During the first two years of the pandemic, a trendy bit of jargon was to talk about the “K-shaped recovery,” meaning some companies bounced back strongly, while others sunk deeper into a financial pit.
You can see this same concept playing out again in the ad world as big platforms like Google and Meta recover marketing budgets and revivify their data-driven ad targeting capabilities … and broadcasters, news publishers and advertising intermediaries (including agencies and independent ad tech) grapple with ad revenue slowdowns.
There is an exception to that rule, however.
The Trade Desk (TTD) continued its run of growth, reporting Q2 total revenue of $464 million, a 23% jump from last year. TTD experienced 35% YOY growth in Q2 2022, so this past quarter’s earnings comes on top of a strong comparison.
TTD has benefited from advertisers growing “more deliberate with their spend,” CEO Jeff Green told investors on the company’s earnings call Wednesday. As advertisers “understand more about the power of programmatic,” he said, they increasingly gravitate to TTD’s platform, he said.
Walled garden dynamics
The Trade Desk also benefits from the mere fact that Google is under regulatory scrutiny.
A few years ago, Google was under pressure because of privacy-related allegations. Now, the strongest spotlight is on antitrust concerns, according to Green.
The antitrust pressure on Google “makes the market a bit more fair and makes it easier to predict Google’s decisions,” Green said. “It also makes it so that they are undoubtedly going slower, and that creates opportunity for us to once again grab land.”
But TTD is also starting to win some philosophical victories, which could bear fruit with major budget wins down the line.
Unlike digital-native walled gardens, broadcasters and big CTV ad suppliers are among the earliest adopters of Unified ID 2.0, TTD’s identity graph solution. Warner Bros. Discovery was the latest partner to join the program, in June, Green said. But Disney, Paramount and NBCUniversal have all integrated in the past year.
“Because of our objectivity and our connectivity to nearly every major CTV content provider, our platform is the most eligible for the tidal wave of demand as it shifts away from linear and walled gardens,” said CFO Laura Schenkein.
Growing retail gardens
Meanwhile, the retail media garden walls are coming down, with major consequences.
When Macy’s announced its first DSP integration with TTD in May, Melanie Zimmerman, who runs the Macy’s Media Network, cited both Albertson’s and Walgreens as trailblazers for how Macy’s approached its data-driven media business in a pre-briefing with AdExchanger.
Advertisers that use the Macy’s data for ad targeting can reconcile the IDs on those campaigns with the same IDs for general open web programmatic campaigns on TTD. That’s a major differentiator from Amazon or even Walmart. (Walmart Connect is built on TTD’s tech but has a more restrictive walled garden model than Macy’s).
Green cited three national retailers – Albertson’s, Dollar General and Walgreens – that are forging a new path by giving away store-based and ecommerce sales attribution for free to advertisers that use their data for ad targeting.
Advertisers will gain transparency into which media channels generate sales, and also which retailers have the strongest data sets and ad targeting capabilities. Google, Amazon and Meta don’t expose that data; they only self-attribute without exposing the underlying IDs.
Making this data more available – and transparent – to advertisers will help improve the entire funnel, Green said, and allow them to optimize their advertising in order to sell products in brick-and-mortar stores, not just online.
Over time, the idea is that budgets will flow to retailers that do this almost like water flowing downhill. With visibility into sales in those stores, brands will push sales in their direction. Taking a page from the walled garden playbook of Google or Amazon isn’t the only way to attract advertiser budgets.
And if big retailers are getting on the open programmatic bandwagon, advertisers will meet them there, too, according to Green.
Advertisers, he said, have begun “choosing the objectivity and performance of our platform over the murkiness of walled gardens more than ever before.”
