This is another case of a company CEO touting tremendous growth in categories of business that are too small to drive the business. Such as how large CTV business is with this 1000% growth sort of thing.
It is also a matter of TTD getting large enough that it is not taking marketshare in as large of droves anymore in its traditional desktop Google competition like business. Instead it is growing more in line (but still faster as it still takes marketshare) than the market itself, which is slowing. I was very curious if that would be the case, and sure enough it is.
Other aspects of the business are what most investors are investing in anyways. I think online and mobile video is something that TTD can be as dominant in as it is in its desktop Google business. But that market is still growing. Perhaps 5G makes it explode, but that is still a few years away.
As for CTV, I have said it many times, the targeting is just less a value add in this segment. Thus the take from the ads will be less. There is just not enough ad supply to target CTV viewers with precise ads like you see online. And to date, as an avid streamer on ad supported programming, the targeting has been no better than the random targeting you see on traditional TV.
Worse, except for the CW, most streaming ad channels do not even always have inventory to fill their programming. Hulu will often have near to total ad free presentations (such as Gotham often ended up being). Any many times you will only see one or two ads over and over again. CW, that sells its own inventory, I believe uses its traditional TV ads business to fill its streaming of its show ad inventory. And it works for them. There is no difference between what you see on air and streaming in regard to ad delivery.
Thus, not surprising at all to see revenue slow down. At some point other aspects of the business may get large enough and remain explosively growing to make a big difference. I am particularly high on the streaming video ad business, as this is already a proven popular media and ads can be as targeted as they are now on traditional web surfing. I am less confident in how lucrative and how much CAP you can have in CTV because of the inherent ad supply issue making concise targeting not practical. Better than over the air, yes. But you just cannot get to the point that TTD has gotten in other formats in regard to targeting, and thus less differentiation of their product, and lower margins for their product.
My opinion anyways, and I have expressed it or the last year.
This said, it is TTD, it has a very long-term path for growth. And it should be a leading player in multiple new and massive media trends. Therefore, I’m not real concerned about today’s stock results. I will get concerned if TTD just becomes another player. That is not the case today. They have to be their industry’s leader, and if they remain so, I see no reason just to practice doing nothing here.
Tinker