Posts for 'The Trade Desk'

On the last podcast we did a deep dive interview with The Trade Desk’s SVP of Ventura TV OS Matthew Henick. Because we both believe this initiative has real potential to impact the CTV/streaming industry, this week we’re circling back to share our key takeaways from the interview.

At a high level, we agree with Matthew’s situation analysis of the TV OS market and the pain points for all constituents (TV OEMs and retailers, advertisers, streaming service providers and viewers). We also agree with The Trade Desk’s initial focus on TV OEMs and retailers.

However, we observe these are challenging deals to get done given entrenched TV operating systems and inertia, company politics and all-too-often hesitation to adopt new technology, irrespective of its potential superiority to incumbents. 

Nonetheless Ventura offers key competitive advantages, and the pain points appear to be getting more acute, thereby enhancing Ventura’s opportunity. We also discuss the advertiser, streaming service provider and viewer benefits. Add to all this The Trade Desk’s successful track record of creating software at scale and its extensive industry relationships and Colin and I agree it’s going to be a lot of fun to watch Ventura develop. 

Listen to the podcast to learn more (33 minutes, 8 seconds)

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Colin and I are excited to welcome The Trade Desk’s SVP of Ventura TV OS Matthew Henick to the podcast for a deep dive interview about the company’s entrance into the ultra-competitive TV OS industry. Matthew explains why the Ventura OS is strategic to The Trade Desk’s core Demand-Side Platform, intended to drive more transparency in the CTV ad supply chain. 

Matthew’s perspective is that current operating systems’ lack of transparency creates pain points across the CTV industry, for advertisers, streaming providers, TV manufacturers, retailers and importantly viewers. For The Trade Desk the keys to resolving these pain points are enabling TV manufacturers with a sustainable, recurring business model while empowering streaming providers to optimize the value of their inventory. With a transparent TV OS, The Trade Desk’s DSP can further leverage its clients’ CTV ad spend. 

Matthew gets into the fine details of Ventura’s competitive advantages and how it will be distributed to traditional TV manufacturers, retailers and hardware providers, plus new segments like hospitality, airlines and others. Last but not least, Matthew asserts The Trade Desk’s commitment to objectivity means that unlike other TV OS providers, it will never build its own CTV, start its own streaming service nor present at a NewFront. 

Listen to the podcast to learn more (39 minutes, 22 seconds)

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Most media and technology companies have now reported Q1 ’23 results. We dig into who’s up, who’s down and who’s pick ‘em, and where they all might be headed. We share all this with the caveat that one quarter’s results are not the final word on a company’s ability to survive and thrive going forward. We hope we’re not in any way contributing to the short-term, quarterly performance myopia so common on Wall Street.

Rather, we’re looking at these companies’ results in the context of prior results, the competitive landscape and their particular products’/services’ positioning. All while trying to do some basic “pattern recognition” - what have we seen before and how is this likely to play out in TV and video. Our discussion is primarily focused on Netflix, Roku, Amazon, AMC, Disney, Comcast, Vizio, YouTube, The Trade Desk, Paramount, Diamond Sports Group, Tegna, Dish and how they’re sorting themselves in the up, down and pick ‘em categories.

Listen to the podcast to learn more (38 minutes,  50 seconds)

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Sports has long been considered the “firewall” for pay-TV subscriptions, with marquee events carried by must-have broadcast and cable TV networks. But new research from The Trade Desk shows that sports viewership is increasing migrating away from linear TV and toward connected TVs and streaming. In its fourth “Future of TV” report, The Trade Desk found that 57% of Americans watch sports at least once per week, and that of these viewers, 44% are watching outside of linear TV. The number rises to 65% for 18-34 year olds.

The viewership levels underscore the degree to which top tier sports have begun “leaking” out of the traditional broadcast/cable TV world and into streaming, and also the existential threat to pay-TV if a big chunk of sports eventually moves into the streaming realm. Importantly, The Trade Desk found that just 19% of TV viewers are returning to their pre-pandemic sports viewing mode, with 44% of fans saying they’re watching sports outside of linear TV (65% for 18-34 year olds).

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Last Thursday’s Q4 and 2020 earnings reports from The Trade Desk and Roku provide further evidence of connected TV advertising’s surge and also viewers’ significant adoption of streaming video. Because the two companies are heavily invested in connected TV advertising and provide lots of thoughtful insights on their earnings calls (transcripts here and here), their results and sentiments are valuable in gauging the state of the market. Together they provide a holistic picture of the market since The Trade Desk operates on the demand side and Roku on the supply side (primarily).

For some time, The Trade Desk has talked about the rising importance of CTV advertising on its overall business, which continued this quarter with the pandemic accelerating key trends. Founder and CEO Jeff Green said that advertisers’ CTV spending on the platform more than doubled in 2020 (total spend, including CTV, was $4.2 billion with Q4 revenue up 48% to $320 million). Green said “more than 1,000 brands spend at least $100,000 on CTV on our platform” and that “those brands spending more than $1 million on our platform in 2020 more than doubled from a year ago.”

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Data released by ad tech provider The Trade Desk from two separate surveys indicates that cord-cutting could increase dramatically in 2021 and that advertisers are shifting budgets to connected TV (CTV) advertising. The Future of TV survey fielded by YouGov for The Trade Desk found that 27% of U.S. cable TV subscribers plan to cut the cord by the end of 2021, compared to 15% who planned to do so in 2020.

With the rise of streaming, there are more alternatives to pay-TV than ever, creating more incentive for consumers to drop their subscriptions. A 27% rate of cord-cutting in one year would be a significant increase from prior periods and would have major industry implications. By comparison, according to MoffettNathanson’s analysis of cord-cutting as of Q3 ’20, the traditional U.S. pay-TV industry contracted at a year-over-year rate of 7.4%.

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These days there’s no shortage of SVOD services to choose from, with each one seeing to grab a slice of viewers’ monthly spending. And with cord-cutting on the rise, undoubtedly there IS some spending freeing up as viewers cancel their pricey pay-TV services.

But two major industry trends should keep SVOD providers from being overly optimistic about replicating anything close to Netflix’s ad-free hockey stick subscriber growth over the past decade: first, the prevalence of password sharing and second, a tolerance for advertising related to “subscription fatigue” that the proliferation of SVOD services is engendering. New data released this week by Hub Entertainment Research and The Trade Desk underscores the extent of both.

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Looking for confirmation of the outsized rewards of being well-positioned in the booming connected-TV (CTV) ad space? Then look no further than the Q4 ’18 and full year 2018 performance of 3 public companies representing 3 different vantage points on CTV ads - Telaria, The Trade Desk and Roku - all of which reported strong results in the past week, powered at least in part by their CTV success.

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Connected TVs like Roku, Chromecast, Fire TV and others were originally used mainly for watching ad-free SVOD services on the big screen. But as the sheer number of ad-supported premium video apps available on CTVs has exploded, consumption has broadened considerably. All of that viewing is creating a growing volume of highly-desirable CTV ad inventory. Monetization of this inventory is starting to show up in public company financials and is likely to continue for the foreseeable future.

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