Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Trade Desk Trade-Offs
The investment bank Needham has both the bullish and bearish takes on The Trade Desk after the DSP reported earnings this month.
And there is a compelling case in both directions.
The Trade Desk is still gaining share from other independent DSPs. Its fastest-growing channel for years, CTV, will push video ahead of display as TTD’s number-one format. But the growth has plateaued – video ads grew from 42% of The Trade Desk’s revenue in 2021 to 45% last year.
TTD’s balance sheet boasts $1.5 billion cash, no debt, and the DSP is highly profitable. Also, investors consider The Trade Desk the biggest gainer by the DOJ crackdown on Google.
On the flip side, TTD’s profit margin remains high, even as other DSP take rates have all come down (not counting Google or Amazon). Paired with a high valuation and slowing growth rates, it could be a tough sell.
The other big risk is the company’s client concentration. Its top 10 customers – the largest ad agency holding companies – represent more than 60% of The Trade Desk’s revenue, according to Needham analysts Laura Martin and Dan Medina. Which means if one or more of them leave TTD entirely, it would be a real hit to year-over-year revenue.
Eat Away At The Truth
Classic CPG and food brands have had a series of tiffs with startup rivals over how they market their alternatives.
Is it mayo without eggs? Is it milk without dairy? Is it bacon without pig?
Silk, the soy milk brand, ribbed the dairy farmers with its latest ad spot, which features the children of people from the old “Got milk?” commercials.
Last week, the FDA ruled that brands like Silk or Almond Breeze can use the “milk” branding, but they must place on their labels how the product differs nutritionally from cow’s milk.
Oatly is marketing its cream cheese (which has no cream or cheese) with a subtle dig at the Kraft Heinz-owned Philadelphia brand. Oatly may be capitalizing on decades of branding behind “cream cheese,” but it’s leaning into the fact that its product was developed at a food lab in Philadelphia. The Philadelphia brand is from New York City and only took the Philadelphia name because Pennsylvania was famous for dairy farms.
Who’s the liar now?!
The Snaxshot newsletter has more on the trend.
Stay Safe
The audio giant iHeartMedia teamed up with brand safety company Sounder, which it partly owns, on a podcast brand safety score, Adweek reports.
The tool, which currently has no name, scans each podcast episode’s transcripts for brand safety flags. It judges episodes against standards from the Global Alliance for Responsible Media and sensitive topic categories from the IAB.
The tech is the latest brand safety play by an audio company, joining other tools by the likes of Acast, AdsWizz (owned by Pandora), Barometer and Comscore.
The podcast advertising market totaled a relatively measly $2 billion in 2022, the IAB found, partly because of brand safety and suitability concerns. Big brands hesitate to invest heavily in podcast advertising because brand safety concerns are hard to assess – and consequences could be severe if a brand sponsors the wrong program.
Podcasting has other drawbacks, too, such as a lack of programmatic infrastructure. Media buyers must buy inventory vetted as brand safe straight from iHeartMedia.
And all the proprietary brand safety tools are no substitute for a universal solution that media buyers can use across audio and streaming companies.
But Wait, There’s More!
The Privacy Sandbox-based third-party cookie alternative FLEDGE is gaining traction – but not with SSPs. [Adweek]
Snap debuts ‘My AI’ chatbot powered by OpenAI’s GPT technology. [Bloomberg]
The US advertising marketplace fell for the seventh consecutive month in January. [MediaPost]
It’s time for Alphabet to spin off YouTube. [The Economist]
You’re Hired!
Prohaska Consulting names Mark Wright to lead its M&A client practice. [release]
