The Trade Desk, Inc. (NASDAQ:TTD) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 05:00 pm ET


The Trade Desk, Inc. (NASDAQ:TTD) Q3 2019 Earnings Conference Call - Final Transcript


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Jeffrey Terry Green

2020, including major sporting events and the US elections. After multiple years of triple and even quadruple-digit growth in CTV, Q3 year-over-year growth of 145% is definitely one of the biggest bright spots in our business.

CTV is the most strategically important focus of our business going into 2020. We invested early in our CTV infrastructure and in the supplier ecosystem, and we're seeing the pay-off of those investments accelerate. I'll say more about this a bit later, but the growth is not just in CTV. IO spend was up a stunning 162% year-over-year. Like CTV, audio is a large and growing market, about $3 billion according to PwC digital radio estimates. In terms of pure percentage growth, it continues to be one of our fastest-growing channels. Audio is highly attractive to our customers because it regularly delivers high-performance metrics, such as completion rates. We continue to integrate new sources of audio inventory worldwide, and expect to see broader adoption of this channel by advertisers in the years to come.

Music dominates audio today, but I'm just as bullish on other nascent audio opportunities such as podcasting in our future. If you believe as I do that CTV and audio are two of the most effective forms of advertising, because of high audience engagement, this means the TTD is growing fastest in the forms of advertising [Audio cutout]

...into 2020. When we signed many large brands on our platform in the second half of 2017 and 2018, they too began with small campaigns through their agencies. When they saw measurable results, they increased their spend. In some cases, within just two quarters these brands have increased their spend on our platform nearly 800%. These large advertisers were a key factor in driving our 40% year-over-year revenue growth through the first three quarters of 2019. We expect similar results from our new advertisers. Among those existing advertisers who are increasing spend with us, a major auto manufacturer reallocated significant spend to programmatic on our platform, and we one multi-million dollar incremental spend from a global restaurant brand that had previously relied mostly on one of the walled gardens for some of their spend. These dynamics position us very well for continued growth not only in Q4, but also in 2020. We are more confident than ever in our ability to aggressively grow our business more rapidly and profitably than our peers.

As I said, I want to dig a little deeper to provide you more context for that confidence. I believe we are well positioned to take advantage of significant shifts in the advertising industry, which makes us as competitive as anyone for the next advertising dollar. Nowhere is this more apparent than Connected TV. As we have discussed in the past, the nature of TV viewing and TV advertising is changing right before our eyes. This is significant because in many ways TV is the most important frontier in digital advertising.

For many of our customers, such as major CPGs,