We’re more bullish than ever on this name…

March 25, 2024

Our long-term bullish thesis for TTD is predicated on the fact that consumers watching content are increasingly streaming vs. utilizing traditional linear methods, like cable.

Not only is streaming growing, but ad-supported streaming is on the rise. Just look at Netflix, opting into ad-supported models. By 2028, ad-supported streaming services (including Free Ad-Supported Streaming TV [FAST] and Advertising Video On Demand [AVOD]) are projected to capture 25% share of the streaming market. The money will flow here, and through TTD as a result.

To give scale, forecasts suggest that the worldwide user base for over-the-top (OTT) platforms will expand to 3.71 billion in 2024, with expected global revenues from OTT services reaching $295.40 billion.

TTD benefits due to its position in media buying, enabling brands and agencies to connect to their ideal audience via a wide range of partners (like Disney and AMC) while also leveraging first-party data.

LikeFolio data places TTD at the top of the list when it comes to overall happiness with digital advertising vs. peers large and small at 80% positive -- an impressive level of satisfaction.

External research from Forrester concurs that The Trade Desk leads vs. all other competition measured when it comes to its strategy and offerings for users (against peers like Adobe, Microsoft, Amazon,  and Google).

Part of this satisfaction is attributed to TTD's successful integration of AI via its Kokai platform.

On its last earnings call, the company noted: "Our platform now sees about 15 million advertising impression opportunities per second. And we effectively stack ranked all of those impressions better than anyone else in the world based on probability of performance to any given advertiser, without the bias or conflict of interest that plagued most walled gardens. With UID2, Kokai, and advances in AI in our platform, we now do this more effectively than ever before. And our work in areas such as CTV, retail data, and identity are helping build a new identity and authentication fabric for the open Internet."

On the web site of things, new and returning users to TTD's site are on the rise YoY.

Last quarter TTD shares soared +18% on a strong report and upbeat guidance.

Bottom line: The Trade Desk is a name that we expect to continue to benefit from large scale consumer trends (shift to OTT streaming, AI leverage), ad spend, and best of breed status.

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LikeFolio analyzes social media data to accurately predict shifts in consumer behavior. We sell data and insights to professional investors, corporate research teams, and software providers.
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