Despite CTV’s growth, The Trade Desk doesn’t disclose its CTV revenue — or break out revenue by channel or device overall. The closest the company came to disclosing its contribution was revealing that video advertising (which includes desktop, mobile and TVs) is in the 40% range of overall revenue and the segment is “growing rapidly as a percentage of our general”. according to CFO Blake Grayson.
Green leaned heavily on Disney as an example of a prominent film and TV entertainment company that seized the programmatic opportunity. Disney became the largest media player to integrate with the Unified ID 2.0 identity program, and The Trade Desk is a pilot partner for Disney’s data cleanroom product development.
But CTV’s biggest Trade Desk win didn’t directly involve The Trade Desk.
“I for one was very excited when I heard that Netflix chose Microsoft,” Green said.
Ad tech circles are small, and Green said he was personally pleased, as he had introduced the then-president of Microsoft Advertising to Brian O’Kelley, then-CEO of AppNexus, long ago. The introduction blossomed into a major strategic partnership and eventually led to the acquisition of the business by Microsoft.
But for the Trade Desk, which is trying to grow its CTV business, the move shows that Netflix aims to get demand from a wider group of companies and serve ads on the open web. Enter the trading desk.
Xandr focuses on its SSP, and although it has a DSP, Green estimated that it accounts for less than 10% of The Trade Desk’s CTV demand.
If Microsoft had gone with Google, the early Vegas favorite to win the Netflix account, or another full-stack vendor, it would indicate that the company was following a walled garden model. The decision to go with Microsoft “is another sign that smart companies understand the opportunity of the open Internet as opposed to the limitations of walled gardens,” Green said.
CTV is also a big opportunity for The Trade Desk because “in relative terms, the market is fair,” he said. Despite the fact that the program is still given scrap as networks sell off the most liquid inventory during the first steps, there is no dominant technology provider below.
No individual company at CTV “is in a position to be draconian,” Green said. By contrast, Google’s control of search, web browser and ad server market share means it’s like a soccer player whistling dead plays and making up rules on the fly.
Going for Google
One of the “global macro trends” that benefits The Trade Desk the most is the regulatory pressure on Google.
When governments and regulators bring cases against Google, Green said The Trade Desk sees tangible benefits in those markets. Agencies are moving more of their business to options like its DSP.
Google’s policies and actions have made it very difficult for companies (“that are smaller than The Trade Desk”) to monetize the open web sustainably, Green said. He also cited the UK antitrust commissioner’s investigation into Google for allegedly favoring its service to the detriment of rivals, potentially causing higher prices for goods and services to be passed on to consumers due to the higher cost of advertising for businesses.
Here to buy
Retail media is the latest addition to The Trade Desk’s earnings report.
In the second quarter, The Trade Desk announced ad-buying and identity partnerships with Walgreens, Target and Albertson’s, among other retail chains. Not to mention The Trade Desk’s DSP setup with Walmart, which documented a full first quarter in development.
These retailers are investing heavily in their shopper ad platforms because the platforms are factoring into larger business decisions about profitability, such as managing worker schedules or increasing online orders for in-store purchases. which have a much higher profit margin than home delivery. rather than just picking some fruit addicted to page display ads.
Retail media does not drive the same massive influx of inventory as mobile, CTV or display. But retail media partnerships dramatically increase the company’s total addressable market, Green said.
Less and less of the web is addressable. A much smaller portion of mobile ads can be targeted by device or advertising ID. Retail media doesn’t bring much inventory, but it does bring user-level data, and otherwise non-addressable media turns into potentially user-targeted outlets.
“Originally, retailers looked to retail media to see a way to make more money,” Green said. “Now they look at it as a way to turn their flywheels faster.”