The Trade Desk reports revenue of $377 million in the second quarter of this year, up just over a third from the same period in 2021.
The company slipped from a profit of $48 million in the second quarter of 2021 to a loss of $19 million this quarter, as founder and CEO Jeff Green reported a $66 million equity-based profit this quarter. Because I got an incentive bonus. The payment increased The Trade Desk’s general and administrative expenses from his $12.5 million in the second quarter of 2021 to his $80.9 million this year.
After the close of trading, TradeDesk shares rose about 15%.
Green said there are macroeconomic headwinds. “But there can be macro headwinds in our face and long-term tailwinds masking them,” he said.
The Trade Desk has delivered the same message about tailwinds in its quarterly earnings calls for the past two years. First and foremost, we promoted our CTV business, promoted our retail media segment, and did a bit of Google bashing as appropriate.
The company’s call to investors on Tuesday was in line with this trend.
just connected
Despite hyping CTV’s rise, The Trade Desk has not disclosed CTV’s earnings. It also did not disclose revenue by general channel or device. The company came closest to revealing a contribution, with video advertising (which includes desktop, mobile and TV) being in the 40% range of overall revenue, with this segment growing rapidly as a percentage of the overall mix. It was revealed that it is growing to According to CFO Blake Grayson.
Green leaned heavily on Disney as an example of a standout film and television entertainment company seizing the programmatic opportunity. Disney has become the largest media player to integrate with the Unified ID 2.0 ID program. The Trade Desk is a pilot partner for Disney’s data clean room product development.
But The Trade Desk wasn’t directly involved in the Trade Desk’s biggest CTV win.
“When I heard that Netflix chose Microsoft, I was very excited,” said Green.
Ad tech circles are small, and Green said he was personally happy. He had introduced him to then-President of Microsoft Advertising and to Brian O’Kelley, who was then-CEO of AppNexus. This introduction evolved into a major strategic partnership, eventually leading to his acquisition of the business by Microsoft.
But for Trade Desk, which is looking to expand its CTV business, the move shows that Netflix intends to source demand from a wider range of companies and serve ads across the open web. Enter the Trade Desk.
Xandr is focused on SSP, and although it does have DSP, Green estimates it accounts for less than 10% of The Trade Desk’s CTV demand.
If Microsoft had partnered with Google, which was an early favorite in Vegas for winning Netflix accounts, or another full-stack vendor, it would indicate that the company was pursuing a walled garden model. The decision to hire Microsoft is “another sign that knowledgeable companies understand the potential of the open Internet compared to the limitations of walled gardens,” Green said. I’m here.
CTV is also a big opportunity for The Trade Desk. “Because the market is fair in relative terms,” he said. Despite the fact that programmatic is still given scrap, the network sells off its most attractive inventory during the upfront, but there isn’t a single dominant technology provider underneath.
CTV’s individual companies aren’t “in a tough spot,” Green said. In contrast, Google’s dominance of market share in search, the web, his browser and ad servers means that football players whistle during a match and make up the rules on the fly.
Aim for Google
One of The Trade Desk’s most profitable “global macrotrends” is regulatory pressure on Google.
As governments and regulators file lawsuits against Google, Green said The Trade Desk could make tangible gains in those markets. Agencies are shifting their business to options such as in-house her DSP.
Google’s policies and actions make it very difficult for companies (“less than The Trade Desk”) to monetize the open web sustainably, said Green. He also referred to an investigation into Google by the UK Antitrust Commission, which endorsed its own services to the detriment of its competitors, and slashed the prices of its goods and services as the company spent more on advertising. could be higher and passed on to consumers.
Shop here
A recent addition to The Trade Desk’s earnings report is retail media.
In the second quarter, The Trade Desk announced ad buying and identity partnerships with retail chains like Walgreens, Target and Albertson’s. Not to mention The Trade Desk’s DSP setup with Walmart that marks the entire first quarter underway.
These retailers are investing heavily in shopper advertising platforms. This is because the platform takes larger business decisions about profitability into consideration. For example, managing working hours and increasing online orders for in-store pickup. It’s not just about collecting fruits that are readily available from your site’s display ads.
Retail media does not bring in a large influx of inventory such as mobile, CTV, and display. But partnerships with retail media will dramatically increase the overall market the company can serve, Green said.
The addressable web is getting smaller and smaller. A much smaller percentage of mobile ads can be targeted by device or advertising ID. Retail media doesn’t bring a lot of inventory, but it does bring user-level data.
“Initially, retailers looked at retail media to see how they could make more money,” Green said. “Now they see it as a way to make the flywheel spin faster.”
