost reduction, debt reduction and improved cash position. All these achievements support our future growth plan. Now I would like to dive into the financial report. Over the last years -- over the last 4 years, we have reduced our OpEx level by 10% from 33% in 2017 to 23% in 2020. While our revenue increased by the earning 20%. Our SG&A to revenue reduced by 11% in 4 years, from 26% in 2017 to 15% in 2020. All of this was as a result of our consistent efforts to improve budget control to enhance process automation and to renegotiate commercial terms. In addition, during 2020, we acquired 2 synergetic -- 2 synergetic companies help us to reduce our OpEx level and improve efficiency. Over the year, we increased our investment in technology to 8% from revenue -- from 6% in 2017 to 8% in 2020. We will continue to invest in technology, which is the significant part of our differentiation from competition. Our efforts during the last year helped us to improve our balance sheet and enable future growth. Our debt reduced from $92 million in 2016 to $6.2 million at the end of Q1 2021. I am happy to share with you that today, we have completed our payment to bank, Mizrahi, and we fully paid the loan. We're expecting to have 0 debt at the end of Q1. Our net cash improved from minus $43 million in Q1 2016 to almost $120 million at the end of Q1. During January this year, we have completed a successful follow-on offering of $61 million with 7x demand. Now we would like to move to the next chapter on the Investor Day, powering growth. Thank you.

Thank you, Maoz. So the next part of our presentation today has to do with growth used cases. As I mentioned, we have 4 used cases, and I'm happy to introduce the next speaker, Dan Aks, Dan will present the concept of intelligent high-impact in the display advertising. Dan was focusing on to what extent, intelligent high-impact play a major role in CTV in a way of iCTV. Dan, please.

Hi. I'm Dan Aks, President of Undertone since September of 2019. I joined from the Perion Board, where I served for almost 16 months prior. Having seen the risk potential in Undertone, I eagerly accepted the offer from our CEO, Doron Gerstel, to join the company. My excitement was not unfounded as attested by our 2020 performance. Today, I'm here to discuss just 1 more of the rich opportunities available to Undertone that contribute to its client success in a way that perfectly aligns to Undertone's entire raison d'être. Specifically, the emergence of CTV as was likely to be the preferred video content viewing medium of our time. CTV consumption is driving huge ad dollars with wide and growing viewership. The pandemic contributed to soaring media consumption and adoption of connected devices is only accelerating. Habits have changed with less commuting time for work at -- working-at-home employees and only more video content will be consumed. The trick here, though, is how do brands make a strong impact in this new medium and being able to distribute their ads and not just be another commoditized video. There's an answer to that. So let's turn to Slide 2, which is the merit -- which is our focus on iCTV, iCTV ads are memorable ads, unforgettable results. iCTV ads are going to be the hero that fights commoditization of simple video distribution. Brands want to stand out. And they can use iCTV to be very creative. What is iCTV? Simply put, iCTV ads are ones that can be managed with a remote, allowing for the consumer to more deeply engage in the ads. When a consumer engages or sees creative ads, KPI soar. And you see how they're more memorable, is more time spent. There's more engagement. That makes obvious sense. This aligns perfectly though, with Undertone's intelligent high-impact ads that we do in display. Undertone is the known expert and leader in designing and structuring ad assets into ad units that consumers [ click on and ] engage with. So for example, look at the Mercedes ad to the right. The top portion is a typical video spot that you would see on your TV. But below that, notice that there are 3 video thumbnails. These thumbnails allow the consumer to click on those to get further insight into the Mercedes SUV. They could look at the dashboard. They could look at the interior. They can truly engage with this advertisement. Interestingly, that turns what amounts to a typical 30-second spot into a 90-second spot. Think about that for a moment, what that means to an advertiser and their economics when paying for advertising. Furthermore, in the future, iCTV is going to become iCTV version 2.0, which will be personalized through a term called dynamic creative optimization, which will make engagement and effectiveness yet even higher. These are all technologies that Undertone works with and is expert of using to create unforgettable results. In sum, Undertone can now take its expertise in digital ad design into entirely new world, television, opening up markets for our services that we can only dream about in the past and take more market share of advertising budgets. Our advantage is only buttressed by our ability to articulate our creative design and structuring expertise across multiple screens and formats, making Undertone a multi-point solution, not being limited to a single-point solution. So if you're an advertiser and you want to work with fewer people, and have the same creative articulated through your entire campaign that Undertone really is the choice to work with. Furthermore, we continue to reduce our cost structure through creative automation. We are driving a scalable solution for creative design, and that's our secret sauce. This is just another reason where my huge personal enthusiasm for Undertone's future. You don't have to just take my word for it. Next up is Bob Deininger, who is one of our largest customers from Norbella agency, who was expert at understanding the advantages of CTV, iCTV, future personalized TV and why he chooses to work with Undertone and use our solutions. Thank you very much. Bob?

I oversee the entire digital media team and analytics team. We've had a strategic partnership with Undertone for the last 7 years and have recently done some campaigns using Connected TV with Undertone. The world is changing. And Undertone has really helped us kind of keep up with what the trends and developments are. We're seeing the largest growth is, again, specifically Connected TV. And it's not just a pandemic. I say the pandemic has been an accelerator or catalyst. But the changes were already happening. And what we are looking to do with our clients is taking the sophistication of digital and digital targeting. And applying that to other channels. And the broadcast channel, the video channel is what we're seeing for Connected TV. One of our clients, Cybereason, which is a cybersecurity company. They help kind of prevent cyber attacks before they happen. And they in a very hypercompetitive field, and they have a brand awareness campaign to increase their visibility and credibility amongst target prospects. So we have sort of 3 different buyer personas and again, what we work with Undertone is looking at what the right data partners were, whether it's done in Bradstreet, to look at the segmenting and the data segments that we could use to sort of finally target those consumers. Undertone has the experience, again, through their use with other clients of understanding what segments will -- will work -- be the most efficient and effective at reaching the target. So we really rely on them to kind of help us think about what the right segments are to reach the personas. And the industry is dealing with, again, on the display side, the deprecation of third-party cookie. But again, you look at Connected TV and you look at some of the first-party data, that some of the companies have. And again, I think that's going to allow the Connected TV industry to continue to sort of not just look at third-party data, but look at the first-party data and maybe appending that to make sure that clients are reaching. The targets that are most interesting to them. We know there's the relationship there. We know that there's a team that has spent a lot more time thinking about the ways to sort of go to market, they have the relationships with the publishers, they've invested in the technology. Again, I think one of Undertone's differentiations is, again, the synchronized digital branding. So again, thinking about how a creative message can be delivered, not just the desktop, but Connected TV, mobile, tablet. And it's those situations where when we need that level of thinking and that level of service that we rely another chunk for. As digital is evolving, we look to our partnerships with Undertone to help us advise clients on the best ways to target digital, to measure digital and to improve performance.

Thank you, Bob. That was great. Our next speaker is, Ziv and Asaf, Co-Founders and Co-CEOs of Content IQ, a company that we acquired beginning of 2020, they will demonstrate our next business use case, which has to do with content monetization system, together with a good friend, Dev Pragad, the CEO of Newsweek. Ziv, please.

Thank you, Doron, and thank you again, everybody, for joining. My name is Ziv Yirmiyahu. And together with Asaf Katzir, who you're going to meet in a minute, we founded in 2014, the company Content IQ, which was acquired a little over a year ago by Perion. Asaf and I shared the CEO position. Many of you know of the enormous challenges digital publishers are having these days. Everywhere we look, we see publishers struggling with declining traffic and declining revenues. Even though during this time, ad spend is increasing at a high rate. Publishers live in a world where the major platforms, led by Facebook and Google, no longer intend to share free traffic with them. And the publishers find themselves being expected to pay for their own marketing just like any other industry. This dramatic change, combined with the publishers' channel finding a suitable business model from a monetization perspective, is an existential challenge to this industry. Now we will hear from Dev Pragad, the CEO of Newsweek, how we, together with Newsweek, were able to address these problem.

Well, it's no surprise that the big players like Google and Facebook have radically disrupted the digital media landscape. And quarter-after-quarter, year after year, they continue to grow. So what does this mean for digital publishers like us. This means we've got to be nimble. We've got to be adaptable and very agile. And this, I would say, is predominantly the biggest challenge all publishers face. And the second, which is connected to this is what do we do to sustain our added revenues. And what are the things we do to expand our revenue streams and probably sustain CPMs and grow them in this challenging environment, right? So for a big kind of an iconic brand like Newsweek, organic is a huge, huge part for us, right? Ad really is what the clients would want. And today, we are exclusively an organic website and a publication. However, we are always looking for ways in which we can expand our reach. And we tend to be very, very cautious when it comes to paid marketing and paid strategy. And we've been quite excited about the prospect of partnering with the premium brand like Perion, who have invested quite significantly into building a sustainable base value for publishers. I think what Wildfire and Perion bring to the table is deep expertise and know-how in finding this audience and increasing our network, right? So that's what we're really looking for. We have decided to focus on what we are very good at. And what we are very good is using great stories that serve a [ need for our leaders and serve ] the nation. Great generals [ speak brands ] that are important for the democracy of the country. So we have a very clear mission for that. And Perion, what they are very good at is finding ways in which they can help publishers like us. And our -- my personal view is, we issued specialize on what we are good at, Perion specialize on what they are good at. And these 2 partnered together to create a bigger pipe that everyone can benefit from. We produce an array of content across multiple verticals. So how do we optimize and figure out which content does well on which distribution channel, right, on paid strategy. So these are the things we hope Wildfire and Perion have the right article tools to track, measure ROI and feed back to us. But Perion can provide massive amplification to the content that we produced and give constant feedback on what are the content that's gaining traction within certain channels and not so we can optimize the content strategy, accordingly. And second, where possible, they can take things off our hand, drive great value and add to the bottom line. So Perion will offer and their investment into that technology should definitely give us the ability to understand what piece of content is doing well on what channel and optimize, accordingly. So there are various ways in which you can buy traffic today and [ we update ] strategy. And often, what I've found is big publishers like us tend to shy away from them because we tend to have good organic distribution anyway. And what we're missing is that know-how and the knowledge on how do you go and attract this audience across these vast distribution channels. And we have avoided to -- so far from partnering with anyone because we couldn't find anyone that we could trust that was credible. And Perion, given the size and the investment into it, it gives me personally that degree of comfort to interest them that this responsibility. Even if someone is guaranteeing tons of money, if I don't have -- develop trust with them, I've been definitely not partner because the brand is so iconic. It's so well-known. All it takes is one small mistake will cause us a lot of trouble, right? [ But I think on just that ], Perion with the leadership team that it has and where it is as a business today, I have no hesitancy in trusting them.

Thank you, Dev, and hi, everyone. My name is Asaf Katzir, and I'm Co-CEO of Content IQ, together with Ziv. Now that we've heard from Dev, I'd like to share with you what we've built here at Content IQ, which is the modern infrastructure for operating a digital publishing business in a profitable way. What we've taken is the 4 pillars of digital publishing, which is distribution or user acquisition, the websites and infrastructure revenues, which is the monetization aspect and, of course, the content itself and we've applied data and analytics tools to each of these aspects. Taking Newsweek as an example, our mission is to increase the value from each user visit to the website, which were referred to as a session defined as the length of time the user spends on the Newsweek website and the revenues that Newsweek is able to generate from this session. So to go into each of these aspects in distribution, our campaign management platform and real-time revenue attribution applies e-commerce marketing strategies and concepts to marketing published content. For websites, we've built our own CMS content management system with unprecedented configuration capabilities, which runs on highly scalable infrastructure to support growth. For content, A/B testing capabilities and real-time analytics increased the engagement. And as a result, improve revenues again. And for revenues, for the monetization, sophisticated ad delivery and programmatic dynamic access placement drive significantly higher revenues from each user visit. Overall, the results of these 4 systems working together enable publishers to succeed in this challenging digital world by maximizing the revenue for user session. Thank you, everyone, and back to you, Doron.

Ziv, Dev and Asaf, before we are moving into our next use case, please don't forget to submit your question on the Q&A section. We're going to have all management here at the end of the presentation, answering your questions. So please take advantage and submit it for us. Our next use case has to do with search -- ad search. Why ad search is so important? So in our efforts very much to capture the consumer journey along the funnel, from awareness, consideration and then to intend, we're reaching where is the best place to capture their intention where they demonstrate the highest possible intent, if not, when they use keywords on the search bar and looking for the results. This is the area where advertisers see it as the best place to engage with a user with a high possible intent. And I very much would like to introduce my friend, Tal, as well as Mike that is going to talk about this use case, which is very important in us tracking the consumer along the final journey.

Hi, everyone. My name is Tal Jacobson, and I'm the General Manager of CodeFuel, Perion's Search Technology division. I have over 20 years of an executive experience in the high-tech industry in Israel and had the privilege to being part of some of the success stories at companies such as SimilarWeb and McCann Erickson. It is the most crucial fact about our business. Search ad spend keeps growing year after year. And last year was even booming. Now why did that happen? For advertisers, search ad platform is the most targeted place to find your users, your customers exactly when they want to buy. They wake up in the morning, they write exactly what they want to buy. And you can target that. So that's the perfect platform from advertisers. And why is it growing now? Because throughout the years, people kept moving and moving to buy online. In the past year, COVID creates a quantum leap in that. So ad budgets really went up. And that's a crucial thing for CodeFuel. The more ad budgets in search that goes up, the better it is for CodeFuel. In the last 2 years, we invested heavily in technology, in AI machine learning. And through that, we were able to increase our business coming to over 9 billion searches a year, helping advertisers find customers at the exact moment at the exact place. We signed a strategic agreement with Microsoft, which we'll talk about in a minute, and we're working with different search providers to help us gain more and more markets worldwide. And we also work on different new technologies and products, hand-in-hand with Microsoft, and I'm happy to say that we're seeing some very positive signals from those products. Now let me show you an example of how we use our technology. One of our best technologies is search mediation, powered by AI and machine learning. Now when we think about search, we normally think about the person that type in search query. But that's not normally -- but that's not usually the case. A lot of the times, you don't even know what you're searching for. This is called an exploration phase. If you want to buy a phone, you might read an iPhone review or a Samsung review. At this point, our machine learning with the algorithm that we'll build, which show you the exact keywords that we think would interest you the most. And then through that, in our search mediation, we'll find the best search provider that will show you exactly the ads that you're looking for. This solution provides the best user experience, the best monetization solution for the publisher, and obviously, the best solution for the advertisers. We've announced on November 2, the renewal of our Microsoft strategic agreement for another 4 years, increasing our markets to 34 countries and including new products, and we estimate that the value of this agreement will generate about $800 million. Now let's hear it from 1 of our partners how he's using our search mediation platform to grow his business.

My name is [ Mike Weiner ]. From 2009 to 2020, I worked for the company that was known as Yahoo!, then Oath, then Verizon Media. As part of my role, I was the product manager of Yahoo! Search. And in 2014, I created and ran a program called [ Ginsu ] which was the company's display and native to search solution, which reached a huge volume over the next 7 years. And it was my baby. Last year, I left Yahoo! to found my own company, [ Parking at Media ]. And I've been in the industry for tech for 25 years and in search for 12 years. So it's good to still look like this after 25 years in tech. Search monetization and search to the Internet is absolutely the most effective way to advertise, bar none. It brings in the power of actual consumer intent. And the unique ability that search engines have to distill it is beyond compare. While it's true, search engines are ubiquitous. We have a number of search engines around the world, and they're already reaching most of the users, there are some really key points around this. So the Internet, number one, the Internet keeps growing, right, in terms of new users and new use cases around how people are searching. So search is right in the middle of all this explosive growth of new people. There's still innovation. So we have -- 5 years ago, if someone had said to me, well, cookies are going to disappear. I would have -- my hair would have gone on fire. I don't have any hair because of COVID. But if I did, it would have gone on fire. But now we can bring context to search. So we can meet publisher demand and advertiser demand, just understanding context, using the search mediation solutions in CodeFuel is perfect for Barking Ad Media. It's exactly our sweet spot. We needed someone who understood, not just where the Internet is today. But specifically, the crux between an advertiser, a publisher and a consumer. And it's just so -- I can't mention enough. It's so critical that having the right partner who understands this, it's such a dynamic industry. And because things are constantly shifting, you need to find someone who understands that it's -- it's a moving target. I had a boss that used to say, "You don't want to skate to where the puck is right now in hockey. You want to skate to where the puck is going." And that's exactly how CodeFuel works. So it's a trustworthy partner. Everyone knows Perion. They're publicly traded, you can trust them. CodeFuel is a perfect arm. And that's why I look to them. From someone who understood what I want to do as a media solution. Using the technology that CodeFuel have, they help me in every aspect of what I'm doing. So imagine, if you will, I'm a media buying company. So I look around and I say, oh, I'm going to buy media from here and from here and from here, and there are a number of publishers I can work with, a number of advertising and CodeFuel instantly knows how I should be buying my business. So do I show a product listing ad versus a text ad? Well, of course, somewhere behind the scenes in CodeFuel, they know exactly how I should be doing this, whether it's machine learning that have worked with all their other clients to understand this business. Or the AI that they've built over the years, they just know, maybe it's not a text ad in this case. Maybe it's a keyword block, I should show in this case because they have all this experience doing this. Instantly, they can help me find the correct monetization option for what I need, not for -- it's not cookie cutter. It's an approach that's directed right to me. So they guide me to the right solution. They help me test it. I've got an account rep that helps. I've got -- everyone is engaged in finding the right solution for me. And it feels very personal to me, which is so exciting because working with a lot of these other solutions, it's kind of faceless and you're a number to them, working with CodeFuel is very different. So my assumption is because they've built things the right way and they treat their customers the right way, it's just a key to success, and it's why I love working with them. And just because of my initial -- my last few months of working with them, I can tell you how successful it is. The AI is working, the machine learning, whatever is working behind the scenes is working perfectly. It's either that or Tal has 100,000 people working there that is hiding. And I don't think that -- I think it's the technology behind everything that's working perfect. So I'm really, really happy to be using CodeFuel.

Thanks, Tal, and Mike, that was a great presentation. Before I move on, we are doing great on time, and we're getting great questions. So I encourage you to really use the opportunity and meet management and submit your question on our Q&A section. The next use case is Paragone. And earlier today, we just announced that Paragone, that was after almost 18 months that we are working together with Havas, Havas Media. This global agency, which running on over 140 countries and offices around the world where our design partners, taking what previously known as MakeMeReach into a completely new SaaS platform. And now we felt that we reached the right time and very much open it for general availability for other customers. So with that, I very much would like to call Shai. He's the General Manager of Paragone; as well as Jorge Iriza, which is our good friend, the Global COO of Havas which were very much the mind and the user behind Paragone. Shai, please?

Hello. My name is Shai Alfandary. I'm the General Manager of Paragone.ai, formerly known as MakeMeReach. We are a campaign monitoring platform for social advertising. A bit about myself. I've been in the enterprise software business for over 20 years, and I'm very proud to take this business and drive it for Perion. Why does CMOs increase so much spend? Why do they care about social so much because consumer habits have changed dramatically. In the past year as people moved indoors and online, a lot because of COVID. As a result, online sales have grown rapidly. In fact, entire sectors have been adjusting their online strategies to the new conditions. It is not a surprise then that according to Gartner, 78% of B2C CMOs are shifting budgets to social this year as those channels simply lend themselves very well to targeting audiences online. Let's take a look at an account we just closed last week that is PlusDental. PlusDental sells those invisible braces online, like Invisalign in the U.S. They are active across 8 countries, managed $15 million in social ad spend a year and run dozens of campaigns concurrently. We spoke with Sophie, the Head of Performance Marketing at PlusDental. The problem she face is a problem of scale, essentially what she told us that it is impossible for her to optimize their social spend when she has to run 100 campaigns manually. It requires around 70,000 manual decisions a year. That's a lot, right? 70,000 decisions a year, 100 campaigns a day, 2 decisions you make on each campaigns a day, 365 days a year, 70,000 decisions. This is impossible for a human to handle so many decisions accurately for anything. All the more so on someone else's money. Imagine as an analogy, for example, that you went to your private wealth manager at Merrill Lynch and they told you that they are making those decisions about your own money manually without the aid of a decision support system and without the aid of an underlying machine learning and an AI capability. You would probably tell them that we'll probably go to work and engage with Morgan Stanley. Because without such tool, the probability to make mistakes increases. As a result, performance drugs. People tend to overcompensate for underperformance with additional ad spend and the waste just surges. So many of these companies, performance marketers end up throwing good money after bad money. Their managers are not happy. They are unhappy with their team. The team gets exhausted. That's why you need us. That's why you need an app. Paragone.ai introduced recently APM, actionable performance monitoring, for social channels that acts in real time, with the promise and the offering to give 3 things. The first one is to be able to keep track and monitor cross-channel campaigns in real time, and that is thanks to our data collection engines, engine that helps us ingest and harmonize cross-channel campaign data in real-time and scale. We focus on social, and that's kind of like the expertise of that type of monitor. The second thing is the ability to predict -- the ability to meet campaign targets so per campaign, we know how to tell you if you're going to hit your goals or miss, and we are giving you recommendations, specific recommendations of what you need to do in order to hit those goals. Right? And that is thanks to a very powerful machine learning and AI capability that we have baked into the platform. And the third thing is the ability to act in real time. Thanks to our automation engine that helps us automate workflow with a rule engine and naming conversion and ability to automatically promote ads to the different channels. We are capable of doing that. And yes, all of this magic was done for PlusDental in a SaaS fashion. We deliver our Software as a Service. So within a few hours, she was on-boarded up and running. We closed the deal just a week ago, by now, her team is completely onboarded and can start working with it. But not only PlusDental is using Paragone. We have a few well-known brands who have adopted our technology, including Sony Music, Disney, Universal, Brightlink and Havas. We've been granted a couple of awards this year by [ G to Grab ] for the ease of use and as a high performer. I'm excited to introduce Jorge Iriza, the Global COO of Havas Media, Havas Media, one of the biggest most renowned agencies in the world, have worked with us on the future of social advertising and were a great design partner for us. Recently, they have decided to standardize their entire hundreds of millions of dollars ad spend they manage for their clients on our platform. That's big news. It resulted in a $1.3 million ARR deal for us, strategic deal that we closed for a couple of years, and we see the future with them as they plan to extend beyond those 2 years even further. Delighted to be here with Jorge and have the opportunity to talk about Havas and Havas' view of social and how Paragone is helping Havas Media reach its goal. So just quickly, Jorge, why don't you give us a bit of background on yourself and talk about the social practice within Havas Media.

Yes. My name is Jorge Iriza. I'm the Global CEO of Havas Media Group, who is part of Havas, part of Vivendi. We are one of the holding companies, the media division, we are around 8,000 people active in 70-plus markets.

Maybe we can kind of bridge from that into the role of Paragone as perhaps that single source of truth. And I know you did an RFP and you ended up consolidating a fair amount of our business on that platform because of its ability to automate, connect the dots, a centralized platform, that free some of your people from the more mundane tasks. So maybe you could just walk us through what that process like what value Paragone is bringing to your operation globally.

By bringing values in different levels. First thing, your technology is allowing us to connect different platforms, different ecosystems in 1 single space, which is very important because we can better plan. We can better trades. We can try to optimize reach and frequency. And also we are saving time because we don't need to unlog (sic) [ log off ] from 1 partner platform to another. We have a single space, a single control where we can activate all the pay social, plus it help us also to have a better reporting because we have all the data consolidated in the same place. And this is helping us to optimize time to optimize planning and trading and, therefore, effectiveness and to also focus on insights instead of reporting when a campaign is finished.

So what you just described, cross-platform, cross channel, integration, that's going to get even more -- become more of a reality in the future. So talk, if you will, about how the flexibility and the automation of Paragone is able to work with rapidly evolving nature of social media.

Today we're using Paragone for mainly for social media. We will have over $100 million liquidation a year. The [ REA ], we're working on with different things to try to, again, as I mentioned before, be, integrate more technology at the planning stage for social and also try to integrate other channels. The channels can be e-commerce tomorrow. Channels can be online video, not social media platform, but online video, can be OTT, can be everything, every video content you can distribute in the automotive way. That's the goal. An ambitious goal. And I think something Paragone can help us in the future is on measurement. Because again, I think the big challenge we have as an industry today is to have a single approach on measurement, and we are able to deliver incrementality, the term incremental reach, incremental awareness, incremental sales, depending on the nature of the campaigns, depending on the KPIs. But we are finding with Paragone is we will have a problem, they help us. When we have a challenge, they help us to fix it. When we have -- when we want to create something new, they're ready to partner with us. This care about client. This care about supporting the client in the long term. And this is very important.

I heard that your plan is to move more of your media spend and deepen the relationship with Paragone in the future, given everything you just described. So maybe you could sort of just end with your expectation for the future?

I mean, today, we have a multiyear contract with Paragone, which is -- which gave us a long-term vision, first thing. Second thing is we want to increase this partnership in 2 ways. One is with more volume with more media activation through them and also to try to explore other opportunities in terms of tech, as I mentioned before, in the upper funnel and the planning stage before the trading and also in the way to connect different touch points beyond social media.

Thank you, Shai, and thank you, Jorge. Great presentation. Before we move to our last chapter in our presentation, which is the next 3 years, important to mention. Well you heard different use cases, there is one thing in common, actually 2. The first thing in common, I mentioned that we are putting our customer at the center. And that has to do the Chief Digital Officer of every given brand. And for a Chief Digital Officer, it always has to do getting the most, as they call ROAS, return on ad spend. And return on ad spend is not limited to 1 pillar. It's very much looking about the 3 main pillars of advertising that by now, I'm sure you know by heart, but that's a social advertising, display advertising and search advertising. And that's why because their consumer is very much moving from 1 pillar to another. So when it comes to frequency, how many times you need this user? And when it comes to reach, that's why we're able to look at it from a holistic standpoint. And I will very much going to focus in how all fits together from a product solution standpoint. So for our -- the next 3 years. But before talking about the next 3 years, March 8 is a very important day for all of us at Perion. We are very much mentioned this day, the women's -- International Women's Day. And for that, I invited a great friend and Board of -- she's part of the Board of Director of Perion, Joy Marcus. Hi Joy. Are you on? Great. Good to see you. I cannot hear you, but -- okay. Joy. You there?

I'm here. Hello.

Wow, so far away, and it seems like you're here at Perion.

Yes. I feel that I'm there.

Thank you so much. Pleasure.

Same here. And first of all, I just want to say thank you very much to Doron and my colleagues on the Board of Perion and the management team for kind of inviting me to speak about this very kind of important issue. On a big day in the world, International Women's Day has been around, I just learned this, since 1911. The world came together and decided that we collectively, as humanity, need to do something to advance the state of women in the world. I do want to take first thing that, as a Board member of Perion, I am 1 of 2 women on the Board out of 6 outside directors. So Perion is very much working on having women participate at very high levels in the organization. And it kind of really is a leader in the advancement of women, I would say. Diversity, generally, is not a nice to have. I think what we've learned over the last year through various studies, through McKinsey, in particular, issued a study very recently. Diversity is a must-have for companies. It yields better results. We see that results of companies with diverse management team yield between 21% and 35% better results than companies that do not have diverse management teams. So about, I don't know, a year ago or so, really just 6 months after I joined the Board of Perion. The Board asked me to take a look at how we were doing? I had some experience. I think you can see from the slide. I have a lot of digital media experience. I most recently ran the digital video area at Condé Nast. I've been in companies which did great on diversity. And those that did not do so great. And I felt that Perion could be actually great. And that's what we're striving for. So in this context, we looked at what was going on at Perion. So what we learned was we were almost half, half women at the company, which is relatively consistent with the overall workforce at least in the United States right now. Women have joined since the 50s really, women have joined the workforce in greater and greater numbers. We're entering universities at a 50% level. So this did not really surprise. I think we're doing just fine on this. What we looked at more closely was how can we help pull women through to the upper echelons of the company? As we know, women face very unique challenges in the workplace, assumptions about their role in parenting, in particular, tend to hold women back. What could we do as a company to help them. And so we have begun various initiatives. You can go to the next slide. What we are working on at Perion right now is flexible work, and that benefits everyone. It benefits not just women. It benefits all parents and make us a more effective organization. We are leading in maternity and parental lead, again, disproportionately parenting tests fall on women we find. And so anything that we can do to enable a flexible work environment and a work environment that allows our employees to become parents and to be effective parents will help the company overall. We care very much that the mental and physical health of our employees. We have a number of programs dealing with nutrition and work-life balance and really anything that affects kind of the mental and physical state of our employees operating at maximum effectiveness for us, we're there for it. We're also taking a leadership role in our communities, joining efforts such as She Codes, which is aimed at increasing the number of women in tech roles. Perion is leading in its communities, both in Israel and in the United States, to engage with these efforts and to support these efforts that will lead to a greater representation of women and technical jobs, which is, as you know, a great equalizer. And finally, we have our own program, Women Lead, it's new. We just initiated it, and it is specifically targeted at creating, for example, mentorship capabilities within the company that, again, help pull women up. We have women. We have great women working at the company. Our job to create a better Perion, a more effective Perion is to help those women gain leadership positions and bring greater value than they do today. And I could not have -- we could not have a more supportive Board management team and workforce to do that. And I'm really quite sure we will succeed in our efforts. So again, thank you. Thank you for shedding some light on this. On an important day, an important historical day. And Doron, I will take it back to you.

Joy, thank you so much. I want to thank you on behalf of all of us. I know the hard work you are doing in order really to get to a stage where we will feel equal in our organization and probably beyond. So thanks again for everything. I will move on into the next 3 years. And I very much would like to look at it from total addressable market standpoint. And since we are dealing with 2024, the ad spend, the digital ad spend is going to climb to more than $0.5 trillion. But again, I think we need to look at the gap, the gap of $200 billion, and this is where it's coming from. And as I mentioned -- as I mentioned before, the best way to look at it is from a consumer behavior standpoint. Because if we understand what -- how consumer definitely responsible for this gap, we'll understand what the advertisers plan doing. So from a trend, consumer behavior trend. So we definitely see the increase. And I don't think it has to do just with COVID that consumers spend more time in front of screen. More time in front of what screen, more time more in social because we are in lockdown and because of some other things, which is increased, as Shai was mentioning, and I think as Jorge was mentioning in front of us, the huge increase on social advertising spend. So advertisers definitely see the social platform is a great to look for those consumer that spend more time. The next one has to do with the growth of OTT, over-the-top or all the Internet, all content that is being delivered in the Internet. CTV is a subset of it. And we definitely believe that this is -- it's not even a question of if, it's a question of when, where all traditional cable cord TV will move into the OTT and we see it as a result of the CTV as Dan was very much mentioned and Bob because everything is now shifting, and that's a great opportunity for advertisers. We, in a way, and I will address it more on our Q&A, is very much taking approach because in the CTV trend, you're able to see a huge commoditization flow, where it's -- we call it a standard CTV, opposed to the iCTV . And there is a question of [ Flora ] that I will address later on why now iCTV is gaining momentum because this was being used in the past, as you mentioned. The third element, and this is not surprising anyone is the shopping online. And I think that -- but COVID year took us to the next level. And the point is very much -- this will go back when the market -- when we will feel safe. I don't think we'll go back. I think that we're just being exposed to all the possibility of shopping online. But there is another thing that we need to remember as the consumer. And this is -- we have a lot of data into it that consumers search before they buy. So there is a high correlation between shopping online and doing searches. It's free. It is credible and why not search before. And when you search before, we're able to see that this is the area where I mentioned, has the highest level of intent. I can mention to you that in the first quarter of 2021, and we'll report it on our earnings call at the end of April, where we're able to see more than 20 million searches a day. Highest record than ever that we've seen before. And this is very much a result of more online shopping and a great place to increase the search advertising spend. So the $200 billion is definitely going to come from those consumer trends that, as a result, advertisers need to align with those consumers and able to capture them at this area where they are spending more of their time. Now the most important slide in my presentation because how it all fits together. It's quite an engineering slide, but I hope you'll get the idea. What we are very much accomplished in the last 3 years is we are working on both sides of the house. One side has to do with the demand asset, as you can see on the left side; and 1 has to do with the supply asset that you're able to see on the right side. Now the interesting part is what we are developing in the middle. And what we're developing in the middle, I describe as intelligent hub and following the hub-and-spoke model, poised to point-to-point solution. The hub gives us a great possibility to very much taking demand from one side. And we mentioned here that this is -- can be a very high -- excuse my writing, a very high CPM. And instead of very much publish it only on the Pub network, the intelligent hub that we have here allows us to put it and look at it on their own and operated sites that we have, something that Dev and Asaf mentioned in their presentation, but we can also place it in Newsweek, where Dev was mentioning that he's looking about more credible, reliable-type of ad units. This is what we bring into the market. It's a way for us to develop what we called our own world garden to be more dependent on first-party cookie than third-party cookies, and we will address the cookies -- the cookie issue later on. But more than that, the demand that we are getting from Bing has to do with product ads, has to do with display to search, has to do with a lot of demand that is out there from Bing and Bing partners, it very much allows us to find a great supply for this demand asset. And this is something that we have, and we've decided very much to look at it in a most holistic way and invest a lot. And Maoz was mentioning the engineering budget that we are putting here on the intelligent hub. I can mention to you that since it's a first-party data, we're able also to develop a pub -- Perion publisher audience graph, where we're able to see and able to gauge data across our assets, which is a very important advantage for us. So this is how we're going. And this is what the next 3 years is going to be. And just to end, we are going to end -- to add more supply assets here and more demand assets here. But all in our world garden, all that will be connected into our intelligent hub. Since I mentioned the fact that we will grow, definitely, some of it is going to be organic, but some of it is going to be inorganic. So what we are looking for, I will show you in a second. So this is very much our acquisition strategy. We're looking at about 3 areas. One has to do with DCO. We want to continue and strengthen our intelligent high-impact ad units. We want to add another layer to this intelligent high-impact units with personalization layers. And we're looking to acquire a company that can provide this type of layer of personalization, all in all, to increase the engagement. All in all, to provide a way better KPI if it has to do with attention, if it has to do with engagement with our user. The next one is very much, to what extent, blockchain, which is a technology that it's already there, but not being so much in use in media. And one of the things that we are doing in our Search Monetization Lab is looking about blockchain platform and in what way we're able to enhance the search privacy, which we believe is going to be the next topic of the industry. Last but not least has to do with Dynamic Ad Insertion, known as DAI, for OTT. We are looking to enrich our iCTV offering, not just with the level of DCO, but also with ability to insert those what we called in high-impact ad units to OTT through our own DAI, Dynamic Ad Insertion, technology. So those are the 3 areas that we're looking at because of that, as Maoz mentioned, we did the follow-on and increase our cash position that we're able to look and definitely enrich our offering. From acquisition criteria, I want to share with you that this is definitely one of the things that we've decided to develop as a framework. The framework of that acquisition must be accretive. We are -- believe that the only way for us to retain those talented founders in its team for a long time is developing what we call 25:75, which is only 25% is the cash on hand, and the rest will be an earn out, either for 2 years and 3 years. It worked extremely well in the last 3 acquisitions that we've made, and we believe that, that's the right way to developing synergy and integration with our other assets. The assets required to be a stand-alone operation because of the heavy on earn out, but we believe that from an M&A perspective, that's a way to be very successful. Last but not least, those founders, entrepreneur, like the other team of Perion have to must demonstrate a strong entrepreneurial talent. With that, I would like to end with my last slide, which is very much taking everything that we heard into where is our North Star? Where is our North Star from where we want to be at the end of 2023? And we are, as management and the entire team, is very much working through a multiyear. In this case, it's a 3-year revolving operational plan. In other words, we have a very detailed operational plan, how we are going to get into the $500 million mark by the end of '23, and we very much would like to even surpass it, which is -- represent a 15% CAGR from where we are today. So far, very good. We just showed that -- in the first quarter of 2021, we showed a 30% year-over-year growth, which is way more of the 15% CAGR. And we had to adjust our guidance to the Street to be $370 million to $380 million. At the same time, we are very much like to improve our operational efficiency and moving from a 10%, as you can see here, to EBITDA to a 12% EBITDA to revenue as we'd like to have in 2023, has to do with the synergy. So with that, I will very much would like to thank you for participating, and we're going to have now a session of Q&A. I will ask the entire management to join me. A few of them will join through Zoom because they are in the East Coast, and the others are here in our headquarter. So let's get started.

Hi, guys, trying to get organized. So together with me on the call, to my left is Shay from Paragon; as you mentioned, Maoz, as you already know; and Tal; on Zoom is Dan, right; then Aks is there, yes, very good; as well as Asaf indeed, right, okay? We'll see them later. Okay. So questions. The first question is going to be, David Seitzman sends the question. He was asking what kind of companies you look to buy? I think we covered that one in terms of our targeted. And there is a question that came from Jamie. With Undertone and iCTV, can you discuss how much of Undertone business goes beyond commoditized activity? Can you mention any related KPI? Dan, if you are there, can you talk about our intelligent high impact and the focus on creative, which is completely shifting from the standardization commoditization that has become so popular in the market.

Yes. So Doron, the trend towards using iCTV techniques, as I said, structured -- earlier in my presentation, structuring assets in a creative way to make them more effective, applying skins, QR codes, other things inside of CTV is absolutely a growing part of the business. I'm not going to be specific about how much of the business it is today. But there's no question that the business is heading more in that direction. As advertisers seek to stand out and make their brands clearly differentiated in video assets, which in the past have tend to be very standardized, now giving them the opportunity to do customized things in video can only grow from here.

Thank you, Dan. And now I have Jason?

Yes, can you hear me?

Hi, Jason.

So I'll ask you too. Nice job today. Thanks for doing this. So maybe let's just talk about the Google Chrome because that's very top of mind for people right now. So you're saying it's a 3% kind of headwind that you can see in the numbers. Are there any other either negative or positive derivative impacts you're seeing from this announcement? And then maybe help us understand, has Microsoft, what do you know from them? What have they said to you about this? Are they thinking about any browser or search policy changes? And then a second question, this is for Dan. So maybe let's do the first one, then I'll ask Dan a question.

Yes. So first, about the negative and the positive. So first, I want to mention that this didn't hit us by surprise. I mean we all know that this is going to happen, and this is something that we were well prepared. The project that we were focusing was very much on contextual match. That was our idea in what way we need to be less, very much depend on the use of third-party cookies and have a contextual match. That's applied to what Undertone is doing with their high-impact intelligence as well as what Search is doing with their native display to search, search-to-search. Everything is there, is very much using the same contextual very much engine. The other thing, which I think is playing our favorite, it has to do with what parts of creative is very much, what type of ad unit is more depend on third-party cookies and what is not. So the thing that is very much compensate, let's say, low level of creativity is depend more on third-party cookies. And I think the fact that we are focusing on a high-impact creative definitely play to our favorite. And I think that the other thing, which is one of the major assets that we acquired is very much to what extent we can rely on our own and on or asset rate. In other words, for instance, business will give us huge supply in this way that we are very much controlled. And this type of relationship is something that is needed. I think it's quite unique for an ad tech company to have both sides of the equation, the demand side that is coming from brand and agency as well as with our search partner being and the supply side. And in a way, we understand that we need very much depending on ourself and developing our own world garden. Having said, integration with what Trade Desk is developing and what very much Google is developing is definitely integration that we see that this is definitely something that we need to do because they control quite substantial portion of the traffic and the ad attribution in the market.

And then just a quick one on CTV, it's probably for Dan. But is all of the CTV impact in Undertone or is it crossing into other product areas? And then how does Undertone get paid on the iCTV ads? Is it creative production plus or media spend or both?

So Dan, you want to take it?

Yes. You raised your hand. I thought you wanted to answer that.

No, no. I mean, you're doing better job.

So CTV and iCTV are vastly Undertone's area at the time. In terms of how we're paid, so we have -- we're paid on a CPM basis. Obviously, iCTV, the CPM is going to be substantially higher than CTV in recognition of the additional work that goes in to creating a very effective creative as well as it recognizes the supply of iCTV versus CTV in general. Does that answer your question?

No. I think Jason was talking about another thing, which has to do with the pricing. And there is quite a correlation between the engagement and the KPI that we're able to demonstrate to our advertiser. In this case, the brand. And the CPM that they're looking to pay, I think it was one of the question here is what we're getting paid. So on the iCTV, we're very much getting paid a very, very high CPM, but only if the consumer engaged with those videos on the screen. If they're not being engaged, it's -- we're getting CPM like any other video that is being there. But once they're getting engaged, it's another level, quite substantial lever on a higher CPM. From obvious reason, not all of them that watching this Mercedes video is clicking on the remote control, but those that are -- does are definitely compensate us and compensate well. The next question is from Laura. Laura, are you there? Yes, but is she on Zoom? Okay.

I am.

Hi, Laura.

But I have so many. Sorry, here I am, I apologize. Can you see me now?

Yes. We cannot see you, but we can hear you.

Okay. Great. Well, I'll just do that then. So I had a bunch. I had a bunch. So I don't know which ones I am going to ask first. But I was really interested in the fact that I think a lot of your interactive ad units are based on VIZIO TVs, which are about 15% of the U.S. market. And I'm wondering what your action plan is to roll out to the other 85% of U.S. markets. So could you talk about maybe that first?

Yes. Definitely, I think that the -- oh, now we can see you. So very much has to do with the proliferation of iCTV has to do with establishing alliances and relationship with other content providers that can enable this feature. Currently, we are very much limiting to the one that we are working on. But I'm sure that we are doing it, extremely efforts to expand it because without them, we were not able to present this feature to our advertiser.

And on that product specifically, do you only get paid if the consumer clicks on their remote, on the ad?

No, we're getting paid twice. The first time we're getting paid is just by fact that we are showing the video unit. That's one, which has to do with the normal payout on CTV. This is first payment. We're getting a kicker when they're using the iCTV.

Okay. And then my last question, I'll just limit mine to 3. My last question is, Google has said they will not support individual IDs. They're going to do the privacy sandbox, which is suboptimal because advertisers really want to close the loop between their ad spending and actual purchases in the real world. So my question to you as an expert in the space of the Open Internet is 5 years from now. Will the Open Internet, without Google, be able to stick with things like Universal ID or LiveRamp, where you're actually tracking consumers so that you can close that loop to purchase in the Open Internet? Or is everybody going to become a victim of the privacy sandbox and have to adopt that because Google is 40% of the Open Internet today. What's your opinion on that?

Yes. So my opinion here is that I think -- so first of all, the second part of the Google announcement, that was the real surprise. If the first one was something that we're expecting to happen, the next one was a real surprise because saying out loud that they will not support something, which we basically see as something which is providing a level which makes sense for us, a level of privacy has to do with consumer consent and has to do with the fact that this was really well positioned. I think that was quite a surprise. But to your question, I think that if I'm taking my -- if we're taking ourselves 5 years from now, I think that this is definitely going to be quite an alternative to what Google will offer. I think that consumer and publisher definitely need to support where their consumer is very much looking at. And I don't think Google, as big as they are, can stop this trend from happening. So I do believe that this is -- Open Internet is definitely something which we will see and it's going to be -- I don't know if the majority, but not something as maybe Google is planning to completely shut it off before it even started. Hi, John? John from...

Doron, How are you?

I'm doing well. I was a bit nervous with all the technology that we have in the last hour that you can imagine. Yes, please.

I actually, I just have a quick question. I'm not sure if you have the answer to this, but I was just thinking in relationship with Bing, many U.S. companies -- actually, many in the U.S. have been switching from large-tech companies, such as Facebook, Twitter and Google that have censored conservative views, they've been going to smaller tech companies. I'm just curious if you're aware of any increase in Bing's market share since this censorship has begun?

Yes. So first of all, I can tell you that Bing market share is being increased, especially outside of the U.S. There is a reason behind the fact that they expand in our agreement -- the new agreement from 6 countries from the previous agreement to 34 countries now. We can mention Australia as one of the countries where Bing is looking exactly to expand its market share because of what's happening to Google there, and I'm sure you guys heard it on the news. Western Europe is definitely an area for them for expansion. There, I can say, following very much the headwind that Google is getting in some of those countries, and it's not so much in the U.S., as you can imagine. But they are developing new products. They're definitely looking at mobile is something which they need to put way more attention. Voice search is very high on their agenda as well. They're working closely with their partners, and we are one of them to team up in developing joint product that their aim is to take more and more market share. Tal, you want to add something here?

No. I think you're definitely right. We see more and more that Bing is gaining market share. One of the example is Australia now with news, and we're seeing that Facebook and Google are pulling out, Bing are getting in, which helps us. Now the more that Bing is getting stronger, the more advertisers we have, the more budget, RPMs are going up. So for us, it's good news. Very good news.

I appreciate that. Thanks for taking my question. I had a sense that Bing was probably gaining market share. I just wanted to make sure that my assumption was correct. Thank you, Doron.

Definitely. I just want to mention one thing. Bing is now part of Microsoft advertising. That's an organizational change that happened last year. And I must say that we are now part of a way larger business unit that's providing us a great possibility for as well as demand and supply because of our tight relationship with Bing. The next question came from Jeff from ROTH. The question was how much of contribution do you expect from CTV, iCTV in the next 5 years? So I think that this market is definitely growing, and there is -- where the market is growing in a way higher, greater pace than any other sector. And we are enjoying very much this growth. I must tell you that we are getting into a point that a large portion of all insertion order that we are getting from our agency and brand has CTV, iCTV element into it. This is one of our major KPIs. So brands definitely see it as something that they cannot ignore. And we believe that it's going -- currently, it's 10% of our advertising business, and it's going to get to way, way higher numbers in the next 5 years. John from -- who is in Zoom, John? John from Stifel.

Thanks for taking the question, and great to see some of your business unit leaders presenting today. I was just wondering if you could give us a sense of -- especially as your advertising segment has evolved quite a bit over the last year with the addition of Content IQ and some other assets. If you can give us a sense of the relative revenue growth contributions of some of the various business units to the advertising segment? And then any color on organic growth trends in recent quarters by BU or expected contributions to the projected growth in 2021? Any color there would be really helpful.

Yes, absolutely. So I must say that one of the most important thing, and that has to do with the day after we're making the acquisition. While we keep those acquired companies, I mentioned, as a stand-alone, key emphasis has to do with synergy, especially with developing the intelligent hub. So it is for -- it is very hard to distinguish the contribution of the Content IQ versus the other assets that we have because for a specific demand that we have, the intelligent hub is very much is asking the question, where is the right place in order to optimize and maximize our margin from this demand unit? That's very much what we bring here. And in this case, it's all has to do with us optimize our margin. So it's really difficult. I think that the strategic move that we did by acquiring the Content IQ and later on, the Pub Ocean, is that it's enrich our possibility from a supply standpoint. That give us a great mediation capability between matching between demand into supply. The 3 years that I mentioned of the 15% CAGR, at this point, we are looking it from achieving it organically. And we think that this is something that we're capable of doing. But definitely, we are looking in the next 3 years to do an acquisition from a point of $120 million, $130 million in cash. And as Maoz mentioned, as of the end of the quarter, no debt whatsoever. And being generating between $35 million to $40 million net cash from operation, I think that we definitely have a great position to enrich our portfolio with possible acquisition, as I mentioned, on our use case. Yes. Guys, do we have any more questions? No, we don't have more questions. So I think we did great on time. I was a bit nervous before, but I must tell you, I enjoy very much our conversation. I want to thank first and foremost, the customer, our customer that were part of this Investor Day, one. The second has to do with the company, the company management that we are working hand to hand, getting the most value to our investor. And at the end of the day, to have fun. With that, I would like to thank you, take care and hope to see you face-to-face next year. Thank you very much.