"Revenue was up 12% year over year to $689 billion for the three-month period ended March 31, according to an earnings statement, above expectations. However, that represents an over 10 percentage-point drop in the rate of growth from the year-ago period, a deceleration partially attributable to advertisers pulling back due to an uncertain macro environment. Trade Desk's international business is growing at a faster clip than the U.S., but the latter still represents 82% of revenue. Shares tumbled following the report, which also offered cautious Q2 guidance."
"Longer term, the demand-side platform sees itself as structurally equipped for major industry shifts, including an influx of advertising in artificial intelligence chatbots. Executives argued that Trade Desk's focus on open-web advertising provides an advantage over closed ecosystems, or walled gardens, amid the AI boom. CEO Jeff Green drew parallels between the emergence of chatbot advertising and Netflix's journey to integrating ads, where pricey subscriptions eventually needed to be balanced out with more profitable lines of business supported by data."
"OpenAI earlier this week launched an ad server in beta as part of its budding ad push around ChatGPT, and the startup has held talks with Trade Desk around selling ads, The Information previously reported. "It's not unreasonable to think that many of the [large-language models] are going to try to get as much ad monetization as possible," said Green on a Q&A portion of the Q1 earnings call with analysts."
"Green also forecasted that more marketers will prioritize open-web advertising as part of their data-driven tactics and begin to treat walled gardens, i.e. Meta and Google, as the "leftovers." The executive cited two unnamed CMOs who described "chasing cheap reach""
Revenue increased 12% year over year to $689 million in the three months ended March 31, exceeding expectations. Growth decelerated by more than 10 percentage points versus the prior year, with advertisers reducing spend due to an uncertain macro environment. International revenue is expanding faster than U.S. revenue, though the U.S. still accounts for 82% of total revenue. Shares fell after the results and cautious Q2 guidance. Longer term, the demand-side platform expects structural demand from industry shifts, including advertising in AI chatbots. Executives emphasized open-web advertising as an advantage over closed ecosystems, and compared chatbot ad monetization to Netflix’s eventual balance of subscriptions with data-supported ad revenue. The company also expects more marketers to prioritize open-web tactics and treat walled gardens as secondary.
#digital-advertising #programmatic-advertising #demand-side-platforms #ai-chatbot-advertising #open-web-vs-walled-gardens
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