Trade Desk’s strong Q3 underscores key strengths as digital marketing evolves

Dive Brief:

The Trade Desk’s Q3 revenues totaled $628 million, up 27% from the same period last year, per a company announcement. For the first nine months of the year, the company’s consolidated revenues totaled more than $1.7 billion, also 27% higher than the same period last year.
The strong Q3 earnings mark the 11th straight quarter that The Trade Desk has posted a greater than 20% revenue gain. Customer retention for the quarter remained high at greater than 95%.
In a call with analysts, CEO and co-founder Jeff Green pointed to several “tailwinds” that promise continued strength for the company, including growth in the connected television (CTV) sector, robust interest in new identity solutions and new opportunities for using artificial intelligence (AI).

Dive Insight:

The Trade Desk’s earnings reflect some of the ways that digital marketing is evolving, as the company is gaining share in a developing media ecosystem, with gains in connected TV (CTV) and retail media. It is also implementing more AI-based strategies and preparing for whatever the future may hold for Google amid its legal troubles.

In a call with analysts, Green pointed to several “tailwinds” that are working in the company’s favor. First among them was the CTV sector. Already accounting for more than 40% of the company’s business, CTV remained the fastest-growing channel in the third quarter and showed no signs of slowing down. He added that the company has signed more multi-year joint business plans with agencies and brands.

These partnerships have led to wider adoption of new identity and authentication tools, such as Unified ID 2.0 (UID2), EUID, OpenPath and OpenPass, which were developed as Google had planned to deprecate cookies. While Google’s plan has since been abandoned, marketers continue to look for alternative IDs that can address needs around privacy and multichannel marketing. In Trade Desk’s third quarter alone, Spotify plotted new integrations of OpenPath and UID2, Roku adopted UID2 and U.K. company Motorsport Network adopted EUID for its 130 media properties.

Another tailwind Green mentioned was The Trade Desk’s AI strategy. He noted that the company is continuing to hone its AI offering, Kokai, and is looking across its suite of products in search of opportunities for advancement via AI.

Green also noted that while Google’s antitrust trial and future remain up in the air, the mere fact that the company is under scrutiny could present more opportunities for The Trade Desk.

“Whatever the outcome of the trial, I do believe that Google will become more cautious, if not less involved, in the part of their business where they compete with us,” Green said.