If you have the time to read Jeff Green’s opening commentary in his earnings report, I highly recommend that you do so.
(1) You will know that most of their business comes from Ad agencies. I’ve always wondered when that would switch ---- and TTD would begin to go more “direct”. That is clearly now beginning to happen more materially ---- so much so, that Jeff is speaking to it out loud.
“We’re also excited to report that we signed up three more of Ad Age’s, top 200 global advertisers. This includes one of the biggest retailers in the U.S., a huge multinational consumer technology firm and one of the biggest global beverage companies in the world. By doing so, these content owners are eliminating many steps in the distribution channels and are monetizing their ad inventory more directly and efficiently. We expect to work with any TV cable or online channel who wants to have a direct relationship with consumers.”
(2) cTV is super hot. Jeff indicated “we’ve never seen it an opportunity like CTV before and I don’t think we’ll ever see one like it, again. It is the biggest opportunity we’ve ever seen probably ever will.” With TTD’s varying partnerships, they are poised to win…
(3) Walled gardens. Jeff says this:
“Facebook is where people go to buy Facebook and Google is where people go to buy Google. Amazon is where people, go to buy Amazon, but the Trade Desk is the place where people go to buy everything else worldwide. That’s why a recent study by advertiser perceptions showed The Trade Desk ranked third right after Amazon and Google in overall demand side platform usage last year by surveyed marketers and advertising agencies.”
Think about that folks. Already third on demand side. The world doesn’t just visit Amazon, FB, Google. We visit hundreds of other non-walled garden web-sites. TTD is protected against the “I don’t use FB any more” thinking ---- as they have thousands of sites on the supply side. TTD wins longer term.
(4) Privacy. TTD doesn’t keep personally identifiable information. They can auction to advertisers that you want to present their golf products to 40 year old males in this geographic area ---- and the beauty is thatt TTD doesn’t keep those 40 year old names or other PII in their platform (like FB, AMZN do as examples). This is helping them actually win business in Europe given GDPR. Read it this way folks ---- TTD is now at the point where regulation is helping them win business. Can FB and GOOGL say that?
(5) Jeff spoke throughout the earnings report re: the international opportunity. Frankly, I disagreed w their approach to this last year and was wanting them to focus on US first. I’m glad to eat crow on that. China is their smallest market today yet Jeff feels it will be his biggest some day. They are partnering w the three BATs of China ---- which is how you win in China. Jeff also spoke to how Spain, Indonesia, UK, Germany, Australia and other markets were all performing at record levels. PS, have a look at the breadth of roles they are hiring for and geographic footprint of ---- https://www.thetradedesk.com/careers/open-positions.
(6) Omnichannel. This quote from Jeff says it all:
“Over the last year we integrated multi-channel campaign capabilities in our platform in a practical, actionable way. Now, one third of our customers are buying inventory in five or more channels on our platform. And like in the past quarter, we see much of the incremental revenue from their increased spend going straight to the bottom line. Our multi-channel proficiency enhances our position and reputation as the independent alternative to the walled gardens.”
Look, I could keep going on this company, but I’ll stop for now. Full disclosure, TTD is my largest position. I’ve been adding recently and feel I should be adding more. Have bought 7 times since May 2017 and am up on average 60.19% w the first purchase being up 134%.
Jeff is building a juggernaut here. Hey Saul, is that one of your categories?! PS, jazzed to see Saul buy into this ---- even though ad tech (I believe I heard him say) has been an area he has been burned.
I’d love to see Saul’s financial analysis of this company ---- Saul I always love that work you do. And now own many of the equities you’ve mentioned. ZS is my third largest.
Best wishes to all,