The Trade Desk revenue jumps 32% to record $216M amid digital ad boom

Dive Brief:

The Trade Desk reported a 32% gain in revenue to a record $216 million in the third quarter from a year earlier as marketers continued to shift their media budgets to digital advertising. However, the growth was less than the 38% gain the demand-side platform (DSP) had seen in 2019 as the pandemic dampened demand for advertising, according to an announcement.
In addition to higher spending on digital display ads, The Trade Desk saw spending on connected TV (CTV) more than double, while marketers boosted their digital audio and mobile video budgets 70% from a year earlier. The company forecast revenue of $287 million to $291 million for the fourth quarter, which would be 33%-35% higher than last year.
The Trade Desk also touted the development of Unified ID 2.0, its audience identification technology that doesn't rely on third-party cookies. Measurement company Nielsen, ad-tech company Criteo and data connectivity platform LiveRamp joined the audience tracking initiative during the quarter.

Dive Insight:

The Trade Desk's revenue growth indicates that marketers continue spend more heavily on digital media platforms, including burgeoning channels like CTV, streaming audio and mobile video. While the company's growth rate was strong, the slowing from a year earlier shows the pandemic has still somewhat weighed on demand for media. But if the economy rebounds and media market recovers toward the close of the year and critical holiday period, The Trade Desk's revenue is likely to see stronger growth as advertisers spend more heavily on digital platforms to reach audiences whose consumption of electronic media has swelled.

While CTV is a nascent format, it's rapidly gaining traction as more households connect their TVs directly to the internet and start streaming advertising video-on-demand services like Peacock, Pluto TV, Tubi, Xumo and Hulu's ad-supported tier. Major advertisers on average will ramp up their spending on CTV to $16 million this year, up from $14.8 million in 2019, according to a survey that Advertiser Perceptions conducted for the Interactive Advertising Bureau.

The Trade Desk aims to support digital ad growth as marketers, media companies and ad-tech companies work to develop an audience tracking technology to replace third-party cookies and device identifiers. The company is seeking greater adoption of its Unified ID 2.0 technology to help measure audiences among advertising channels including streaming TV, browsers, mobile, audio, TV apps and devices with a single ID. The move comes as tech giants like Google and Apple respond to growing demands for consumer privacy with steps that will limit the ability for advertisers to access people's online activities.

Google in January announced it would end support for third-party cookies in its Chrome browser by early 2022 unless the media and marketing industries developed another tracking method, while Apple plans to require app makers to seek opt-in consent to track its customers. These steps will likely have a negative effect on advertisers unless they can develop an audience tracking technology that gives consumers greater privacy protections.