The Trade Desk moves into China

(Press release shortened and paraphrased)

The Trade Desk moves into China
Partnerships with Baidu Exchange Services, iQIYI, Tencent Social Ads, and Youku provide multinational advertisers access to premium audiences in China

We now enable brands to effectively reach and engage millions of consumers in China through integrations with China’s premium media companies, including:

? Baidu Exchange Services
? iQIYI, Baidu’s video streaming service
? Tencent Social Ads
? Youku, Alibaba’s video streaming service

Our partnership with the country’s top three streaming video platforms presents global marketers with unparalleled access to audiences in China. Innovative global marketers can now leverage our trusted technology platform to directly reach the rapidly growing consumer market in China with display, mobile, video, and native advertising campaigns.

China is a key market for global brands looking to grow their customer base. Mobile expertise is crucial for successful marketing in China, with 753 million mobile internet users accounting for more than 97% of internet-connected adults in China. And digital video, watched by more than three quarters of internet users in China, presents another opportunity for global brands trying to reach engaged audiences in the region.

A leader in mobile and video, The Trade Desk’s continued omnichannel growth includes 89% growth in mobile advertising spend, and mobile video growth of more than 150%. Overall, mobile accounted for 46% of gross spend on our platform last quarter, highlighting the increasing importance of this channel to global advertisers.

“Our partnership with The Trade Desk is our first partnership with an international demand side platform,” said Andy Sun, General Manager of Programmatic Business, iQIYI. “We value their independence and objectivity and see this partnership as an important step in providing leading global brands access to millions of engaged consumers in China.”

Benson Ho, Chief Data Strategy Officer, Tencent Social Ads, noted, “Our high audience coverage and unique data insights are crucial for marketers wanting to understand consumers in China throughout their entire journey. Through our PMP integration with The Trade Desk, innovative global brands can more effectively reach and engage with this valuable audience.”

Jeff Green, CEO of The Trade Desk, said, “Tapping into the growing internet-connected middle class in China presents a huge opportunity for brands looking to grow their global presence. Our international reach, innovative technology, and key integrations with China’s premier media and technology companies empower innovative advertisers on our platform to successfully reach and engage millions of consumers in China today.”


And their foray into China begins!!!

Folks holding the Trade Desk for some time have been listening to Green’s comments on their investments in China and the overall market potential.

The Trade Desk has not been having trouble steadily growing the business. I seriously doubt Green has factored in growth from China in next quarter’s forecast. What I’m saying is this will be purely incremental business…upside.

This is something shareholders have been anticipating for quite some time. Green and his team seem to have done a masterful job of aligning with the key players in China.

This press release is very exciting.


The Trade Desk has not been having trouble steadily growing the business. I seriously doubt Green has factored in growth from China in next quarter’s forecast. What I’m saying is this will be purely incremental business…upside.


Agree that Green is performing magnificently.

However, word of caution about China:

  1. The revenue from China is likely NOT going to be weighted to western markets. The consumer’s ability to spend in China is far less than say the US (the parallels with NFLX and IQ comes to mind with the revenue per consumer for NFLX being at least a 2 multiple difference). Over time, as China’s economy and middle class expands, this should be an increasing opportunity but I would not expect a massive revenue gain as a % of total revenue for a few years.

I get that China is hoping to continue to grow its middle class but this is a 10 year event and China’s economy is on the edge at this moment with bank loan issues, 20% vacant and hyperinflated real estate, stock pledges by company principles, etc.

Keep in mind that most of these agreements have been in place since earlier this year and yet Hong Kong market grew by just 107%…less than Europe.

Quite honestly, I am perhaps more excited about Indonesia which it turns out is a huge market…largely because of caution #2:

  1. China has a long history of forcing foreign entrants to “partner” with a Chinese company that then learns and steals the IP of the original foreign company. I am not sure about the details of TTD’s arrangements with the big 3 (BABA, BIDU/IQ and TCEHY) in China but I sure hope Green is protecting the IP.

When these Chinese companies say TTD is “integrated”…watch out IMO.

Take a look at this video of Green discuss China and the requirement for partnering with CHinese companies:…

I would love to know the terms behind these “integrations” with Chinese companies but doubt we will ever know them…but to assume that BIDU, BABA and TCEHY, etc won’t themselves try to wall their gardens or steal the IP from TTD would be to assume that China has changed its ongoing ways and ongoing source of much discontent with IP rights (MSFT loses some $10 Billion annually from China stealing its IP).

Anyway, yes great that Green is omnichannel and omnicountry…but my expectations on China are more tempered for the above 2 reasons…again these deals have been out there since earlier this year.

As an aside, sure wish we had a actual breakout of the various countries and initiatives (CTV) by % of total revenue.



I’ve written recently on NPI regarding my China paranoia and I referred to it specifically with regard to TTD and their IP.

My point is the following. To date, I see TTD as having done a great job executing on what they say they will do. We can see it in the growth rates. If things work out in China, this press release is what we have been waiting for so that growth can begin in that country. I am not saying IT WILL work out FOR SURE in China. In fact, I have the same concerns as you. I believe I talked about “a Chinese company all of the sudden popping up out of nowhere whose platform is eerily similar to TTD” or something of that ilk. So, yes, I’m keenly aware of the Chinese “problem”. However, if it works in China, it is ALL UPSIDE!

Yes, I’m excited about Singapore and many other international growth areas along with CTV as well.

Your point about China and spending/ARPU is a good one. I’m more interested in what companies want to spend advertising in the Chinese market. Maybe that will be analogous to consumer spend and maybe not. That is what will drive TTD’s revenues.

On the Chinese economy as a whole, there may be many hiccups along the way, but middle class growth cannot be denied. If the middle class keeps growing, things will be okay for TTD. There may be economic issues in China, but we are talking about almost zero revenue from that market today. So I like the comparisons!!!



Thx for your post Saul. Interesting to a certain extent as far as news goes but knowing how you feel(in general) about Chinese companies and your distrust surrounding them(some possibly)lets hope that Jeff Green has done his homework and doesn’t get ripped off. Seems too clever a guy not to have looked at all the angles though.

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It is unlike me, but I actually do not know. Is not The Trade Desk a SaaS offering? Trade Desk is iterating its product in an agile and on a weekly basis. That does not happen with server or desktop side software.

If SaaS then the Chinese stealing software by a partnership is not so easy. Trade Desk will choose the cloud services they will use, how they will distribute the content (if necessary Trade Desk can keep the IP safe in say Singapore while sending mirror images to a Chinese cloud, that sends it along to the Chinese user of the data). This is not like what happened to Microsoft, who has gone on to profit greatly anyways by gaining cloud users.

TTD also brings the customers.

As such, I am not nearly so worried about the IP being stolen as one would be say with a Cisco or as we all know AMSC. But fortunately for Cisco, and not for AMSC, Cisco’s whole product is too complicated to be copied by just stealing say the chips, or a driver or something.

As a SaaS, TTD’s IP should be as safe as anyone’s, and TTD brings the customers. Were China to steal TTD IP, it is like that American brands would be told not to deal with the offending parties as their DSP.

And this would force the offending party, if they wanted American brands (and possible ROW as well) to advertise with them, to, as Obama stated, “stop it.” At least in relations to TTD.



As complicated as the Chinese market is, The Trade Desk isn’t rushing to make a profit in the country. In its earnings call this month, Jeff Green, CEO for The Trade Desk, said that while China has massive publishers and there are tons of potential growth opportunities ahead, he doesn’t expect the China business to pay dividends for a number of years because the country is about seven years behind the U.S. in programmatic adoption.

“We are not taking a strategy of go big or go home. Lots of Western companies go to China claiming that they will be big in four or six quarters, and then they fail and pack up,” said Perdue. “We are in it for the long haul — we need to go step by step in China, teach people how to use our platform and gradually build local features. There’s no easy way to succeed.”

This from August 2017.

Again…not trying to be a killjoy about China…but this is more likely a long slog.

The one criticism I would have about Green is that he is carefully controlling the narrative to % growth instead of telling us the absolute revenue…107% YoY revenue growth from Hong Kong could mean $100.


When these Chinese companies say TTD is “integrated”…watch out IMO.

I haven’t dug too much into this yet, but in general terms I agree with the above. And my own employer, ARM, has just started a “joint venture” in China. Which makes me nervous. I’m going to have to evaluate this after the holidays and see what my feelings are regarding my TTD shares.

Bill Jurasz


I agree, the cheers when a young, growing company expands the business by entering into partnerships must inevitably be tempered when the partner is the Chinese state; less voluntary symbiosis and more mandatory parasite. Chinese companies are in every case fronts for the state, which is hostile to the west and to the freedom of its own people (unrelenting probing and hacking of western defence systems, utilities and companies; the expanding ‘social credit’ system at home etc. Yet how difficult, even impossible it has become for investors to avoid supporting and giving comfort to the enemy by their actions. I don’t think these remarks are political, merely facts. We hope by trade and jaw-jaw to change them. They expect to change us.


Guys - frankly I’m disappointed in this reaction. Not investing in Chinese companies is one thing, not investing or being discontented about an American company listed in the US, going global and entering the world’s largest market and #2 largest economy because of risks?

Why don’t you just look for nice American companies that only operate in Delaware for God sake, that’s a lovely well regulated place with a good legal jurisdiction.

Apple has done very well out of China and any shareholders of Google would have loved to have had the opportunity to compete with Baidu over there.

TTD is not sinking an asset heavy investment into China. They have entered China before the Chinese equivalent of TTD gets so entrenched that TTD would be out of the game forever.

They have partnered with all of the top PRIVATE non state run enterprises which hold 800m+ people in their MAUs and sit on the largest data bases in china with the largest consumer platforms. They bring their tech and their connections with advertisers in the west and media operators to China and they strike agreements with all the right players. What do you want TTD to do? - build their own WeChat social media and Baidu search engines themselves just to be able to operate in china?

This is brilliant news. Not entering China gives no upside and leaves room for an eventual rival to emerge. Entering China with this business model and these partners and adding China as one of its trading markets represents huge upside potential with not much risk. It ain’t said it’s moving its global headquarters or product development or some capital intensive plant to Shanghai or anything!

If you only wanted to invest in US companies that had zero business with China you’d have a very short list indeed.

Moaning about Chinese practices is a very different matter to evaluating this announcement from TTD. Some of the comments in this thread are just so off base from the reality of the TTD announcement or doing business in China (which I have been doing for 10 years) it is untrue.

The Chinese sector by sector are removing the requirement to operate only with a Chinese partner. Starting with financials and cars as announced in Q2. This removal of the local partner requirement & increased market openness is a direction of travel to be recognised and encouraged rather than begrudged or ignored in China.

I rarely say it but sometimes very very occasionally this board is short on perspective and long on prejudice and reactionary instincts.



Why have’nt Baidu and Tencent been able to wall their gardens like google and facebook? Facebook, Google’s ad targeting techniques are unlikely to be too complex. If you read what the Tencent and IQ management said it appears they expect this partnership will help them get international advertisers. Nothing about local.

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Not investing in Chinese companies is one thing, not investing or being discontented about an American company listed in the US, going global and entering the world’s largest market and #2 largest economy because of risks? I rarely say it but sometimes very very occasionally this board is short on perspective and long on prejudice and reactionary instincts.


You are seriously taking this conversation in the wrong direction.

The caution has NOTHING to do with prejudice and ALL to do with reality:

  1. China forces any foreign business to partner with a Chinese company…does the US do this??

  2. China is the most egregious country to rip off IP (see MSFT, MU examples)…does the US??

  3. Green has said himself that this is going to be a long slog…7 or more years.

These are FACTS…not prejudice. Conclusion…the China news is not earth shattering…been known for over a year.

Lastly, I would be remiss in not stating the elephant in the room…Green is VERY carefully controlling the narrative. CTV growth rates are incredible…but off what absolute base…the number is meant to wow the market. This repeat announcement into China is old news but again announced as though some seminal event is about to occur.

Point being, follow the absolute numbers…these exaggerations by Green are meant to keep the market interested…one day they may materialize into something really special…but right now they are mere spit in the wind vs say the advertising dollars pulled in by a FB which truly dwarf TTD by orders of magnitude.

And these comments…from a TTD long…grounded though they may be…in the spirit of trust but verify.



1) China forces any foreign business to partner with a Chinese company…does the US do this??

This isn’t true…

I have worked with 4 US companies in APAC that have all setup companies in China, non of them have any partnership or tie to a partner in China. US companies can setup WFOE (Wholly foreign Owned Entity) in China or setup legal entities in Singapore or HK with Rep offices in China though Reb offices have limitations.

I think it depends on the degree of what you are trying to do which will determine to you need to setup a WFOE, Rep office or Joint Venture. But for what the majority of activities of what MNCs do in China, they usually will setup a WFOE


Duma - for once can we keep this focused on the growth stock opportunity as the subject and not drag politics into the equation. This is Saul’s board not NPI.

The timing of re-iterating this is actually very important.

TTD in the last few quarters has called out Asia as a source of hyper growth (esp. Singapore and Australia).

They have announced layering it a regional management structure for Asia and entered several new markets recently.

The media industry in China is in the spotlight right now. We have already had some massive China IPOs and Tencent and Ali Baba are considering more media IPOs to come. With these successful listings, media companies will have more money to accelerate investments and collaborations.

Almost all of the large ecommerce players in China from Ali Baba to JD to NetEase’ Koala have called out a focus on bringing foreign imported goods to the Chinese consumer - perfect for TTD’s expertise.



Duma - for once can we keep this focused on the growth stock opportunity as the subject and not drag politics into the equation. This is Saul’s board not NPI.

There were no politics in my posts…not sure what you are referring to but have it your way.


Ant, well said, thank you!