Advertising bounces back and Trade Desk continues to rise
Advertising is based on one thing: happiness… And you know what happiness is?
It’s the smell of a fresh newsletter.
It’s the discovery of a fast-growth stock.
It’s an article written about advertising technology (adtech).
Ad tech giant, Trade Desk ($TTD) emerged out of COVID as an unlikely winner — tripling in value in 2020.
On Nov. 6, Trade Desk continued its streak by releasing spectacular third-quarter results that sent its stock up over 26%.
Don Draper won’t survive in the modern advertising world
Back in the Mad Men days, advertisers would allocate their ad budget using handshake deals. Today, the majority of advertising is handled virtually — using ad tech.
Companies like Trade Desk powers the complex ad network — bidding system between advertisers and publishers — to deliver ads to you. You can thank them for all the ads you see.
COVID was the adpocalypse that never happened. According to data from The World Advertising Research Center, the global ad market was expected to fall by 8.1% in 2020. Despite falling ad sales in the first half of 2020, the industry recovered just as quickly as it fell.
Netflix won’t save you from ads on TV
The move from cable TV to streaming created a new market — connected TV (CTV) advertising. In 2019, the industry was expected to grow 38% to a $7b industry and surpass $10b by 2021.
Trade Desk, who has a strong presence in the CTV advertising industry, benefited from a surge in TV streaming during COVID — reflected in its third-quarter results:
- Total revenue had grown over 32% compared to the same period last year
- Ad sales from CTV grew over 100% compared to the same period last year
For investors… Love-hate ad relationship
Bad for consumers… Hate ads following your every move on the internet? Well, Trade Desk is developing technology that’ll allow ads to follow you between your TV and other devices.
Good for investors… Trade Desk’s new technology, Unified ID 2.0, will allow advertisers to send more targeted connected TV ads and better track their performance (i.e. return on ad spend) — which could attract more advertisers and increase its ad sales.
The company had a record quarter but better tech and strong CTV growth could continue to benefit its stock.