great stuff, AJ!
you also wrote: “The big question is whether they will remain in the lead. Having spent two years and $100M developing these tools, one would hope their lead can continue. There is a big runway if that is the case.”
I keep going back to Green’s (admittedly biased) prediction that the $1T ad market will eventually be nearly 100% programmatic, and that only about 2% of it is today. That is ridiculous runway. Obviously Google/Facebook/Amazon and their Chinese titan peers will get a lot of that. But for independent DSP, the list is small, and TTD is in the lead.
Supposedly ATT offered/is buying AppNexus for about $1.6b and TTD market cap is closer to $4b. How many other AppNexus types are out there to be bought? Probably very few. So even though some were concerned that ATT would do their own DSP, which means TTD potentially loses a client (this was brought up a year ago, too) I don’t see it as a negative. You still need Disney, and Comcast, and all the other players that will be pushing hard into the CTV space to utilize a DSP, and there aren’t enough companies out there for them to buy and/or they would be better-served to utilize TTD’s superior service anyway.
In general, I view the AppNexus deal, coming immediately on the heels of ATT’s approval to buy TW as validation that a DSP is needed to take that OTT content and monetize a CTV strategy.
I note also that Green decided to do his live stream from Asia, where he reiterated that “TTD is a global company that happens to be based in US” as they push for each office location to be fully imbedded in their local markets and don’t rely on HQ for anything other than the tech for the most part.
A final thing I would say is it is always good to see a company in a leader position continue to push the pedal to the floor and innovate and look to further separate from the pack. Reminds me of SHOP looking at implementing VR to enhance digital storefronts for their clients, etc…
Their price is still way up, but has traded sideways, so I do want to see their Q2 overperform to guard against a post-ER drop. They mentioned that ad budgets tend to get set during Q1, so they should also have a good handle on what to forecast for Q3 and hopefully the overall 2018 guidance is raised again. If they can go from $430m projected to an actual of $500m for 2018 (as an example) that would be approx 65% growth and then you are talking SHOP territory to be growing that fast at that size. Getting a bit ahead of myself there, but that is what I would like to see come to pass for the next 3 ER’s.
Dreamer