Advert-supported companies have had a tough couple of quarters. However the advert business’s largest impartial DSP, The Commerce Desk (TTD), is doing simply high quality.
TTD reported $383 million in income, a 21% YoY improve, in its Q1 earnings name on Wednesday. It beat investor expectations, prompting a 2.6% bump in inventory worth throughout after-hours buying and selling, although that later reversed to a 2% decline within the morning.
Whereas fielding questions from buyers, CEO Jeff Inexperienced pushed again towards the concept that DSPs are more and more competing with SSPs and vice versa, saying it was a fabrication of the commerce press with little foundation in actuality.
“There’s a phenomenon right here that feels a little bit bit like actuality TV,” Inexperienced stated, “the place there’s a lot effort to create drama in our area.”
Inexperienced additionally positioned OpenPath as a expertise that enables TTD to set benchmarks for open-auction bidding as a result of it could actually see how a lot advert stock ought to price with out pointless hops and resellers inflating the worth. And it plans to make use of that transparency to chop out costly and inefficient provide paths. Finally, TTD will probably be properly positioned to select the provision chain’s winners and losers.
“Over time, you’re going to see us proceed to reward these gamers that allow worth discovery and punish people who don’t because it pertains to the place we take our enterprise,” Inexperienced stated.
The DSP vs. SSP warfare that wasn’t
Fairly than declaring warfare on SSPs, OpenPath represents TTD taking over inefficiency, Inexperienced stated.
However actually, it’s received its sights set on Google.
TTD pulled out of Google Open Bidding across the time of OpenPath’s launch final 12 months in an try and create a substitute for Google’s black-box method to programmatic.
Inexperienced characterised the digital promoting provide chain as riddled with complexity and inefficiency, which lies largely with how Google’s 90% share of the writer advert server market permits it to obfuscate its interior workings.
Merchandise like TTD’s OpenPath and GroupM’s Premium Market on the purchase aspect and Magnite’s ClearLine and PubMatic’s Activate on the promote aspect are makes an attempt to create a extra direct, extra clear provide path between advertisers and publishers that may compete with Google’s walled backyard, Inexperienced stated.
He additionally doubled down on previous statements that TTD isn’t seeking to create a battle of curiosity by serving the promote aspect and purchase aspect concurrently. He insisted TTD won’t ever be concerned in sell-side yield administration and that SSPs should be solely chargeable for predicting demand and adjusting pricing accordingly. Taking extra management over sell-side pricing, he stated, isn’t appropriate with TTD’s final aim: to get the bottom potential worth for advertisers.
CTV, UID2, AI and the remainder
TTD’s earnings name additionally offered updates on the DSP’s efforts within the CTV market, adoption of its UID2 identifier and a preview of the way it plans to make use of AI expertise to rework its enterprise.
The corporate additionally introduced the promotion of Laura Schenkein to CFO as she replaces Blake Grayson, who will probably be leaving TTD for a brand new function exterior advert tech.
Video was TTD’s fastest-growing channel for Q1, Inexperienced stated, accounting for greater than 40% of TTD’s enterprise, in comparison with cellular at greater than 30% and audio at about 5%. Show represented “a low double-digit p.c share” of TTD’s income.
A lot of TTD’s omnichannel campaigns are actually beginning with offers for high-value CTV impressions, that are then supplemented with cheaper show, audio, cellular and native advertisements.
Inexperienced additionally pointed to the adoption of UID2 by main streaming gamers like Disney, Paramount and NBCU as proof that UID2 is turning into a significant forex for CTV marketing campaign activation. The DSP is near assembly the aim it set final quarter to have 75% of the third-party information ecosystem activating campaigns utilizing UID2 by the center of this 12 months.
On the AI entrance, Inexperienced drew a distinction between TTD’s Koa AI optimization product and the present pattern of generative AI.
Purposes that depend on generative AI to create content material can have hassle monetizing that content material, Inexperienced predicted. And these use instances will proceed to face authorized challenges across the possession of the info used to coach AI fashions. In distinction, Koa is a longtime product that’s primarily skilled utilizing TTD’s personal information set, not exterior information that might face authorized challenges over use.
TTD additionally plans to make use of AI to generate code extra shortly, help in inventive optimization and create coaching modules and assistants meant to demystify the programmatic ecosystem.
Inexperienced instructed AI will play a task in TTD’s subsequent platform improve, Kokai, which the corporate will formally unveil at an occasion on June 6.
