The Trade Desk says YouTube's brand-safety snafu is its gain as brands like McDonald's and AT&T pull ads from the video platform

jeff green

 

  • Ad-tech firm The Trade Desk's revenue soared in 2018 to $477 million, ahead of its guidance of $464 million.
  • Fourth-quarter revenue grew 56% year-over-year to hit $160.6 million.
  • The company's move into streaming TV advertising particularly boosted revenue.

The Trade Desk continues to be an outlier among ad-tech companies that struggling to grow ad revenue as more of those dollars go to Facebook and Google.

The company reported $160.6 million in fourth-quarter 2018 revenue on Thursday, primarily boosted by growth in programmatic ad dollars flowing to connected TV devices and audio.

The programmatic advertising firm reported a total of $477 million in revenue during 2018, up 55% from $308.2 million in 2017. The Trade Desk's technology plugs into agency trading desks to power programmatic advertising.

In 2019, The Trade Desk said that it expects to grow faster than the rest of the programmatic industry, making at least $637 million with gross spending on its platform hitting at least $3.2 billion, said Jeff Green, The Trade Desk's CEO, during the earnings call.

Programmatic firms are making connected TV gains

The Trade Desk saw the biggest growth from connected TV, where spending grew 525% year-over-year. Mobile spend jumped 69%. while programmatic audio spending grew 230%.

During the fourth-quarter, more than 160 advertisers spent more than $100,000 each on connected TV advertising, Green said. In 2018, the company's inventory for streaming TV ads grew sixfold, with the bulk of new inventory coming from networks like NBCUniversal, A+E Networks and CBS that are  building their own streaming services.

Read more: Ad-tech companies and networks are pinning hopes on streaming TV, but OTT is full of headaches for marketers

He added that inventory is also coming from digital players like Hulu, which works with The Trade Desk to power programmatic advertising.

But streaming TV ads are significantly more expensive with higher cost-per-impressions (or CPM) prices than display ads. Over time, prices will come down as more premium content becomes available, Green said. 

"I don't think it will have any big, long-term effect on our fee structure because we add so much more value by bringing data to the table," he said. "Time will tell there but I think we're in a really strong position."

This week, big brands like McDonald's and AT&T pulled their YouTube ads after it was revealed that ads ran alongside videos with inappropriate comments. Asked about what the pushback against YouTube means for The Trade Desk, Green said that he expects to see a short-term increase in spending from big advertisers over the coming weeks.

"There's a bunch of dollars that need to find a new home," he said. "I do think it represents an opportunity for us, but I think it's hard for all those advertisers to move away from YouTube."

China holds a lot of potential

The Trade Desk's move into China was another big topic on the earnings call. The Trade Desk has long eyed Asia as a source for growth and analysts repeatedly asked Green for details on the company's plans, particularly in China. According to Green, 86% of the firm's revenue comes from the US, with the goal to get two-thirds of revenue from international markets.

"The fastest-growing and largest middle class in the history of the world is emerging here in Asia, and global brands want to reach these new consumers," Green said.

Specifically, Green mentioned Alibaba, Baidu and Tencent as critical media partners in Asia. However, the Chinese market is notoriously difficult for marketers to crack. Green emphasized that the country is a "long-term investment."

Because the Chinese companies have been slower to ramp up advertising, Green said that they have a benefit from learning from Facebook, Google and Amazon's measurement mistakes and walled gardens.

"There's actually clearer lines with Baidu, Alibaba and Tencent than there is with Google, Amazon and Facebook, which makes it much easier to have conversations about activating data," he said. "I don't think we're going to have the same debates and evolution that we had in the rest of the world."

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Contributer : Tech Insider https://ift.tt/2U9aca8
The Trade Desk says YouTube's brand-safety snafu is its gain as brands like McDonald's and AT&T pull ads from the video platform The Trade Desk says YouTube's brand-safety snafu is its gain as brands like McDonald's and AT&T pull ads from the video platform Reviewed by mimisabreena on Friday, February 22, 2019 Rating: 5

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