The Trade Desk, Inc. (NASDAQ:TTD) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 05:00 pm ET


The Trade Desk, Inc. (NASDAQ:TTD) Q2 2019 Earnings Conference Call - Final Transcript


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Q & A

At this time, we will be conducting the question-and-answer session. [Operator Instructions] Our first question comes from the line of Shyam Patil of Susquehanna International Group. Please proceed with your question.

Shyam Patil

Hey, guys. Congrats on a great quarter. Jeff, I wanted to ask about the Amazon partnership. As you mentioned in your prepared remarks, it seems like it's a big step for the industry. Can you just talk a little bit more about what you think it means for the industry? And I know it's super early, but how do you think about the opportunity for the Trade Desk? Thank you.

Jeff T. Green

Awesome. Thanks, Shyam. So, first let me talk about Amazon just generally before I talk about the deal. So -- and talking about Amazon and what they're up to, a lot of people have asked like what does, what are they doing and what the third-party apps mean and what is Amazon Publishing Services. So, my understanding of Amazon Publishing Services is that -- the primary thing that they're monetizing is Amazon Fire, which is the sticks and the hockey pucks and inside of that, of course, you have Amazon's own app where you watch Amazon Prime Video and then you have Netflix and then you have YouTube. Then you have a lot of third-party apps where there's ads, and they're going into those third-party apps, whether that's Sony Crackle or CBS, or anybody else and saying, we can help you monetize that. And doing it in a very different way, which is why I'm so excited about the deal. And let me talk about what this means for us.

So let me just summarize the deal. So first, Amazon is joining the open Internet in the sense that they're using their ID to make it possible for us to measure what's happening in that ecosystem that I just described, as well as on the rest of the Internet. So, that makes us a measurement that is meaningfully better than what we would get inside of any walled gardens.

Secondly, there'll be more aggressive in economics from what I can tell, then what anybody else has been on the sell-side for Connected TV. And what this does for content owners is, if you rewind two years and you're looking at this through the lens of a content owner, a owner who's 90% of their revenue comes through linear television and the money that you have to divide with somebody like YouTube versus the money you have to divide with an MVPD partner is roughly the same, then you are in no rush to move to digital. In fact, digital just represents risk for you.

But if you make targeting better because of the use of that ID and so you get efficiencies the digital can provide. And then you also get the chance to keep more of a dollar. You get a greater percentage of the deal. It becomes economically irrational to not raise towards digital. So, what I think