The Refresh News: The Trade Desk’s Ventura OS: Disrupting CTV, Monetization, and User Experience

Summary

AdTechGod Pod: Episode Summary

Title: The Refresh News: The Trade Desk’s Ventura OS: Disrupting CTV, Monetization, and User Experience
Release Date: November 20, 2024
Host: AdTechGod
Guests:

• Tony Marlow – CMO of LG Ads
• Scott Ensign – Chief Strategy Officer at Butler Till
• Shiv Gupta – Founder of You of Digital

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Introduction

In this episode of the AdTechGod Pod titled "The Refresh News: The Trade Desk’s Ventura OS: Disrupting CTV, Monetization, and User Experience," host AdTechGod delves into the recent announcement by The Trade Desk regarding their new TV operating system, Ventura. Scheduled for a 2025 launch, Ventura is poised to challenge existing players like Roku, Amazon, and Google by offering an independent platform aimed at reducing conflicts of interest inherent in content ownership. The episode features insightful discussions with industry experts Tony Marlow, Scott Ensign, and Shiv Gupta, exploring the potential impact of Ventura on the Connected TV (CTV) landscape.

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Overview of Ventura OS

AdTechGod opens the discussion by highlighting The Trade Desk's ambitious press release, which emphasizes Ventura's unique positioning as an operating system that diverges from traditional models tied to content ownership. The Trade Desk claims Ventura will address market conflicts by operating independently of major content providers.

• AdTechGod [00:00]: "The Trade Desk is really trying to tackle the conflicts of interests by leveraging an independent type of product outside of content ownership."

Tony Marlow responds by acknowledging the preliminary nature of Ventura's details, noting that essential factors such as hardware integration and user experience need to be addressed before fully understanding Ventura's operating model.

• Tony Marlow [03:03]: "Before you even have the conversation about advertising, you need hardware, software, and a positive user experience."

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Partnerships and Industry Reactions

A significant point of discussion revolves around The Trade Desk's potential partnerships, particularly the hinted collaboration with Sonos.

• Tony Marlow [04:58]: "Patrick Spence over at Sonos... 'we are excited to explore the integration of premium audio and video.'"

Scott Ensign confirms the association, recalling a recent Sonos announcement about partnering with The Trade Desk to power its operating system, which suggests a strategic move towards an "Intel Inside" model where The Trade Desk provides the backend technology.

• Scott Ensign [05:21]: "Trade Desk's first Partner to be the operating system for any hardware is Sonos."

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Impact on the CTV Market

The guests explore how Ventura OS could reshape the CTV ecosystem by introducing more transparency and potentially increasing competition.

• Scott Ensign [07:19]: "Trade Desk's ethos has always been agnostic... but now they're essentially going to be a walled garden of sorts in the DSP space."

Shiv Gupta highlights the complexity of integrating enterprise software like The Trade Desk's with consumer-facing operating systems, emphasizing the challenges in user interface and experience.

• Shiv Gupta [33:03]: "They have built enterprise software, not consumer-facing OS, which is a very different proposition."

Tony Marlow raises concerns about the scalability and market penetration of Ventura OS, questioning whether it can capture significant market share against established players.

• Tony Marlow [23:54]: "There are only long tail opportunities for them... How much opportunity could they realistically rapidly get?"

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Business Models and Revenue Sharing

The conversation delves into the mechanics of potential revenue-sharing models between The Trade Desk, OEMs, and app developers.

• Scott Ensign [15:32]: "When there are two parties involved, like Trade Desk and Sonos, there's an arrangement for divvying up ad inventory or revenue."

Tony Marlow compares Ventura's approach to Roku's licensing strategy, suggesting that The Trade Desk might adopt a similar model by integrating their OS into white-label or lesser-known brands to enhance distribution.

• Tony Marlow [16:30]: "They would essentially reach some sort of rev share or specific dollar amount to get that operating system into TVs."

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Consumer Experience and Innovation

A critical aspect discussed is how Ventura OS could enhance the user experience in CTV by leveraging AI for better content discoverability.

• Tony Marlow [27:43]: "Our data shows around 11 and a half minutes... we're feeling the pressure to increase discoverability."

Shiv Gupta agrees, noting the potential for Ventura OS to streamline content discovery and offer more meaningful measurement across platforms.

• Shiv Gupta [20:13]: "Consumers haven't seen a great experience yet. There's potential for something like an iPhone or Tesla in the CTV space."

Tony Marlow introduces the idea of generative AI in creative ad generation, suggesting that Ventura OS could democratize high-quality ad creation for smaller businesses.

• Tony Marlow [25:04]: "In 2025, one of the surprising big areas of growth for Connected TV will be local and AI-driven creative generation."

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Future Implications and Market Disruption

The guests speculate on the long-term effects of Ventura OS on the advertising technology ecosystem and potential regulatory challenges.

• Shiv Gupta [34:06]: "There's a huge market hungry for better solutions. If Trade Desk does this well, it could positively disrupt the value chain."

AdTechGod expresses concerns about The Trade Desk gaining excessive control over the CTV space, drawing parallels to Google's dominance.

• AdTechGod [37:33]: "They're doing exactly what Google's doing... dominating the demand space and bypassing SSPs."

Shiv Gupta remains optimistic, believing that Ventura OS can provide significant benefits without necessarily leading to monopolistic control, provided The Trade Desk manages growth responsibly.

• Shiv Gupta [40:33]: "There's so much ripe for disruption in the CTV space. If done right, it could benefit all consumer segments."

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Conclusion

The episode concludes with a lightning round of final thoughts, where the guests emphasize the need for The Trade Desk to demonstrate tangible successes and partnerships to validate Ventura OS's potential. They agree that increased competition and innovation are beneficial for the CTV ecosystem, but caution that The Trade Desk must navigate partnerships and market dynamics carefully to avoid replicating the monopolistic pitfalls seen with giants like Google.

• Tony Marlow [43:07]: "I can't say I'm not worried, but I hope for The Trade Desk's responsible growth."
• Scott Ensign [43:14]: "It's good to have more competition, but we'll have to see how Trade Desk navigates this journey."

AdTechGod wraps up the episode by thanking the guests for their insightful contributions, underscoring the significance of The Trade Desk's Ventura OS announcement in shaping the future of advertising technology.

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Key Takeaways

• Ventura OS by The Trade Desk aims to disrupt the CTV market by offering an independent operating system, potentially reducing conflicts of interest associated with content ownership.
• Partnerships, especially with brands like Sonos, are critical for Ventura OS's market penetration, but the exact nature of these collaborations remains unclear.
• Market Impact: While Ventura OS promises increased transparency and monetization opportunities, there are concerns about creating new "walled gardens" within the DSP space.
• Consumer Experience: The integration of AI could significantly enhance content discoverability and user engagement on CTV platforms.
• Business Models: Revenue-sharing and inventory agreements with OEMs and app developers will play a pivotal role in Ventura OS's adoption and success.
• Future Challenges: Regulatory scrutiny and maintaining an open ecosystem are potential hurdles The Trade Desk must navigate to ensure sustainable growth and industry acceptance.

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This episode provides a comprehensive analysis of The Trade Desk's Ventura OS, offering valuable insights into its potential to reshape the CTV and advertising technology landscapes. The discussions underscore both the opportunities and challenges inherent in introducing a new operating system within a highly competitive and established market.

Transcript

[Adtech God]

Welcome to today's episode of the Refresh. Breaking news by Adtech God. The Refresh is where we bring you the latest and greatest news from the advertising industry. Today's episode is sponsored by Azerian. Azerion is one of the world's leading full stack digital advertising partners for 300 plus agencies and more than 2500 brands. Their proprietary platform, Azerian Infinity seamlessly integrates the capabilities of owned and operated dsp, ssp, DMP and ad server technologies to drive incremental performance value and efficiency across the full marketing funnel. Azerian offers custom audience activation, leveraging cookuless identity data and contextual signals to engage users across all digital mediums. Choose between direct or PMP activation paths, leveraging a world class team to deliver top of plan results. Welcome to today's episode of the Refresh. Before we get started I wanted to announce some architecture media announcements. We are super excited for some of the great things that we're doing in the next few months. We have a great video series from the Advertising Forum planned in Las Vegas on January 6 to January 8 called Sweet Sweets and a fantastic happy hour at the Cosmopolitan Hotel and Casino on January 8th. And this is in partnership with Magnite. We also recently announced our very first architecture conference All About Identity that's planned in New York City on March 17th. You can learn more by going to market live.com Tickets are on sale now so that's not why we're here today. So first and foremost thank you to everyone that is here we have Tony Marlow, the CMO of LG ads, Scott Ensign, the Chief Strategy Officer at Butler Till and Shiv Gupta, Founder of you of Digital. Thanks guys for being here and such quick, quick turnaround. So I really appreciate it.

[Tony Marlow]

Thank you for having us.

[Adtech God]

So the reason why we're here today obviously this morning we had the Trade Desk announce their new TV operating system called Ventura, which is expected to launch in 2025. Their press release was great, they did a fantastic job announcing the product, but they have a lot of really strong language and one of them is that this is going to be unlike any other existing OS provider different than Roku and Amazon and Google, and that the Trade Desk is really trying to tackle the conflicts of interests by leveraging an independent type of product outside of content ownership. So I've received a ton of dms. So many I haven't read them all yet. So I'm really happy you guys are here and I can ask you some questions. Tony, I'll kick it off with you. You're an OEM, you work for LG ads, right? Fantastic TVs. I wanted to ask you like, do you actually think that Ventura is like an operating system or do you think they're going to take on this more of an intel inside strategy where maybe like the ad decisioning and the experience is powered by Trade Desk, but not necessarily a standalone operating system?

[Tony Marlow]

Well, I think at this point there's more questions than answers. So I would say before I dive into the specific question, there are some hygiene factors that need to happen before you're even in the CTV ad business. So you need hardware, there needs to be, in this instance, literally a television, there needs to be software. So in this instance they're talking about becoming and releasing this Ventura operating system. And then there needs to be an actual positive user experience without the user. Engaging viewing, watching things, watching ad supported things. There's no ad business at all. So all of those things need to happen more or less in sequence before you even have the conversation about advertising. In terms of is it an intel inside type of a model? From what I understand at this point it seems like they are going for the hardware partner, placing their true operating system inside the hardware partner. But again, probably more questions than answers at this point.

[Adtech God]

Yeah, I find it hard. They didn't announce any partnerships. I read it again this morning right before this recording and I didn't see them mention, you know, we are working with an LG or know a Samsung or someone else.

[Tony Marlow]

So.

[Adtech God]

So they're obviously holding that close if there is a partnership in place. And as you mentioned, I thought maybe.

[Shiv Gupta]

That'S why Tony was here.

[Adtech God]

Oh, that would be awesome. That would be really breaking news.

[Tony Marlow]

Apologies, I don't, I don't have any announcement, but I will say I was reading the, the press release and I found the, the Sonos CEO's quote quite interesting. So Patrick Spence over at Sonos, I won't read it all. I do have it in front of me. He said we are excited to explore the integration of premium audio and video, emphasis and video. Last I checked, Sonos is primarily an audio hardware company. I found that quote on the wire very interesting. Maybe, maybe it's a bit of an Easter egg as to what's going to come.

[Scott Ensign]

I'm pretty sure there was like an article a month or two ago that Sonos announced a TV and that they were partnering with Trade Desk for the Trade Desk to be the os. So like when I actually saw it in the Axios article, I was like, oh yeah, okay, Trade Desk's first Partner to be the operating system for any hardware. It's actually Sonos. So this all checks out. I understand why this quote is in here. Did I misread that like Sonos thing from like a month ago?

[Adtech God]

No, that, that came out. I think it was a, like a, like a leak or something.

[Tony Marlow]

Yeah, it was an unintended announcement. I don't know if it was a leak or a mistake, but it was unintended yet that, that's correct.

[Shiv Gupta]

Yeah.

[Scott Ensign]

So I would imagine like that, you know, where there's smoke, there's fire. Right. Like Sonos is putting out a TV at some point and they already agreed on terms of the trade desk that the trade desk is going to power the operating system. Now also, if I remember that leak correctly, I think it was kind of implying that it was going to be more of an intel inside type of thing where Sonos was actually designing the front end experience for consumers and that the OS and the I guess software that was being provided by the trade desk was more the back end system. And so maybe that, that tells us a little bit about like how this is going to manifest itself in the wild.

[Adtech God]

Could be. I, I remember that article and when it came out and I think that's when the buzz and the stir started kind of swirling in the industry. It is interesting for them to enter into the actual, I guess operating system business. They're a software company so I would think that getting into the hardware business would be really challenging. The logistics on its own are difficult. The scaling of devices in market is really difficult. It's not an easy business to get into. But the software business is really what the trade desk focuses on. So it makes sense for them to try to build a better software. I'm just curious to see how much better it is than the existing solutions in market they have. They make a lot of very strong claims and that kind of takes me to the next question. So the next thing they mentioned in the press release was that this is going to help reduce the conflict of interest in the market and that the Roku's of the world and Amazons of the world seem to have that I tend to lean more towards this may increase the conflict of interest as the biggest connected television real platform in the world. Now getting into the OS world. Shiv, how do you feel about this topic itself?

[Scott Ensign]

Yeah, I think, I mean this is really interesting. I think you know, Trade desk's ethos has always been we are agnostic, right? That's, that's our value prop to the ecosystem. We are the anti walled garden, we are the anti Google, etc. And you know, ironically, them getting into the OS game kind of makes that whole ethos flush down the toilet, for all intents and purposes, on the ad side. Because now they are essentially going to be a walled garden of sorts in the DSP space, in the. In the ad tech space. And so what's interesting to me is they're bringing the ethos maybe over from there into the OS space. And that's like, that's their strategy. They're good at that, they're good at telling that story, they're good at marketing against that narrative. And I think that, like, that makes a ton of sense. And if you think about the CTV market, you know, we can sit here and argue, obviously, Tony, you're from lg. Like, we can sit here and argue whether that narrative actually has any backbone in terms of value, right? But at the end of the day, we know that the narrative can resonate. We've seen it in the DSP space and we know that in the OS space, for all intents and purposes, they're kind of right, that they are the only ish player that would not kind of marry software to hardware to content, etc. Etc. Down the line, right? They would only just be playing the software game. So I think that part of it makes a ton of sense. I think it's going to be fascinating again to see if the narrative actually has enough of a backbone in terms of value. And sometimes that doesn't even matter, right? Like from a marketing perspective, even if the value isn't there, people are like, oh, agnostic good, oh, compromised or walled garden bad. And so I think that's interesting. The last thing I'll say about this, and then I'll shut up, is I think that it's going to be really fascinating in terms of, like, the thing I'm saying about backbone and value. You know, their whole thing that they're saying in the press release with Axios is we want to give more value back to publishers, right? And we wrote about this in our newsletter, like a couple of months ago when the rumor first came out. I think a lot of the OEMs, they have set terms, right? And we've kind of had in TV and CTV and streaming. This has been a legacy business. And there's kind of set terms on carrier agreements, rev share agreements, things like that. Trade Desk has an opportunity to come in and undercut a lot of the traditional OS players, partly because they're a new player in town, they have A whole other business that is very lucrative and it's growing really fast. And so they have the opportunity financially and economically to undercut maybe some of the OEMs in terms of like how much they can give back to publishers. But the other aspect of this that I think is really fascinating is the trade desk has the biggest spigot of ad demand out of any one of these players. Right. And you know, like, obviously I'm not including Amazon and Google in that, but I'm including all the other like OS providers. They have the biggest spigot of demand. And so they are coming at this from a really interesting angle of like, once we turn it on, right, we're going to generate plenty of demand for the ads that we get our hands on. So maybe we have an opportunity to give back more and everybody make more money versus some of the other OEMs, the other OSS in the world that like, frankly, like ads are somewhat new to some of those companies, that they're new to the ad game and their spigot of demand isn't as big and as strong as maybe the trade desks.

[Adtech God]

And that brings me to my next question, which, you know, we have, we have Scott here from Butler Till, so obviously working on the agency side and working with some, you know, top national clients and international clients that he works with. You know, how do you feel about this? Is, do you feel that them owning not only, and I'm not sure if you are a trade desk user or not, but do you feel like them owning the pipes and owning the tech on device, you know, empowers you and gives you more transparency and more reliability or do you feel that that just gives more control and power to, to the D. Yeah.

[Shiv Gupta]

And we do work with the trade desk quite a bit. I think the devil is always in the details. So the how this happens is going to be really important. And when I think about the pros and cons of walled garden versus more open buying environments, I think we often look at those like two binary things as if the only two choices that you have are going all in on a walled garden ecosystem or just like taking your hands off the wheel entirely and letting things, things go wherever they might. So I think if they do this right, there could be a happy medium here for buyers in particular. A lot of what we see on the buy side in terms of challenges with CTV is that stuff doesn't. There's just a huge lack of interoperability. So stuff's not talking one thing is not talking to another and you See that as a consumer too of things like ctv, there's huge problems with things like frequency capping, not to mention getting into like message sequencing or really meaningful measurement. And I think a lot of the stuff that they laid out in the press release is, makes a lot of sense for ctv and application of UID makes a lot of sense. If you're talking about CTV environments where you're always, pretty much always having a signed in environment. And if you do have an open ecosystem that is going to be highly interoperable with a lot of other things, I think there's a huge value proposition there from the buy side and I think it could open up new monetization strategies that I think have been a little bit constrained and limited in CTV because of where the incentives are and how things are set up. And so as a buyer, you know, we go direct with a lot of premium CTV partners, we go through SSPs, we do a lot of curation of our own of CTV and frankly, like the space itself is just from all angles a little bit of a mess right now. It's very much still sorting itself out. I see this as the trade desks attempt to say, well, this is a huge market. Dollars are flowing here, racing here, faster than a lot of the supply can keep up with. And so how do we start to speak order into chaos and control this a little bit in a way that's going to help everyone monetize and of course help the trade desk monetize and capitalize on. On something that's growing so fast.

[Tony Marlow]

Scott, I would just build on that and somewhat disagree with some of what Shiv was just saying before you. But if we merge those things together. So overall I would say it's a savvy move. However, as a marketer, I'm not sure I would have positioned it as a content neutrality play, which is what you were asking about earlier. I could see why they made the decision, sure. There's maybe some angles. I think it's a gross mischaracterization as to how the market works. Because at the end of the day, the nature of CTV is one where the viewer decides what they're going to watch. Oftentimes they decide when they're going to watch, particularly for on demand content and how they're going to watch it. Is it subscription with no ads? Is it ad supported? The user chooses where they navigate to in terms of content and then the ad support follows. And so I know I was mentioning this at the start, but the key thing is going to be distribution. Are there, these TVs with this technology in there, is there enough scale in there? So if I was, if I was the marketer over at Trade Desk, I think at this early stage with so many question marks, I probably would have angled this as a. And this is, Scott, what you were saying, look, we can more seamlessly integrate this into your broader buy. We can add ctv, our own homegrown CTV into everything else you're doing. I probably wouldn't have taken aim at literally everyone else in the market.

[Adtech God]

That brings me to a question about the distribution piece. And then shiv, sorry, I'll hand it over to you right after. Like, how would a trade desk actually partner with an oem? How, how does it work? Is it a percentage of monetization? Is it a rev share? Is it the exclusive rights to something? Because currently like the Roku's of the world take a percentage, right? They take a percentage of the revenue generated. It's in their contractual terms with these publishers. But how would an OS from the Trade Desk that is saying that, you know you'll make your money back, it's worth the investment because you're going to cover your costs and it's written in the press release. How would they work with an oem and what are the potential business partnership aspects to this?

[Tony Marlow]

I could weigh in here, I think. I think this might be useful to hear from everyone, but I would say the brand you mentioned is a good one. It's not an exact correlate, but what makes it really interesting as pertains to the Trade Desk's announcement, is that they're a company that's been facing the death of the dongle. They've needed to diversify, they've needed to get viewers in different ways. So they've taken a licensing approach where they're getting their operating system often into white label or lesser known brands or lower tier brands might be a better way to articulate that. And it seems to be working for them to a certain extent. I think the long term success of it is yet to be seen, but I think that's probably the closest we've seen in the real world in the wild to this. So if the Trade Desk were to follow that type of model, they would essentially reach some sort of, as you alluded to, whether it's rev share, some sort of more specific dollar amount to get that operating system into TVs and dial up that distribution. Without the distribution, there's no business.

[Scott Ensign]

I have a follow up question there, Tony. Maybe, you know, maybe you don't know I guess for the group in general, like, I don't know the answer of whether, like to ad tech God's question. We know that when let's say Roku or LG feature apps on their platform, there's a percentage of the ad inventory or, and, or revenue that you take. Right. As the value exchange there. I believe that's how it's done. Unless it's like a big app like Netflix or something where it's like they negotiate great terms or they don't give anything back. Like, I think what I know is that apps give some piece of their revenue or inventory back to the OEM now when there are two parties involved, I guess, right. Like, are they divvying that up? So if, let's say the OEM is Sonos, right? Just because that's maybe the OEM in play here and the OS is Trade Desk and let's say the app that's sitting on that Sonos TV in somebody's living room is Pluto. Right? Pluto. You know, let's say the percentage is usually around 30%. They're saying Pluto's like, hey, we owe you 30% of our ad inventory because we're going to be on Sonos TVs and on your OS. Does Trade Desk and Sonos then figure out how to divvy that up or is there some other kind of arrangement? And I just don't know. I don't know how this works. I don't know the answer.

[Tony Marlow]

I think I'm going to choose my words carefully because. And the reason is not for protection. It's just there are so many edge cases. I won't talk in total like this is how it works. I'll sort of say how we generally see things working. But there. And it does vary quite a lot. So you can reach an agreement with whether it's an OTT player. You mentioned a couple of the, a couple of the apps there. Maybe there is some sort of inventory share agreement. Maybe it's a rev share agreement or maybe there's. There's simply nothing. Maybe it's a discussion like good luck selling your TV without my app on it. And it can really go across any of, any of those boundaries. But also, don't forget, they're not the only advertising opportunity. So for us within LG TV is the primary fast service is called LG channels. It baked into the TV. In the US there's like 300, more than 300 channels. It's all free, all streamed and there are ads supporting it. But if you are the OS owner. There are also premium native CTV ad units. So when you turn your TV on usually they're in the media and entertainment category. So it might be a movie that's at the cinemas or something that you could stream or an app like download Hulu, that kind of thing. And it's not only that, but that tends to be who leans very heavily into those placements. This is a method of monetization that's not really dependent on the app, not even really dependent on the content and arguably is one of the most lucrative placements because it's where your experience launches. It's always the first impression and so then it goes back to ad tech. God, to your statement earlier. Is it intel inside? Is it a true OS that will make a real difference for how those native ads play out? Real difference. Excuse me, for how those native ads play out.

[Adtech God]

Yeah. And you mentioned, you mentioned something also Tony, that they've been, you know, let's say Roku in particular, who's built in and is the operating system for, can I say tier two TVs, tier three TVs, I'm not sure. But more affordable brands, right? Like it is what it is, right? Like you have a Samsung, you have an lg, you have kind of these top tier players in the market, you have the more cost effective televisions in the market as well. And that makes sense. Like there's an audience for everything, there's a consumer for everything and it's a great strategy and I believe they're doing well. Sonos is actually a very high end audio product and it makes me wonder are they not tapping that affordable market? Are they going after the high end television sets and is that the market they're really going after which would kind of fall in line with the Samsungs and LGs of the world.

[Shiv Gupta]

I mean I would imagine that they're going after as big of a part of the market as they can get. You know, I don't want to. Tony is probably much better equipped to answer this, but I think the TV market is tough. The TV hardware market is a tough, commoditized, highly compet, razor thin margin market where the reason that Tony has a nice gig is that those manufacturers are looking for monetization strategies outside of hardware sales which are infrequent and again very low margin. So I think there's a message in there. If they do this right, this is why I think it's a pretty savvy move if they do this right. There's a message for all parts of the value chain and a real meaningful value proposition for the user. It is. I hate the operating system that I'm using now. It's too siloed. I have to hop around. Discovery is a real pain. I think Roku probably in my view has done the best job of solving that problem, but not perfectly. For the manufacturers, it's a revenue stream and potential to monetize demand that they don't necessarily have access to now. You know, meaning the trade desk, huge demand. Obviously we know what's in it for the trade desk. Finding a destination for all of that demand that's reliable, measurable, scalable, et cetera. And for the buy side, I think that the value proposition as we've talked about is and should be this is a place where you can buy premium CTV content in a reliable way, in a way that gives you access to consistent measurement across apps, across content, across devices. Again, I think in a lot of ways it seems like a little bit of an odd thing and a stretch for them to have a consumer software product operating system. But if you think about what's possible here with this exploding category, I mean, the way CTV is exploding, it's causing market irrationalities that we're all experiencing right now, like CPMs are through the roof in CTV to the degree that it's sending some people back to, you know, screaming back to linear. The safety of linear TV in terms of cost effectiveness. That's how bad it's gotten. I think the trade desk is saying it doesn't have to be this way. Like we could open this up and make this possible. Which of course does more than just monetize current demand. It's a demand generation strategy. At the same time, a better CTV experience for the consumer is going to create more supply, which is going to expand this market in ways that it needs to to keep up with that demand curve.

[Tony Marlow]

Yes, Scott, I completely agree and I might add to it, I think, very astute you said, hey, hardware, low margin business you got, it's a high volume, low margin business. Completely, completely accurate. The margins are on the outside. Now I think the thing, the only thing that I would add, I completely agree with your sentiment is the one thing I would add is that it's going to be a somewhat difficult market to crack. So if you take the top four or five OSes and it depends on whose data you believe, so I'll give you ranges because they're all a little different, but you're anywhere between 75 to 80% of the market share in the US of those top five. And then it starts to get real long tail real quick after that. And so, you know, new entrant, sure. Maybe you could pick up a few points of market share. I agree Sonos is a great brand. I've known and loved them for a long time. I think a lot of, lot of consumers have. Can they deliver the experience? Maybe there's some faith there, but how much opportunity, how, what percentage of the market could they realistically rapidly get? Again, I don't know the answer to that, but if I'm over there at Trade Desk, I'm asking those questions.

[Adtech God]

It also makes me, makes me wonder, you know, pressure builds diamonds and is this what we needed like in the operating system world? Like, did we need this type of pressure across OEMs, across the Roku's, across the LGS and Samsungs in the world to really step back, take a look at the user experience, understand the user experience and have a better user experience? Maybe, maybe we needed someone to come in and disrupt a little bit and say, hey, you know what, we want this and we know that this is going to be the future. We know it's the present and it's only going to grow. We need to change the way the user experiences and improve on it. I don't know, but I feel like a new entrant into the space is usually a good thing because it causes quite a bit of pressure to improve on the existing situation.

[Scott Ensign]

I have more questions than I do have answers. You know, like the other thing I was going to so quick thought on that ATG is I think you're right, a new entrant is good. You know, more competition, better products. I do think like the consumer experience on the software side of this is like very commoditized today. Like I personally have a Roku in my house. I have an LG tv. I'm looking at you, Tony. It's great.

[Tony Marlow]

Love that.

[Scott Ensign]

And then I have a Google TV thing, whatever the heck hell they call their thing, their dongle thing. And honestly, I don't care. Like I don't care which TV I'm on. It all feels the same. Like they all have a menu with little tiles and I scroll through and I pick an app and I watch some stuff, right? So like to me, the consumer side of this is already pretty commoditized. What matters is the back end. And that's what I think Trade Desk is attacking is like publisher monetization, especially right now with the emergence of CTV is hard. It's confusing. It's fragmented to the point that Scott was making. And if Trade Desk can create more value and bring more value to the ecosystem through their spigot of demand through better rev share partnerships with publishers, through consolidation into an omnichannel platform. So CTV is not living on an island anymore and it's part of a larger kind of digital strategy. Well, I think that's, that's positive for everybody. So, like, I like it. I think the one thing we just have to be, like, honest and clear about is the Trade Desk first of all needs to stop saying it's agnostic. Like, that needs to go away. Please stop telling us you're the champions of the open Internet and agnostic and blah, blah, blah, blah, blah, that is dead. Please stop. And that's okay because I think it's a good strategy. And I think the other thing that we need to see right play out is, is Trade Desk going to be able to get traction with OEMs and Tony, to the point you're making? There's only long tail for them to go after right now, right? It's Sony, it's Westinghouse, it's, you know, hisense. It's like these guys and some of those guys are already like, nope, we've got our own thing. Or like, we've already been spoken for. But I think they're gonna have to, like, take little bits and it's gonna take time and they're gonna have to crack and crack and crack away at it. And over time, if they can demonstrate, like, hey, look how much more money Sony is making right now by using our OS versus, you know, this other os and this is our case study. And now, hey, more oss are jumping on board.

[Tony Marlow]

More.

[Scott Ensign]

More os. Like, it's going to be a journey for them. But we're going to have to see that journey play out and we're going to have to see some successes early on for us to know that, like, they have an opportunity here and they can get traction.

[Tony Marlow]

I would agree. And then the only thing, I actually think there's a lot of really astute, accurate things in what you just said. And I think the only thing I would Add goes to ATG's question about pressure and you enter into the market, I would sort of flip that. I actually believe we are already feeling the pressure from the user. The viewer wants an increased experience. Maybe I could do a quiz on you guys. We've got some data, but how long do you think it takes between turning your TV on and this is any brand of tv, you're a CTV User turning it on and landing on the content you're going to watch in the U.S. how many minutes?

[Scott Ensign]

12.

[Shiv Gupta]

It depends a lot on the context because a lot of times I know what I want to watch when I turn on the tv. But if it's like really discovery mode, I would say 10 to 15 minutes probably right on.

[Tony Marlow]

Well, you're both right in there. Our data shows around 11 and a half minutes. Just over actually.

[Scott Ensign]

Oh, I lose. Price is right. I lose by the price.

[Tony Marlow]

What's that? The closest without going over. That's fine.

[Shiv Gupta]

That's right.

[Tony Marlow]

So because of that we're feeling the pressure to increase that discoverability. Right. And so, and we had our big. So the operating system on all modern LG TVs is called WebOS. We had our second ever WebOS summit in Korea earlier in the year and one of the big things that was announced is the future intended integration of AI into discoverability. And I think it's really key because right now that a lot of that discoverability lives at that OTT app level. So it might be, it might be Scott, because you watched A in Netflix, Netflix says you like B, C, D, E and it kind of does the same for Hulu, et cetera, et cetera. What if we fast forward to a world where using AI across the totality of your viewing, whether it's subscription, whether it's free, everything you have access to at that home screen glass level, it says, okay, because of everything you watch, here's some stuff that you have access to that you might like that creates a better user experience that has a lot of knock on effects that are positive for the, for the ultimate advertiser media planner. And I think I'd take. God, you're right. The pressure pushes us to get better and better. I feel until now really it's been the end user that's been driving that pressure. And then Obviously on the B2B side we have OEM competitors as well. But even then, you know, the duplicated reach between us and the other top OEMs is low single digit percent. You either have an LG on the wall or you have a different brand on the wall. You very rarely have both and that's really our business. So I guess that's a long way of saying I do agree that pressure pushes us forward. I just see it more coming from the consumer.

[Shiv Gupta]

I totally agree with that, Tony. And your. I think that's right on. Because yes, Shiv, the people understand the rules of the game right now. How do you do it? There's a lot of kind of sea of sameness in the streaming experience. And you go from your LG, which the old PalmPilot WebOS operating system. I'm nerdy enough to remember that. There you go. I even had an HP tablet that had that operating system on it at one point. Moving from that to Roku to my Vizio tv, it might all feel the same, but I do think you're exactly right. There is room for innovation in the customer experience. How many times a lot of my discovery is happening outside of the TVOs because there's just not great options within it. Like how many Google searches do you you find for best family movies on Netflix, best horror movies on Max or best streaming movies in general? A lot of that discovery could be, as you're saying, Tony, part of the experience. And I think consumers, they haven't seen a great experience yet. They don't know what they don't know. I think the kind of iPhone Tesla of this category is yet to be invented. And if I were the Trade desk, that's what I would be looking to put out there and create some consumer demand for something better.

[Scott Ensign]

Hey Tony, I have a two part question for you if you don't mind.

[Adtech God]

Right on.

[Tony Marlow]

Okay, let's go.

[Scott Ensign]

Part one. Do you guys sell LG inventory through the Trade desk at all today? Through private deals, programmatic guarantee deals, et cetera?

[Tony Marlow]

The way we think about it is just being DSP agnostic. So we do work with the Trade Desk but unlike some of our cohorts, we don't have. We're agnostic. Bring your own DSP is the way we think about it.

[Scott Ensign]

Does this affect that at all?

[Tony Marlow]

I don't think so. I think that we still have a strong partnership. Our most recent announcement with the Trade desk related to UID 2.0, bringing that into our ecosystem. I think unless something really drastically changes in terms of their aspirations and stated aspirations, I think this is a savvy move from the Trade Desk. I think if you're over there, you start to think about how you can capture more of the CTV market. For me, it's not about is it the right move. I really still have questions around how well they can do it. I just, I'm not saying they won't. I just want to see this play out. That's where my mind's at. I hope that's helpful.

[Shiv Gupta]

That's a really good point. It was certainly one of my questions. I mean EdTechGod, you mentioned, obviously the trade desk, they have a decent engineering function over there as part of their company. But what they have built is really enterprise software, not consumer, like a consumer facing operating system on a TV that will go to potentially millions, tens of millions of consumers versus a buying platform for kind of nerdy programmatic people like me. That is a very different proposition. It's a whole different kind of development and UI and testing and product roadmap. So I do think that's a. I'm not saying they can't do it because they obviously have some resources, but it's a bit of a leap for sure.

[Adtech God]

Tony, you mentioned something. You announced your partnership with the Trade desk around UID 2.0. I've received a few messages since yesterday when I saw the website that they had accidentally leaked the headline. So thank you. The current, one of the biggest things was they own the demand, they have the uid, they have open path which they're, you know, obviously putting some pressure on publishers to, to implement and utilize. Now they have an os. And how much of this is control, like control over the CTV space? Is this good for the overall ecosystem? Is this not good for the overall ecosystem? Even though we know that they're not going to get 50 million television sets into the market tomorrow, we know that this is a, a long strategy and implementation of their tech and development. But is this one more step closer to the consumer and one more step of kind of controlling the CTV space? And is that good or bad for the space? And this can really go to anyone.

[Tony Marlow]

I might, I might put one thing out there because I can see, I think Shiv is going to weigh in with some good points on this.

[Adtech God]

But I will say he's ready.

[Tony Marlow]

I could tell, but I was, I was looking at the Trade Desk website earlier today. I think a few of us have just been gathering info, trying to understand what's going on and they had a video, I'm not sure, I think it may have been from their internal all hands yesterday, but there's a video of Jeff Green talking about this and I found it interesting that he went to lengths to emphasize and re emphasize that the Trade Desk's key client is advertisers. He just, he said it multiple times. Our clients are advertisers. Our clients aren't the end users. And I found that very telling. And you know, obviously I'll let the others weigh in here, but for me, I think this, taking them at face value, this just builds on what is already a formidable business. They have built their business on a more open ecosystem than certainly some of the walled garden options. Out there. And I think this just expands that a little. But I don't know, it's still those things. I just need to see adoption before I get worried.

[Scott Ensign]

Yeah, they're moving from, from partner territory into frenemy territory for you guys, right, Tony? So it's like, that's a interesting dynamic that you guys and Samsung and Roku, everyone's now like, having meetings and sure, you guys are gonna have meetings. Like, wait, what's going on here? What? Like, we got to keep an eye on these guys now all of a sudden, because they're our competition. I think it's probably whiplash for Roku because Roku went from having One View and competing directly head to head against the trade desk to saying, like, you know what? This One View thing is too hard. The DSP ecosystem is already kind of spoken. We're just going to focus on our OS and our ACR data and our great inventory and like, that's. That's it. And so we'll partner with the trade desk. And now all of a sudden, whiplash, like up Trade Desk back and competing with you again, you know? So I'm sure that's an interesting conversation over at Roku, but to your point, ad tech, I like. I think that it's. It's good. I think in general, it's good. I think everyone. I think we all agree here, right? Tony, Scott, it seems like you guys generally agree, like, it's good. More competition. They bring a spigot of demand into the ecosystem. You know, more innovation, like more money basically, to help CTV grow. And that's exciting. More money back to the publishers, potentially. All good things. I think the thing that we have to realize is, first of all, to Tony's point, when he heard the Jeff Green all hands, I don't think it's about them appealing to consumers. At the end of the day, that's not the product they're building. They're building the intel inside, I believe, based on the Sonos stuff. They're not building UIs, right. They're not building UX. They're building an OS on just to be the backbone. And so I don't think they care too much about that. And I think they think they can be successful there, probably because of what I said. And Scott, you kind of disagreed with me, which I think is totally fair. But my point was like, I think user experience and CTV is a commodity, at least right now, until the iPad or The Tesla of CTVs comes out. Right now, it's all the same. And so trade Desk, like we don't care. Like it's easy for us to bring a UX to market that just looks and feels like all the other UXes. And so I don't think there's a lot of pressure from that perspective. I think, you know, to Tony's point, we have to see it play out. They have to get the deals in place, they have to start working with some OEMs. And to your point, ad tech, God, like it's good until it's not good. And what I mean by that is like, you know, this is what happened with Google and now this is already happening with the trade desk where it's like, oh, good, good, good, you know, like more data, more money into the ecosystem. Oh wait, hold on.

[Adtech God]

They're right. And I'm getting a lot of that shiv. Like I get a lot of that. I don't know why people come to me like I'm a confessional booth, but I, I get a lot.

[Shiv Gupta]

I wonder why, why do I have all these supplicants?

[Adtech God]

Yeah, they're like, this is, this is, they're doing exactly what Google's doing. They're trying to dominate the CTV space, they're dominating the demand space. They're bypassing all the SSPs. They're going to hurt the SSPs. Now they're going after publishers. They're forcing us on their open path product. They want us to, enforcing us to put uid. And you know, you have to kind of step back and go, okay, like, totally understand, like every company needs to scale and grow their business and they do what they need to do to grow again. I give, unlike many other people, I give Google a lot of credit. Like if you're going to court for being a monopoly, you've really kicked ass. Like you've really done such a good job that you've built up a business that like you've dominated the industry. It's good, but it's also bad. And it makes me wonder like, is that where we're going to be 10 years from now with the trade desk? Maybe, maybe not. Or maybe there's intentions that are happening where they recognize what they're doing and they're going to hold back when they need to. I believe in Jeff and I think he's genuinely a good person and cares about his company and the industry. So I'm hopeful that that's the path he takes.

[Shiv Gupta]

I think they see a market opportunity here and there's just so much. As I look at the CTV space, it's ripe for Disruption at almost every point in the value chain. We can kind of argue the point whether or not the experience is good or commoditized right now. But I think there's all forms of consumers of a product like this that would benefit from them doing it really well. We talk a lot about national advertisers. We deal with a lot of national advertisers who do local media. And so therefore we do a lot of local media. I think options for local media have really degraded over the last couple of decades with the rise of digital. Like a lot of local businesses used to have their local TV reps, their local radio and newspaper reps, and that really has not. I mean, sure, now you're on Google and Facebook, but a lot of the upper funnel, premium sight, sound motion kind of high impact stuff, it hasn't really been replicated in a way that's meaningful. If like, best case scenario, trade desk does this well, they're able to get scale, they're able to really pull a lot of these sources together into something that feels like one thing. I think there's a huge market that's hungry for better solutions. So I think good on them for giving it a try. I don't know if this makes them unable to say they're agnostic. I think like I said at the top, the devil's in the details on that. It's, it depends on how they do it. A large public company is going to pursue their interests. The larger they get and the more interest they have, the heavier that's going to feel to the market. I think they can do this in a way that does not, you know, maybe in 10, 15 years land them in trouble with the FTC.

[Tony Marlow]

I have two things I'd love to add there. One takes me back to what we were talking about up at the front end, but I think we don't know, but we're kind of speculating that it's either OS that's a consistent front end or it'll be an OS with that's kind of decoupled from the front end and the front end will be, you know, created by the respective manufacturer. I worry about that decoupling situation if I'm, if I'm at the trade desk. I worry about it. If it's just so variable and it drives inconsistency and you've just not controlling this user experience or advancing it at the same place at the same pace, excuse me, everywhere, I think that can create issues. So I would be looking at that really carefully. But then Scott Like, I think you're right on with a lot of what you were just saying. In fact, I believe in 2025, one of the surprising big areas of growth for Connected TV will be local and in fact, not even related to today's announcement, but probably helping someone like a trade desk, as well as us and others in the ecosystem. Really, it's AI and the creative generation. Generative AI applied to the creative unit, meaning the ad unit itself, because a lot of folks sort of went into it thinking it was this meta Facebook model where you can just go in, click a few things, and it will build an ad for you. But TV is not like that. Scott, you said sight, sound, motion. If you're a corner store hairdresser in middle America, you don't really have the resources to do that. But now you can create a TV ad, potentially buy that using AI, buy your media programmatically, and then have a dispersed footprint. It opens up the market to the long tail. And that's really not where CTV has been until now. So I think, again, really astute comments. And I think next year we'll open it up not just for who we're talking about, but for everyone.

[Adtech God]

Awesome. That actually brings us to the end of this podcast. Any final words? Tony, Scott, Shiv. Before we sign out, I have two things to say.

[Scott Ensign]

I just have a quick question. Lightning round. Will Trade Desk get access to the ACR data by having the AS the os? Does anybody know?

[Tony Marlow]

I don't think anyone knows outside of their walls, but I would assume so. You don't build the OS without the intent to do that.

[Scott Ensign]

But that's interesting because, like, cookies have been the lifeblood of programmatic. Cookies are going away. Everything's moving towards ctv. I believe ACR is the analogous version of cookies in CTV land. And so they're like, we need all that data, and that's why we're doing this. Okay. My last thing I'll say is, hey, Tony or Scott, Are you guys ad tech God? Either.

[Shiv Gupta]

I can't. I can't say.

[Tony Marlow]

You picked it from my voice, didn't you? I should have. I should have masked it a bit better.

[Adtech God]

Technology is incredible, Shiv. Awesome. I really want to thank you all. Tony, Shiv, Scott. Really appreciate you guys coming on today. This was. This was great. I really, really, really appreciate you guys.