Why CTV Is The Trade Desk's Biggest Focus Of 2020
by James Hercher // Thursday, November 7th, 2019 – 7:48 pm
The Trade Desk brought in $164 million in Q3 revenue, up 38% from Q3 2018, according to its earnings report Thursday.
The company's profitability ticked down from $20.3 million to $19.4 million in the quarter because of large investments in areas like connected TV (CTV) that will maximize profitability over the long term, The Trade Desk CEO Jeff Green told investors.
"CTV is the most important strategic focus of our business going into 2020," Green said.
CTV growth rates are starting to rationalize from recent years, but it's still a fast-moving channel.
Since Amazon launched a Fire TV supply integration with initial demand partners The Trade Desk, dataxu and Amazon's own DSP, Amazon impressions on The Trade Desk are up 21x, Green said. The Comcast ad tech business FreeWheel, the largest SSP for OTT inventory, introduced a header-bidding solution that increased inventory from its supply partners for The Trade Desk by more than 300%.
Roku's acquisition of independent DSP dataxu could also be a positive indicator for The Trade Desk.
For now, Roku said it will offer buyers access to the Roku ID via dataxu. Such a move, said Green, would avail Roku content on even terms to all buyers and let them use the ID to, say, measure ad reach and frequency across other video supply.
On the other hand, Roku could eventually create its own proprietary exchange and walled garden, a la Google with YouTube or AT&T's vision for Xandr and WarnerMedia.
But The Trade Desk's future does not hinge on Roku's decision. Green noted that dataxu processes more than $100 million, while The Trade Desk expects to have more than $3 billion in spend on its platform this year.
Even the walled-garden type TV platforms can be important steppingstones for The Trade Desk.
Disney's ad platform, which uses Google tech, is another factor in The Trade Desk's CTV optimism. Disney has perhaps the best potential to bring programmatic features to live TV.
Disney's live sports deals – the company owns ESPN – are plagued by some linear TV ad standards. A game going to overtime or extra innings, for instance, likely has its largest and most engaged audience of the entire broadcast, Green said. But often the ads end up being repeat spots or are given away by the network.
"As more content providers build and launch streaming platforms, advertisers can add data to their campaigns for the first time," he said. "These companies have changed the game in streaming content and programmatic advertising."