Author Topic: TTD - The Trade Desk  (Read 6619 times)

alwaysdrawing

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Re: TTD - The Trade Desk
« Reply #10 on: August 09, 2018, 08:44:52 PM »
alwaysdrawing, thanks for posting on Trade Desk!

Curious how you see existing and developing moat for Trade Desk?

Interesting discussion of consumer surplus on 2q18 call.


The Trade Desk is the best independent DSP, and is positioned for very strong growth alongside the transition to connected TV.   In this type of market, I see only a handful of winners, and TTD is well positioned to be one of them.  Similar to other tech companies, whoever is the best can reap the rewards of the industry (e.g. Google in search, Facebook as a social network, Amazon for e-commerce) as the factors that drive their growth benefit the industry leader more than any competitors because they have better data and more resources. 

The point of "consumer surplus" on the phone is a good one:  The Trade Desk isn't like most ad tech, just out to squeeze a dollar from the system.  They design their platform so that every dollar of revenue generates MORE than that amount of value for the users of their platform.  That extra value is their moat--as long as they provide more than $1 worth of value for each dollar of spend on their tools, they will continue to gain more business.  That in turn spins the flywheel of them generating more spend, improving their data (to be better than competitors), and continuing to invest in more tools to put them further ahead.  As Jeff Green said on the call, they aren't trying to take profits at this point, and they are focusing on growing and improving their value proposition.

Generally, I think the major risk to TTD is Amazon.  Amazon advertising is the fastest growing part of their business, and I suspect that the Amazon AWS model would be a good one to layer a "tax" on the connected TV or general advertising market.  The walled gardens (Google/YouTube, Facebook, Snapchat, etc) are possible threats, however their conflict of interest inherent in controlling both the ad inventory and the ad marketplace ultimately may face pushback from brands over time, as the data to analyze performance is all kept in house. 

TTD's CEO Jeff Green thinks long term the walls come down on the walled gardens.  I'm not so sure for the majors (Google/Facebook/Amazon), however, TTD is growing very quickly without the walled gardens, and if they do open up, there could be a lollapalooza effect.  Riding the industry wave towards connected TV feels like Buffett and ABC/Capital Cities a generation ago.  The writing is on the wall here, and I think The Trade Desk is positioned to do very, very well going forward.

To anyone looking at TTD for the first time, I suggest reading previous earnings call transcripts--they are extremely helpful in understanding the business and navigating the landscape of ad tech.  It's also unmistakable how big Jeff Green and the Trade Desk team feels that this is a big opportunity.  I agree.


alwaysdrawing

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Re: TTD - The Trade Desk
« Reply #11 on: August 26, 2018, 06:12:06 PM »
Some discussion thatís helpful for understanding TTDís business, and the role is DSPs within AdTech tech in Barronís.

https://www.barrons.com/articles/ad-tech-firm-poised-to-surge-50-1534348513

Gregmal

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Re: TTD - The Trade Desk
« Reply #12 on: November 08, 2018, 04:33:53 PM »
https://seekingalpha.com/news/3407602-trade-desk-beats-0_15-beats-revenue

Earnings looked great, yet stock now off $50+ from highs about 6 weeks ago. Just started a small swing position after hours. Would think if there is a bounce candidate, it would be here. This business has a lot going for it, although fundamentally it's incredibly expensive. Looking for a few bucks and then I'll probably be out.

Gregmal

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Re: TTD - The Trade Desk
« Reply #13 on: November 09, 2018, 06:38:36 AM »
Out. Too easy

alwaysdrawing

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Re: TTD - The Trade Desk
« Reply #14 on: November 09, 2018, 06:47:44 AM »
Another quality quarter, with another beat/raise guidance.  Not good enough for the analysts--after hours the stock traded down to $105-108.

The conference call revealed that the company continues to be bullish going into 2019, and views connected TV as a once in a generation opportunity.

https://seekingalpha.com/article/4220235-trade-desks-ttd-ceo-jeff-green-q3-2018-results-earnings-call-transcript?part=single

Some quotes from the call (although the full transcript is worth reading, as it addresses TTD's strategy in Asia, GDPR, Connected TV, Amazon, AppNexus/ATT, etc):

Quote
The largest part of the $700 billion worldwide advertising market is TV estimated at $230 billion according to IDC. But when TV spend is reallocated to web, video, social video, mobile video, and CTV, video content will approach about half of the growing global advertising pot.

While TV has moved to digital, is still in its very early days. We are witnessing a generational shift with a global convergence of the Internet and TV. Within the next 10 years linear TV as we know it today, will be dead. Technology such as 5G are expected to start rolling out in China, Japan and the U.S. very soon.

Quote
you may recall that in Q1, I said the most bullish thing I'm reporting in this report is that inventory for Connected TV went up by a 1000%, went up by 10x. And then the next quarter, I said the most bullish thing that we've said year-to-date, even more bullish than the thing I said last quarter is that our Connected TV spend went up by 1000%. And when I said that, I never anticipated that when we are giving our Q3 results as we just said, that I would once again say that Connected TV spend went up by 10x quarter-over-quarter Q3 2018 over Q3 2017.

Still a long runway here IMO.

Gregmal

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alwaysdrawing

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Re: TTD - The Trade Desk
« Reply #17 on: February 22, 2019, 08:17:51 AM »
Another solid quarter, as the Trade Desk continues to perform well, and ride the wave of the movement to programmatic advertising and Connected TV.  There is still a long runway--Connected TV is just getting started.

For anyone new to the company, the earnings call transcripts are very helpful in understanding the business, as Jeff Green really wants to communicate how the business works, and what he's trying to accomplish. 

https://seekingalpha.com/article/4243202-trade-desk-inc-ttd-ceo-jeffrey-green-q4-2018-results-earnings-call-transcript?part=single

Jeff Green designed the business to work as a partner of advertisers with their fees below the consumer surplus they are providing. That's one reason the company has seen such wide adoption, especially compared to other ad tech, where taking as big of a profit as possible makes it difficult to scale, and doesn't help forge lasting relationships with clients.  Similar to Amazon, the Trade Desk leaves some margin on the table in order to grow and capture goodwill. 

Their AI tools and data add-ons are also both A) powerful drivers of consumer surplus and value to advertisers, and B) a benefit of being the top dog DSP, where their platform can be more powerful than smaller competitors because their data is better, and costs can be spread over a wider base.


glorysk87

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Re: TTD - The Trade Desk
« Reply #18 on: March 08, 2019, 06:22:11 AM »
Very fond of the company, but assuming take rate declines a few points over the next few years, how is there any upside left in this name from here? Assuming gross spend declines to a steady 30%ish growth rate, take rates come down a couple hundred basis points, and EBITDA margins in the low 30's, the company is priced at around 20x 2022 EBITDA. Unless the company performs materially better on at least one of those items, it's hard to imagine there's much juice left in the stock from here. If I'm thinking about it the wrong way I would appreciate any pushback.

gjangal

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Re: TTD - The Trade Desk
« Reply #19 on: March 08, 2019, 06:43:14 AM »
My thesis is that there is a long runway for programmatic ad growth, rate of decline of take rate will be much smaller than the rev growth . Plus itís also a inflation hedge, advertising  over time with increasing ad/marketing spend The risk is that they have to be the a platform
of choice, there will be many ad tech companies but they have to be relevant in the market