The earnings call just ended
Every time I walk away from a TTD Jeff Green earnings call, I walk away wondering why I don’t have a lot more of my portfolio in Trade Desk (I already have 15% in TTD) and today was no different.
Here are a few bullet point notes I took from the call:
CTV revenue in Europe was up tenfold in Q2’21 vs Q2’20, from a small base (they later said, it actually increased 11x), Europe is early in the cycle converting to CTV compared to USA but “won’t stay small for very long”. The Trade Desk “significantly expanded relationship” with Sky, one of the biggest broadcasters in the UK and Europe.
There are more than 10,000 CTV advertisers on their platform, up over 50% vs a year ago
They can reach more than 87 million households through CTV, which they claimed more households can now be reached by CTV than can be reached through linear TV.
An industry group (I missed their name) reported growth in ad supported video from $4.4 Billion in 2020 to $18 Billion as soon as 2025 (this would bode well for both TTD and Magnite)
Solimar – This is the new platform that Trade Desk has been building for a while now and just released this quarter. They called it the biggest release in company history, and has been exceeding their own expectations already. We should expect the “majority” of buying to be on the Solimar platform by the end of the year. Good timing to release it now so that the users get used to it before the big peak holiday advertising season.
The commented that some advertisers (not on TTD) have actually been paying “to make customers hate them” by showing the same ads over and over again. (my own side note - I used to personally hate chef Guy Fieri for a while for this exact reason, after seeing the same Diners Drive ins and Dives commercial about 20 times in a short period one day) Purchasing through TTD prevents this from happening.
Jeff took a few shots at the walled gardens (google, facebook, etc) and talked about why advertisers are better off going through TTD on the open internet rather than them.
Big progress on UID 2 (new anonymous tracking system to somewhat replace cookies), talked about how various ad agencies are adopting, and how Snowflake is working with UID 2 to help their customers use their own data to work better with the advertising decisions
Jeff later referred to Snowflake’s adoption of UID 2 as “one of the biggest headlines for UID2 to date”
They said UID 2 is at a “critical inflection point”, becoming necessary to do business and compete effectively. Comparison to accepting credit cards. Stores could choose not to take Discover or AMEX and be ok. But not accepting Visa or Mastercard would usually really put you at a disadvantage and make it difficult to operate your business successfully…and that’s where UID 2 is going (or where it’s at now), becoming as necessary to adopt as Visa/MC if you want to be able to effectively compete.
India, they referred to as the first big market that TTD entered starting with CTV rather than starting with display. One of the deals mentioned was with Samsung in India. (Again my own note - Makes it sound like TTD is somehow preinstalled in Samsung TV’s in India?, almost like Roku, although it’s certainly not a full blown TTD interface like Roku has, so I’m not sure how exactly it works. Maybe I misheard, but my ears perked up at this. I might email IR and look back at their last 10-K to try to understand this better since there were no questions on it)
Jeff took a shot at basically every other high growth tech company by saying TTD is “Generating EBITDA at higher rates than almost all of our high growth software peers”…(which has been consistently true for a long time!)
They said that Video, including CTV, is currently in the “high 30’s percent of the business”
CTV will continue to drive growth over the next couple of years
Toward they end they were asked about a deal with Walmart (might have been Laura Martin from Needham) which, if I heard it right, enables advertisers to see how the ads are working on sales in physical sales in real time (or close to it)?
- This is really interesting to me because I used to work for a large independent music distribution company, that was essentially a tech company and they had a deal with iTunes to get live download/streaming data and their IT dept built a “heat map” that showed live data of where digital music was being purchased in real time. So an advertiser could run a very small test advertising campaign via facebook, google etc in some small city anywhere in the country, and see instantly if it generated sufficient returns from sales, and the record label/advertiser could immediately decide if they should roll out those ads to more geographic locations. It was a game changer and something none of the competition could offer to their record labels.
- That’s how this Walmart deal sounds, although instead of just limiting it to data from online sales, it sounds like it also provides advertisers with pretty instant (maybe not real time, maybe daily, etc?) data on how your products are selling in particular walmart physical stores after you run some ads via TTD in that city. That’s a big deal and should definitely provide value to ad buyers that other DSP’s without the size and reach to do a big deal like this with Walmart(or can’t develop the platform to give them timely useful access to the data) can’t do. I’m sure TTD’s Walmart deal includes lots of controls to make sure the data is secured and safeguarded and only being used for its intended purpose, which a smaller DSP also probably couldn’t guarantee).
I could be making some wrong assumptions about how this works, but that’s how it came across during the call, and is probably just one small example of the value that Trade Desk adds, and why so many advertisers use their platform for their ad campaigns.
That’s it. I still feel this is just an amazing company that is continuing to take over the world (of advertising at least). No question, despite how much its stock has risen since I first invested, I want to continue to be a part of this ride for a long time to come. I have the utmost confidence in Jeff Green and the Trade Desk