The Trade Desk CEO Jeff Green painted a rosy picture for 2020, telling investors during the 2019 earnings report on Thursday that he’s never been so confident about the company’s growth prospects.
The Trade Desk earned $215.9 million in Q4 2019 and $661.1 million for the full year, up 35% and 39%, respectively, from the year before. And it is forecasting another year of 30% or higher growth in 2020, with revenue jumping to at least $863 million.
One revenue booster for this year will be the US presidential election cycle.
Many large ad platforms have “decided to sit out or limit their role” in political advertising this year, Green said. But search and social platforms are vulnerable to accounts spreading misinformation and creating organic traction with their own posts. He said The Trade Desk doesn’t have the same conflicts since it only deals in paid media.
“We’re rapidly becoming a preferred platform for major political campaigns,” Green said.
A big political year does funny things to year-over-year reporting – 2020 will look fantastic, but it means 2021 could look like a slowdown. The more exciting and sustainable growth drivers come from The Trade Desk’s preferred deals with important inventory suppliers.
Last year, The Trade Desk became the first DSP to purchase Disney’s programmatic live sports ads, Green said. It was the first to run global programmatic guaranteed campaigns with Spotify and to go live with FreeWheel’s Unified Yield product, which applies header bidding tech to TV. The Trade Desk is the only third-party DSP integrated with Amazon Publisher Services to buy Fire TV inventory (since Amazon kicked out dataxu after it was acquired by Roku).
As in recent earnings calls, The Trade Desk repeatedly referenced its scale, which vastly outmatches any DSP aside from those owned by Google, Amazon, AT&T and Verizon. That scale creates advantages the rest of the market cannot meet.
For example, other independent DSPs typically have bid-filtering algorithms in place with SSPs, because it would be too expensive to analyze and store every impression pumped into the bidstream. The Trade Desk leapfrogs those filtering deals because it’s willing to absorb the costs.
And though platform operation expenses increased by $42 million last year, which CFO Blake Grayson attributed to The Trade Desk’s QPS (queries per second) growth, those costs are diminishing as a percent of platform spend.
Other independent DSPs can’t shoulder the full costs of programmatic QPS, which gives The Trade Desk more inventory visibility and a leg up in bakeoff scenarios.
The Trade Desk also brought down its take rate last year – a fact the company didn’t disclose but is revealed by gross spend on the platform outpacing the company’s revenue.
“The strategic part of (lowering take rates) comes down to whether you care most about making money or grabbing land,” Green told an investor who asked to confirm the take rate decline. “It goes back to client retention and making that flywheel spin faster.”
