GDPR was supposed to bury ad tech, but The Trade Desk is soaring — and it sees a new opportunity to attack Google

The Trade Desk founder and
CEO Jeff Green.
The Trade
Desk

• The Trade Desk reported revenue of $112.3 million in
  the second quarter of 2018, up 54% year-over-year.
• The ad buying software platform is one of just a few
  successful public ad-tech companies. It continued to facilitate
  advertising spend from big brands during the second quarter of
  2018.
• Even with challenges around the recent rollout of
  Europe’s General Data Protection Regulation, The Trade Desk’s
  revenue in Europe and Asia grew 85%.
• Interestingly, CEO Jeff Green sees a recent move from
  Google to prepare for GDPR as opening a new door of business
  for The Trade Desk.

The programmatic advertising bubble hasn’t burst yet, according
to The Trade Desk’s earnings.

In fact, execs said that recent moves from Google to prepare for
huge consumer data regulations in Europe have opened the door to
bigger revenue potential during the firm’s earnings call on
Thursday.

During the second-quarter, The Trade Desk made
$112.3 million, a 54% increase from $72.8 million during the same
quarter in 2017.

Specifically, the company said its revenue from connected TV
advertising “more than doubled” between the first and second
quarter of 2018. Revenue from mobile meanwhile increased 100%
year-over-year to account for 45% of advertisers’ spend.

The Trade Desk raised its 2018 outlook, and said it expects
full-year revenue to hit $456 million.

“We executed well in one of the most dynamic environments we’ve
seen,” Green said. “We often see a game-changing event or two
impacting the industry in any given year — however in Q2, many
significant events occurred in the industry.”

GDPR hasn’t cut into ad spend yet

One of those areas that Green talked about is the European
Union’s
General Data Protection Regulation that rolled out in May.

The new regulation makes it harder for brands to use data to
serve and measure digital ads without explicit permission from
consumers — but it hasn’t seemed to have a significant impact on
The Trade Desk, Green said.

In fact, the company’s international revenue, which comes from
Asia and Europe, jumped 85%. Within Europe, The Trade Desk
operates in the UK, Spain, Germany and France.

“GDPR did not diminish spend over the quarter,” Green said. “In
fact, the trust we built with our partners and customers was
massive and we even won additional spend because of GDPR.”

Google’s loss could be ad-tech’s win

Green — who often talks about building a platform with
more data than the duopoly of Facebook and Google — spent a
significant portion of time during the call detailing a recent
change to Google’s data policies that could open up the door to
more business.

In April, Google
closed a program that allowed advertisers to use its
DoubleClick ID when using data transfer services. The DoubleClick
ID powered reporting and measurement across
Google properties including YouTube and DoubleClick Campaign
Manager (or DBM).

Essentially, Google’s move made it harder for brands to reconcile
data from campaigns running on Google’s sites with ads elsewhere
on the web.

“Sharing the ID enables third-party reporting to measure Google’s
performance objectively — the ID makes it possible for marketers
to compare YouTube, Google and DMB to the other parts of their
media plan [and] taking this away weakens the value proposition,”
Green said.

According to Green, the move helped Google prepare for GDPR —and
indirectly yielded good news for his company’s business.

“In my view, Google’s decision to remove this ID offering is
driven by their increasing need to remove risk against malicious
data enablement — like what we saw
Cambridge Analytica do with social data,” he said. “The risk
exists because Google at the fundamental level of their business,
transacts in directly and identifiable consumer data — Google
knows so much about billions of consumers because of their core
product, their search engine.”

He went on to explain that The Trade Desk doesn’t use the same
kind of identifiable data “and because we don’t own a search
engine,” the company’s open ID framework allows marketers to
measure their ads in a more apples-to-apples way across websites.

“In our platform, we don’t even house email addresses, let alone
provide hundreds of millions of people with their own email
addresses — our value proposition is strengthened because of
Google’s strategic ID policy change,” Green told investors.

Green went on to take further jabs at Facebook and Google in
explaining The Trade Desk’s growing business that serves TV ads
programmatically.

Because the average consumer today watches TV across multiple
devices and there’s a growing number of so-called skinny bundles
and streaming options, ad-tech companies are gaining access to
more ad inventory that’s flowing into new types of video
distribution.

That makes it harder for one single company to clamp down on the
market — unlike how Facebook and Google dominate the digital
advertising world.

“No single company dominates the market share in TV, so the
industry is unlikely to see a walled-garden approach succeed,” he
said. “The Google and Facebook playbooks for search and social do
not seem applicable when no one can or will ever own as much
market share in TV as Google has in search or Facebook has in
social.”