The Trade Desk soars 27% after Q3 earnings

Jeff Green, CEO of The Trade DeskScott Mlyn | CNBCThe Trade Desk stock hit a new 52-week high Friday afternoon, closing up more than 26% after reporting third-quarter earnings Thursday that showed evidence of a rebound of advertising spend on its platform and growth in its connected TV business. The company sells technology that helps brands and agencies reach targeted audiences across media formats and devices, and has a particularly strong presence in the connected TV (CTV) market. It reported revenue of $216 million in the third quarter, up 32%, and said its CTV growth was up more than 100% in the quarter year-over-year. The company had seen a 13% revenue decline in the second quarter as the pandemic had impacted advertising spending. The pandemic-fueled boom in TV streaming has been paying off in a big way for The Trade Desk, which says it’s seen advertisers becoming more deliberate and data-driven with their spending. With more people in their living rooms streaming shows and movies during the pandemic, The Trade Desk saw more opportunities to show them ads on platforms like Disney’s Hulu and ESPN, Sling, Tubi, and Comcast’s NBCUniversal, as well as third-party content on Amazon Fire TV.”As advertisers come under pressure to prove the ROI of their campaigns, to take advantage of the mass consumer shift to streaming TV, and to consider alternatives to user-generated content, our investments in these areas are paying off,” co-founder and CEO Jeff Green said in a statement. Stifel said Friday The Trade Desk appears to be one of the larger winners in the digital media space when it comes to the accelerated move to digital advertising during Covid “given its exposure to CTV advertising, which has meaningfully benefited from cord-cutting/streaming video adoption trends.” Analysts were also positive about The Trade Desk’s work on an initiative called “Unified ID 2.0,” a new approach to online identity to replace third-party cookies. LiveRamp, Criteo and Nielsen have said in recent weeks they’re working with the company on the effort, and the Trade Desk said it will also be announcing publishers and advertisers signing on “shortly.””TTD continues to be the driving force behind UID 2.0, which we expect to replace/improve the targeting/tracking technology that is coming out of the digital ad ecosystem, and we view the likely success of this federated effort as a catalyst for the ad tech group as a whole,” Stephens analysts wrote Friday. “Instead of lording its own proprietary identity tech over publishers, TTD is taking up the mantle in the fight between the open internet and the walled gardens. The Company, and Jeff Green in particular, are standing at the center of a federated effort that we believe will turn out to be a win/win/win/win for advertisers/open-internet tech/ publishers/consumers,” they added. — CNBC’s Michael Bloom contributed to this report.Disclosure: NBCUniversal is the parent company of CNBC.

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