The digital advertising firm Trade Desk reported revenues of $280 million for Q2, representing a growth rate of 101% Y-O-Y. The growth rate is driven by strong growth in Connected TV (CTV). Its revenues were a major piece of the gain. In an earnings call on Monday, Jeff Green, founder, and CEO of The Trade Desk said:
“We have nearly 10,000 CTV advertisers on our platform, up over 50% compared to last year.”
He further added that through the first half of 2021, brands spending more than $1 million in CTV on their platform have already doubled year-over-year. CTV is the fastest-growing channel and growing as a percentage of overall revenue. It is completely driven by customers in the form of content subscriptions. Its supply hit the roof during the pandemic. Green said,
“One thing we constantly say to advertisers is that whatever you thought you knew about the scale and reach in CTV six months ago has changed dramatically.”
The advertisers growing demand in the Connected TV space especially for premium ad inventory led to the company’s strong revenues. The shift in the behavior of the advertisers is disrupting the traditional TV buying ads- where brands commit in advance to spend on TV ad inventory even before the commercial releases. There is a paradigm shift of advertisers transitioning to digital TV which offers flexibility and data for ad targeting. The ad tech company is acting as a clearinghouse for CTV platforms to funnel ad inventory to digital buyers and is in direct competition with YouTube, Hulu, Roku, and more. Trade Desk is grabbing ad dollars from brands like Mondeléz and Ford. Green also mentioned a food giant brand that shifted a quarter budget of linear TV to CTV.
“We are seeing many brands shift TV budgets to the data-driven precision of CTV.”
On the other hand, Trade Desk is positioning itself as an alternative to the walled gardens and launched the new ad-buying interface Solimar recently. The Trade Desk is trying to develop an open programmatic approach that lets the advertisers access audience ID and export data to their own database. At the same time, walled gardens don’t allow to extract data and restrict data sharing across platforms.
Many broadcast companies are early adopters of the Unified ID 2.0 (UID2) standard, a replacement for third-party cookies. In recent weeks, as reported by Adweek, Interpublic Group joined the list to support UID2 along with Omnicom Media Group and Publicis Groupe. Green is bullish on consumers’ readiness to exchange data for more information from brands.
On the call, Trade Desk emphasized two key drivers that determine future growth – the rise of CTV and its data policies. It is just beginning to witness advertisers moving as much as one-quarter of media budgets to CTV to minimize waste.
Trade Desk expects third-quarter revenues of at least $282 million.
