The Trade Desk sees 50% jump in connected TV advertisers

The Trade Desk mostly credited connected TV advertising for its surge in ad revenue in the second quarter, the ad tech company said in its earnings report on Monday. Overall, The Trade Desk’s ad revenue reached $280 million, an increase of 101% year-over-year in the second quarter. Meanwhile, CTV was its fastest-growing channel with a higher growth rate than the overall advertising business. Jeff Green, CEO of The Trade Desk, said that the number of CTV advertisers on its platform topped 10,000 in the second quarter, representing an increase of more than 50% year over year. Green explained the shift in advertiser behavior, saying it is disrupting the traditional TV upfront way of buying ads, when brands commit to spend a certain amount of money on TV ad inventory months before those commercials actually air. More advertisers are transitioning to digital TV outlets, where there is more flexibility and more data underpinning the targeting of the ads. Green said this dynamic works in The Trade Desks’s favor. “Broadcasters recognize that the traditional upfront process is a mismatch. It doesn’t work in a digital world where data and personalization are required to succeed.” CTV is a hot category in digital advertising, as brands are seeing higher prices for commercials on linear TV but lower audience numbers. The Trade Desk is trying to become a clearinghouse for CTV platforms to funnel ad inventory to digital ad buyers, and it competes with Google’s YouTube, Hulu, Roku, Amazon Fire TV and others. The Trade Desk’s ad revenue is still well below, say, YouTube, which generated $7 billion in ad revenue in the second quarter, but it is grabbing ad dollars from major brands like Mondeléz. Green said that the number of advertisers spending more than $1 million on CTV through its platform more than doubled year over year in the second quarter. Green pointed to Mondeléz and Ford as examples of two of the brands. Green referred to one “global major food” company, without naming it, saying the brand shifted a quarter of its linear TV budget to CTV advertising through The Trade Desk. “We are seeing many brands shift TV budgets to the data-driven precision of CTV,” Green said. The Trade Desk does not expect the same revenue growth in the third quarter as it experienced in the second, however. It's worth noting that the second quarter of 2020 was in the midst of the COVID-19 pandemuc, when many brands drastically reduced marketing budgets. The Trade Desk said it expected third quarter revenue to hit $282 million, up from $216 million in the third quarter of 2020. The Trade Desk is positioning itself as an alternative to the “walled gardens” of Facebook, Google and Amazon, the three top digital ad platforms in terms of revenue in the U.S. The Trade Desk is trying to develop new protocols for the open web, comprised of millions of third-party websites and apps, so publishers can keep selling ads programmatically. At the same time, major internet companies like Apple and Google are making internet advertising more difficult with restrictions on sharing data across platforms. The Trade Desk executives touted their initiatives on this front, including support for Unified ID 2.0, which is a replacement for third-party cookies and device IDs. Cookies are the internet trackers on browsers, which are being phased out, while device IDs like Apple’s Identifier for Advertisers are unique to each consumer and helpful in ad targeting, but they are increasingly being hidden from the programmatic advertising ecosystem in favor of more privacy. The Trade Desk struck a bullish tone about Google’s recent decision to delay killing off third-party cookies for several more years. Green said that decision helped fuel adoption of Unified ID 2.0. Green also said adoption of UID2 has reached an “inflection point” as a new common currency for the advertising ecosystem, similar to how merchants must accept payment processing from Visa or Mastercard to stay in business. “You will be operating at a disadvantage if you do not support UID2,” said Green.

The Trade Desk sees 50% jump in connected TV advertisers

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