Jeff Green on how The Trade Desk’s new OS can improve the CTV ecosystem

Summary

The Current Podcast: Jeff Green on How The Trade Desk’s New OS Can Improve the CTV Ecosystem

Release Date: November 20, 2024

In this enlightening episode of The Current Podcast, hosts Damian Fowler and Ilyse Liffreing engage in a deep and comprehensive conversation with Jeff Green, the founder and CEO of The Trade Desk, a trailblazer in the digital advertising realm. Celebrating its 15th anniversary this month, The Trade Desk has been at the forefront of transforming the advertising landscape, particularly within the Connected TV (CTV) ecosystem. Jeff Green shares invaluable insights into the company's journey, the challenges and opportunities in the ad tech industry, and the groundbreaking introduction of their new operating system, Ventura.

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1. Jeff Green’s Journey and Founding of The Trade Desk

Jeff Green's venture into digital advertising began in 2003 with the establishment of ADECN, an online ad exchange that Microsoft later acquired. This foundational experience positioned him perfectly to recognize and seize further opportunities in the ad tech space.

Jeff Green [01:06]: "The Trade Desk is the first thing I've ever created that was not built to sell."

In 2009, amidst the global financial crisis, Green founded The Trade Desk with the mission to enhance price discovery in advertising—a process akin to that in the equities market. He observed that while digital transactions were revolutionizing other markets by making them more efficient and transparent, the advertising industry still grappled with valuing ads accurately and transacting them efficiently.

Jeff Green [01:42]: "Advertising has really struggled with price discovery. What is this ad worth? And how can I describe it better so that we can transact it more efficiently and assign value to it more easily?"

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2. Evolution of the Advertising Market and Price Discovery

Over the past 15 years, The Trade Desk has made significant strides in making premium content accessible within the open internet ad market. However, Green acknowledges that the industry still has a long way to go in fully solving price discovery challenges.

Jeff Green [03:26]: "We've got a long way to go still as an industry. We're better, we're way better. And we've got some great case studies, if you will, but there's still a lot that has to be done."

He critiques major players like Google for impeding market evolution due to their sheer size and complex acquisitions, such as DoubleClick, which he believes have slowed progress and diverted the industry in unproductive directions.

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3. The Global 100 Publishers Report and the Rise of the Premium Internet

Earlier in the year, The Trade Desk released the Global 100 Publishers Report, sparking significant conversation about the ascendancy of premium content on the open internet. Green explains the intent behind the report was to highlight the evolution from merely monetizing "the crumbs of the Internet" to capitalizing on high-quality media content.

Jeff Green [04:52]: "We wanted to showcase how great the open Internet has become, moving from leftovers to all of the very best parts of media."

He emphasizes that what he terms the "premium Internet" is not a separate entity but the pinnacle of the open Internet, comprising top-tier content like Hollywood movies, acclaimed TV shows, live sports, and quality journalism.

Jeff Green [07:30]: "If you get the most premium part of the open Internet to go in the right direction, the rest of it will follow."

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4. Supply Chain Efficiency and the Introduction of Ventura

One of the episode's focal points is The Trade Desk's new operating system, Ventura, designed to revolutionize the CTV supply chain. Green details how inefficiencies in the current supply chain have hindered profitability and content discovery, especially for emerging content owners amidst escalating streaming wars.

Jeff Green [19:32]: "Ventura is our opportunity to change the overall system. We're uniquely positioned to improve the supply chain of television and CTV."

Ventura aims to streamline the flow of money and data within the CTV ecosystem, thereby enhancing the advertising experience for both publishers and advertisers. This initiative is not just about optimizing operations but also about fostering a healthier, more transparent market where high-quality content can thrive.

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5. Benefits to Publishers, Advertisers, and Consumers

Green articulates how Ventura stands to benefit multiple stakeholders:

• Publishers: More efficient supply chains mean higher profitability and the ability to invest in more quality content. Companies like Disney, Peacock, and Paramount, which are striving for both growth and profitability, can significantly benefit from improved CPMs (Cost Per Mille) and sell-through rates.

  Jeff Green [22:56]: "Nobody benefits more from a more effective supply chain than the content owners."

• Advertisers: A transparent and efficient market empowers advertisers with better price discovery and choice, ensuring their ad spend is more effective and relevant.

  Jeff Green [24:50]: "Advertisers will always win in a more efficient market because there is more supply than there is demand."

• Consumers: Enhanced discovery mechanisms will reduce the time users spend searching for content, while more relevant and fewer ads will improve the overall viewing experience.

  Jeff Green [26:48]: "Consumers will pay less for content, either seeing fewer ads that are more relevant or paying less in dollars for their subscriptions."

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6. Impact of Google’s Antitrust Trial

The discussion also delves into the ramifications of Google's antitrust trial on the ad tech landscape. Green believes that regardless of the trial's outcome, it has catalyzed a necessary shift towards greater market integrity and transparency.

Jeff Green [17:32]: "Google has to change and that ecosystem has to change. And I think it's going to."

He highlights the challenges Google faces in adapting without compromising its market stance, ultimately validating the need for a more equitable open internet.

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7. The Trade Desk’s Principles and Vision for the Future

Green reiterates The Trade Desk's commitment to maintaining an open ecosystem devoid of inventory ownership, ensuring fairness and efficiency. The introduction of Ventura aligns with this vision by promoting a transparent and collaborative marketplace where all parties can thrive without obfuscation.

Jeff Green [30:54]: "We want to create a marketplace that makes content owners thrive, that also makes advertisers do better."

He is optimistic about the industry's ability to adopt a more ecosystem-centric mindset, where mutual benefits drive growth rather than zero-sum competition.

Jeff Green [32:44]: "There are efficiencies to be gained in the market where everybody can benefit. Consumers will have a vibrant, thriving ecosystem."

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8. Conclusion and Final Thoughts

As the conversation wraps up, Green emphasizes the importance of integrity and transparency in fostering a healthy advertising ecosystem. He draws parallels to the global financial crisis, underscoring the necessity of clear value attribution and honest dealings to prevent systemic failures.

Jeff Green [34:08]: "It's about aligning our interests with advertisers, doing better by them, and ensuring the ecosystem thrives with integrity."

Damian Fowler concludes the episode by expressing gratitude for Jeff's insights, highlighting the profound impact of The Trade Desk's initiatives on the future of digital advertising and CTV.

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Key Takeaways:

• Price Discovery: Essential for a transparent and efficient ad market, still an ongoing challenge.
• Ventura Operating System: Aims to streamline the CTV supply chain, benefiting publishers, advertisers, and consumers.
• Premium Internet: The elevation of high-quality content within the open internet, asserting that improving the top-tier content benefits the entire ecosystem.
• Market Integrity: Lessons from Google's antitrust trial reinforce the need for transparency and fairness.
• Ecosystem-Centric Approach: Emphasizing mutual benefits over competitive zero-sum strategies to foster industry-wide growth and sustainability.

Notable Quotes:

• "Advertising has really struggled with price discovery. What is this ad worth?" — Jeff Green [01:42]
• "Nobody benefits more from a more effective supply chain than the content owners." — Jeff Green [22:56]
• "We want to create a marketplace that makes content owners thrive, that also makes advertisers do better." — Jeff Green [30:54]
• "Consumers will pay less for content, either seeing fewer ads that are more relevant or paying less in dollars for their subscriptions." — Jeff Green [26:48]

This episode serves as a crucial exploration of the current challenges and future opportunities within the digital advertising and CTV landscapes. Jeff Green's visionary outlook and The Trade Desk's innovative solutions, particularly Ventura, position the company as a pivotal player in shaping a more efficient, transparent, and equitable ad ecosystem.

Transcript

[A]

I'm Damian Fowler and welcome to this edition of the Current Podcast. This week I'm delighted to be joined by Jeff Green, the founder and chief executive of the Trade Desk, the world's leading independent digital advertising platform. Jeff is a digital ad pioneer who seized the ad tech opportunity back in 2003 when he founded ADECN, an online ad exchange which was later sold to Microsoft. Then in 2009, he founded the Trade Desk, a demand side platform to help clients access and plan ad campaigns on the open Internet. These days that includes everything from the latest Hollywood movies and popular TV shows on streaming platforms to podcasts, live sports and journalism. Of the Trade Desk, Jeff has said this is the first thing I've ever created that was not built to sell. And this month, the company celebrates its 15th anniversary. One note, the current is owned and operated by the Trade Desk. Welcome, Geoff, to the Current Podcast. It's great to have you here finally.

[B]

Thank you. This is way overdue. I'm such a fan and you've had so many amazing guests. I can't believe it's taken this long to happen, but I'm actually really glad we're doing this now. So thank you.

[A]

Yeah. And the time is right. And also it's 15 years since the Trade Desk was founded this month. So I want to ask you on that point when you founded the Trade desk back in 2009. And by the way, I looked this up. In 2009, Sony was still shipping floppy disks, Netflix was shipping DVDs, and here we are today. But I wanted to ask you, what was the opportunity you saw then in 2009?

[B]

First of all, I love that, and thanks for looking that up. I was just thinking, as you were saying, that I don't even know what I would put on a floppy disk.

[A]

No, there are people listening to this who probably don't know what a floppy disk is.

[B]

That's right, Exactly. But in 2009, you know, we were just coming off of the global financial crisis and I was just fascinated by the markets. I was obsessing about the markets themselves and recognizing some of the similarities between advertising and some of the things that were anemic about the equities market at the time, which was most notably price discovery, especially on all the things touching mortgages back then. But advertising has really struggled with price discovery. What is this ad worth? And how can I describe it better so that we can transact it more efficiently and assign value to it more easily? So that's what we saw. And we saw that digital really had the Promise to make it better the same way that it had in equities markets where transacting digitally is more efficient, it's better. And everything moved in that direction simply because when it's more efficient, especially if it's better and cheaper, then it's inevitable. So I just looked at it as it was inevitable that the overall market, everything digital, would be transacted in this way and that there was an opportunity for us to be one of the people that. That won in that evolution. So that's what we saw. And I think most of our premises have come true.

[A]

Yeah. On that point, you know, here we are now, 2024, the end of 2024. The market is very different from the one we described at the beginning. Where are we now?

[B]

Yeah.

[A]

In terms of that price discovery, in terms of the thing that you identified as the need in the marketplace, how far are we from solving that?

[B]

We've got a long way to go still as an industry. We're better. We're way better. And we've got some great case studies, if you will, but there's still a lot that has to be done. The progress that we've made is really in making all of the content available in a market. So 15 years ago, it was really just the leftovers of display. So we had the crumbs of the Internet. Yeah. And now we have all the very best of the Internet available in this overall market. And so that part has gotten much better. The protocols have gotten better, but there are some players, and I believe Google has slowed the progress more than anyone else. And that is largely around just them pursuing self interest while also having massive size and owning DoubleClick, which is an extremely complicated thing for people to understand. But the role that they've played has really slowed down the evolution of the market and then forced some players to behave in ways that are actually pulling us in the wrong direction. So we got a lot of work to do.

[A]

One of the big differences between 2009 and today is the fact that we have an open Internet. We have so much content on the Internet. And earlier this year, the trade desk caused a bit of a stir when it released its first Sellers and Publishers Report to really start a conversation about the rise of the premium Internet. Could you explain a little bit about what the intention was behind releasing this report?

[B]

Yeah. First of all, I love that it created so much controversy, but I was shocked by it. I had no idea that people cared about our opinion that much, especially when it was on such a small thing, which was really about the nature of the ranking. And we did that on purpose. We knew that that added some amount of controversy so that it became easier to talk about. But I didn't realize how upset some people would be. Some of the people on the list, how could I be number nine instead of number six?

[A]

Just to be clear, that was the top 100 publishers on the open web. The global 100.

[B]

Exactly. And so, but really what we were trying to do is show the collection, to show the portfolio and to say, you know, 15 years ago we were all monetizing the crumbs of the Internet. We were the leftovers of display. And this was pre header bidding, this was pre any ctv, not a single impression. CTV was run, run by Programmatic. So we were the leftovers. And now let's look at the way the Internet is monetized. Where you have walled gardens, which are in charge of ugc, and I would say they're in charge of all the cat videos. And then on the other side, you have all the most premium content of the Internet. You have the best of movies, the best of tv, the best of live sports, the best of podcasts, the best of music, the best, the best of journalism. All of that in that top 100 is well represented. And when you look at that, you look at the quality of media, or you compare the open Internet to those walled gardens and cat videos and 14 year olds shooting film with their iPhones. This, it takes two seconds. If you have to choose between the two, I'll take the open Internet. And we have not done a good job as an industry of the open Internet in conveying to advertisers and to content owners to the world how great this collection has become. And so us talking about the Global 100 is really just our effort to showcase how great it has become. To me, it was an amazing moment this year to just take a step back to compare where we were 15 years ago, monetizing the crumbs of the Internet and now monetizing all the very best parts of media, all of it. It's, in a way, it's a dream come true for somebody who started this 15 years ago.

[A]

Yeah, amazing. But the premium Internet is not replacing the open Internet as some might have it. It's just one part of it.

[B]

Yeah, I mean, I kind of, I use this metaphor in a few places because sometimes the right way to think about the formation of a sequence of events is dominoes, where one leads to another, leads to another, leads to another. But other times I think it's better to think of it in terms of bowling pins, where the pin at the very front is a kingpin. And if you get that, if you hit that one in the right spot, everything else takes care of itself. The metaphor is really helpful in understanding the strategic situation you're in. And so in this case, I believe if you get the most premium part of the open Internet to go in the right direction, the rest of it will follow. And so that's part of the reason we highlight what the top 100 are. It's part of the reason why I spend so much time with that, that group of people is that it is the kingpin. It will affect the way the rest of it goes. It is not because the premium Internet is a different thing from the open Internet. It is not that we're trying to ignore the other pins. It is simply that if you get that one right, the rest will. Will benefit, and to some extent, it will take care of itself. So we're focused on the open Internet, always have been, always will be. We believe that's where all the most premium content will go. That's where it is. That's why we're talking about the premium content now. We've got it there. And now I feel a tremendous amount of burden and pressure to make the open Internet efficient enough that it all stays. The very best scenario is to have an efficient, thorough market for the open Internet, not to fragment silo and introduce sort of isolationist tactics. You can see that play out in nations. It doesn't work, but we have to make certain that we create an efficient enough supply chain that everybody stays.

[A]

It's interesting to hear you talk about this marketplace and especially the way you use financial terms. I know the trade desk talks about it being possible for clients to create their own blue lists or something even akin to an etf. Could you talk a little bit more about that analogy and why it's important to think in those terms?

[B]

Yeah, we're sort of getting to where the rubber meets the road in a lot of ways on this. So one of the challenges that the open market has had is that there is, in addition to having all the very best of the open Internet, there's also stuff that you don't want to advertise on. By the way, I think the stuff you don't want to advertise on looks a lot like some of the walled garden content where, you know, I've argued that the worst part of humanity on the Internet is displayed in the comment section of most websites that have them. You know, brands don't necessarily want to be attached to feuding over politics or just some of the awful things that can get posted on the Internet. So often what has happened is some players in the space, especially on the sell side, have sold the fear of the open, open market and then said, hey, come buy with us, because we've got private markets and we've got one to one relationships that are better. And the challenge with that is when you buy the whole market, you get natural diversification, you get lots of power, you get lots of power to choose. If you just pick a specific publisher or a specific path to get to that publisher, which is even more narrow than choosing the specific publisher, then you often lose all the choice. And so we've noticed this pattern that the places where people overpay the most are in those really small markets where you have one to one relationships and you don't know that you could have bought that same inventory a different way. So we look at this and say there has to be something in the middle, which is exactly what ETFs did. Instead of buying every single stock that's publicly listed, buy those that fit certain criteria, whether that's all of tech, or whether that is the s and P500 or whether that's something else, you can buy a collection of the best. And just like ETFs, it would be a mistake to say we are going to introduce one ETF to the world and that will be it. And of course that's not the case. You want to make it so that a variety of people can create them, but we also want to make certain that they're, they're safe and reliable and people understand what they're buying. So we created a series of rules and then gave especially agencies, but all of our partners the power to create their own ETFs, if you will, or their own subset of the open market that is much bigger than any one to one relationships, but is curated from the open market. And I think giving them that power is going to continue to advance the cause of the open Internet.

[A]

And that financial analogy, that way of thinking about the ad market also extends to the way we think about the entire supply chain. Wall street has a degree of efficiency we might like to see in the ad market. Is that fair?

[B]

Absolutely. I mean, that's always what I've been looking at is let's learn from more mature markets. Because then it's not just that I'm trying to make it look like that, it's also that I just believe it's inevitable. I believe the Martin Luther King quote, the moral arc of the universe is long and it bends towards justice. Well, the arc of markets bends towards efficiency, and it's just going to go there. And it's a question of whether you benefit from that or you get run over by it. And we just want to make certain that we don't get run over by it. And we want to bring along as many people as possible because that too is the most efficient way to get there. So really, all we're trying to do is make it so that the supply chain is as effective as possible and that we're enabling price discovery so that people know what they're buying and that the ecosystem gets better.

[A]

You know, and when we talk about the supply chain, it seems some people are kind of intimidated by its complexity. Would you agree with that?

[B]

Absolutely. I think there are so many people that are intimidated by it and more that should be. It is a bit of a mess and partly because it can be. You know, I've sometimes made the analogy in the supply chain of physical goods. Sometimes it's a little bit off the beaten path. We're not quite sure why every container ship in the world touches Singapore shores every 91 days, but you are not seeing something come from a factory in China and then going to the US and then going back to China and then going to the US and then to Singapore and then going to Germany and then heading around and then the product actually get here after it's touched our shore seven times. But I do believe that sometimes happens in the supply chain, especially of display, in the programmatic ecosystem. But we do have to make certain that we're scrutinizing the entire supply chain. And I'm always looking at the success of the biggest names in tech and saying what made them successful, and then also what mistakes did they made and how can I avoid those? But I think one way to summarize Amazon's success is from the very top. Jeff Bezos was obsessed about supply chain. How do we make this as efficient as possible? And there's almost always multiple benefits. It's not just lower prices. It's also what makes possible getting products from a warehouse to our house in a day, which you could argue even more than price. Amazon has won because of speed and efficiency, has lots of benefits. And I'm obsessed with looking at the supply chain and saying, how can we make this better?

[A]

And how likely is it that the ad industry itself can evolve so that there is this sort of focus on delivering more value than the cost extracted? You know, why is it important to have this conversation right now?

[B]

So I believe it's inevitable. So back to that. The arc of economies bends towards efficiency. I think that's inevitable. It's just a question of how many people we brought along. To me, it's a micro question. The macro is not controversial, meaning the market is going to get more efficient. It's just a question of who are the winners and who are the losers. Are you going to resist change or are you going to embrace it? If you're insistent on selling horses and buggies, the car is going to replace you. And if you keep selling that while the car marches on and evolves you, you are going to struggle. And I just think that that mindset of how do we make this better for the whole ecosystem is something that half of the open Internet ad tech players, I think, have. I think there's a lot of winners that will be in there. I think there's a, there's room for so many people to thrive. A trillion dollar industry typically has more players in it than what is currently contained in the Lumascape. Nevertheless, I think about half of those are focused on extraction and saying, hey, the supply chain's too complicated, fixing the system is too hard. I just play in the system that I was given. And by doing that, they're often saying, oh, I'm going to make as much margin as I can while I can, and then I'll pivot when I need to. And that ad network business model or that shortsightedness slows things down and sometimes it gets in the way of price discovery, it gets in the way of efficiency, it slows down the ecosystem. And so much of what we've had to develop over the last 15 years are countermeasures to things that we know are not going to last, but we have to do them nevertheless in order to get to where we're going. So there's a version of this that could have gone a lot faster, but we're interested in making certain that we get there now and that whenever we can. How can we influence the market to be better?

[A]

It seems like sort of things exponentially speeding up a little bit. And one of the things in my mind here is the Google trial a little bit. And that's obviously one of the big pieces of news this year in ad tech. Is it fair to say that that trial and the outcome, whether it goes one way or the other, is, is already forcing a change in the way advertisers and publishers are thinking about supply chain integrity?

[B]

Yeah, I do Believe it's creating a change. It's really interesting, you know, having worked at Microsoft years after their antitrust trial, the ghost of that trial was still there. And I believe that Google has changed forever because of this trial. No matter what happens, it's changed forever. And I think they're in a very interesting predicament, which is that any changes they make to make the market better look like tacit acknowledgement that what they did before was bad. And so they're in this really difficult position of they can't admit they did wrong before without creating existential risk to the company. And so I think they're between a rock and a hard place. And way too many decisions in the past were federated. Where Sundar had this, I think he made a mistake in saying, let's move all the decisions to individual departments and let them act on their own. And then when there was some amount of collusion or some amount of decisions that were made in their independence that weren't good for big Google and weren't good on an antitrust level, then the pendulum swung the other way, where now way too many decisions are escalated to him. And so I think it puts them in a very difficult position to change going forward. But I think in every decision they have to make going forward, they cannot make the market worse. They can't validate what so many people on the open Internet are seeing. And so one good thing that I think has happened from this for the entire open Internet is just the validation that they were right that this wasn't a fair market and that Google has to change and that the ecosystem has to change. And I think it's going to.

[A]

Let's pivot a little bit here and talk about the supply chain for ctv. And I know there's some news this week that the trade desk has just announced about a new operating system called Ventura. Could you tell us about that?

[B]

Yeah. I am so excited to talk about this. I feel like I'm finally sort of coming out after three years of working on this in the Batcave, so to speak. I'm so happy to be talking about it as Ventura, the place where we all started, the place where my kids were born, and to introduce a new streaming operating system to the world. And I believe we're uniquely positioned to. To improve the supply chain of television, of ctv and as a result of fixing the supply chain and the way that money flows, actually improve the TV experience to make certain that the future of television is different. This is one of those amazing benefits of running a company that has seen great success by trying to do the right thing and helping things be better in our ad tech ecosystem. But when you control the way the money flows in a better way, or you influence it in a better way, then it creates an opportunity to improve the overall system. And this is our opportunity to change the overall system. We're so excited that we're finally able to talk about it publicly.

[A]

What was the problem you were trying to solve and why is the trade desk the right company to solve it?

[B]

So first, OEM margins are going to zero. So there's a broken business model in the hardware development of television and most of them are getting into advertising as a result. On the streaming side, there's some serious problems in that. As streaming wars have escalated, the cost of content hasn't gone down, but discovery has become much more difficult. And so if you are a new app, it is much more difficult for content owners. And they need CPMs to go up, they need the ad experience to be good. And if the other operating systems, especially Google and Amazon and a little bit Apple, but mostly Google and Amazon, if those increase the rate of tax, it will make it so that the content generation machines, that they all are very expensive machines, will not be able to thrive the way they have.

[A]

You say three years it's been in the works. What was the spark, what was the genesis, as it were, of the project?

[B]

Well, so during the pandemic it was very clear to see that CTV supply chains also had some concentration and some risk. So as you look across the supply chain, I was seeing that, number one, most of the operating systems that were good are owned by big tech who are also owning content. In particular Google as it relates to YouTube and YouTube TV. But also Amazon, of course, Roku's in the space and does very well and they too have gotten into the content business. But I view them as an independent player that I would like to see do well. But I think that they have some pressures on them and the margin that they made on the hardware itself that makes it hard to compete with Google and Amazon and Apple. And while I want to see them do well, we also want to make certain that there are other independent players that thrive. And I think that puts us in a position to really, to really help the ecosystem. But this all started because we saw the supply chain saw that it was inefficient and saw that we had to ensure that that could be better or else it wouldn't work.

[A]

Let's break it down a little bit. Let's talk about you Know who benefits from this? And let's talk about publishers first off.

[B]

Okay, great. I don't think there's anybody that benefits more from a more effective supply chain than the content owners. So if you look at what's happened, starting with the pandemic where streaming wars really took off and you take a company like Disney who owns cruise ships and theme parks and just so many things, and all their earnings discussion was focused on streaming and they were really being graded for most of the pandemic on what was happening inside of streaming. And as they pivot businesses like ABC and ESPN to a more programmatic world and a streaming world, it becomes very important that they maximize profitability. If you look at the last quarter, companies like Peacock and Paramount are obsessed about profitability. They've got to keep growing, but they've got to be profitable. Even at Disney, one of the big feuds between the Bobs, Bob Chapek and Bob Iger, who's coming back saying not only do we have to focus on growth, but we also have to focus on profitability. All of that means that you have to improve your sell through rate and you have to improve CPMs. And if you add too many ads to the break, you're going to lose subscribers. And it just feels profitability feels fragile. And I would argue that's because the supply chain is relatively inefficient and that there is an opportunity, if you make that more efficient, for content owners to make more. And if they make more, then they can make more content. So the entire ecosystem will benefit. But it has to start with advertisers getting more efficacy and being willing to pay more so that content owners can make more money. And so there's nobody that benefits more from a more efficient supply chain than content owners.

[A]

And then advertisers, of course, advertisers always.

[B]

Win in a more efficient market because what happens is everything gets centered, comes back to a more central market where you have price discovery and you know where your dollar's going and you know how to compare this thing to another thing. Our ecosystem, the programmatic ecosystem, has largely tried to obfuscate at times from buyers what they're buying. Even now, that is still happening all the time. And so an ecosystem where you have a shorter, more transparent supply chain will actually benefit advertisers most when it comes to the advertising, when it comes to sort of the overall ecosystem, I think you can argue content owners benefit most, but the advertisers will always win. And part of the reason they'll win is because There is more supply than there is demand. And that does mean that advertisers are in the power position. They just need better choice and they need ways to figure out how to differentiate one thing from another. And so sellers, as a result, have to get in the business of being better at describing what they're selling. And then all of us have to be really focused on making the supply chain more efficient in order for TV to continue in the golden era that it is, where we're creating content at an unprecedented rate. Consumers have more choice. We all get assignments at every dinner party we go to of stuff that we have to watch.

[A]

So true, so true.

[B]

That will go away if we don't make it possible for them to keep reinvesting in the content machines that they built. And that is a money making exercise.

[A]

As an avid consumer of all these shows myself, I know that sometimes the consumer experience is you can spend 15 minutes trying to find the show you want to watch. And the algos don't always work. How is this helpful for the consumer?

[B]

Yeah, so one of the biggest opportunities as it relates to just features and functionality is actually to improve discovery. Because you're right. Read a study recently that it takes 12 minutes to find something that's about right. Yeah. So if you're a content creator, often you have to wait for them to click multiple times in order to even have an opportunity to present what, you know, they would be interested in. So creating friction to discovery, that sort of friction to make it so that consumers can find the content that they're looking for, has gotten bad. It's gotten worse. And that is mostly made worse because people are exclusively promoting their own content. They're trying to find ways to make their content surfaced above other people's content. And it's because of the way they make money, they're also trying to make this profitable. So as a result, we see this as an opportunity for us to make things better for everybody. But the consumer will improve on discovery. Also, if you get somebody like us in the space where we don't necessarily want to or need to make money on the operating system itself, we just want to make certain that we have a fair scaled market. So if we're willing to do this without making money on the operating system itself, then the ecosystem gets more efficient. And what that means is that consumers will pay less for content. So either they pay less by seeing fewer ads, and those ads, by the way, will also be more relevant because UID 2 will be integrated. It makes it super easy for the ads to become more relevant for them. So they see fewer of them and they're more relevant. But also the bar in terms of the cost because of a more efficient supply chain can make it so that they pay less for content, whether they're paying less in dollars or less in seeing fewer ads. So the consumer gets a much better experience where they have better discovery. In part because we don't own any content, we're objectively helping them find it. And then also by not owning any ads, we reduce the amount of ad loaned. And then of course, by making it so that the take rates in the middle are lower, where often today those operating systems are taxing at a rate higher than what MVP these did. And those distributors were at least selling the content. They were, they were getting consumers to sign up for it instead of, well, you're on an app now, it's your job to go get subscriptions. So I think it's going to help the ecosystem get much more efficient and the ultimate benefactor will be consumers.

[A]

I can't wait to see how it comes to market. And I'm interested to hear from you on the kind of reaction you've been getting from the market.

[B]

It's actually been overwhelmingly positive. And something's happened that I never predicted, which is that as we introduce people to it and we start to describe what I just did, I always hear back from them, oh, wow, here's why you're going to win. And they'll often just kind of look at the same thing because I kind of look at it as a cube. If you look at it from the advertiser perspective, oh wow, that, yeah, that is an upgrade. You look at it from a publisher or content owner perspective. Oh yeah, that is an upgrade. If you look at it from a consumer perspective, oh yeah, that, that is an upgrade. And then we haven't even Talked about the OEMs whose business model has made it so that their margins on TVs are almost zero. And then the world has become so fragmented, the world of OEMs and televisions, that you have a whole bunch of different operating systems and most of those are not very good. And there's not really an incentive for anybody to build one to help them outside of the trade desk. So there's an opportunity for us to give a better business model to companies like the traditional OEMs as well as a better platform to set up advertising. Because all of them, as their margins go to zero, are saying, I need to find another way to make money. And they're all looking at advertising or Derivatives of advertising like ACR to be in a much better position. And I see this as an opportunity for us to both help them while also making the ecosystem better.

[A]

Does this change anything about the principles that the trade desk has always held close in that, you know, it does.

[B]

Not own inventory does not change that at all. And in fact, we spent so much time looking at this one dynamic saying, can it still work if we never own inventory? And it's not even the way that we're negotiating with content owners. What we do is we go in and say we want a fair shake to buy your inventory if we're willing to pay more, which, by the way, is what you should want going back to the streaming wars. If we're willing to pay more, can't we just give us a chance to participate in a fair ecosystem? And really what this is is an effort to make certain that there is a fair ecosystem that we can participate in and that we have the right to buy an ad if we're willing to pay more than others. All we want is a fair shake. As I study the the most successful players in tech, I want to learn from the things that they've done well and then avoid the mistakes that they made before. I think Android was a, was a brilliant strategy for Google and they don't have to make money on that directly. And when they compromise on that and they prioritize the pixel and things like that above it, I think that becomes a mistake. But I think there's an opportunity for the trade desk to create something that is similar to what they did with Android, but also make it possible to create a more fair marketplace, make it possible for other people to win. And how can we learn from the mistakes that were made there so that we create a marketplace that makes content owners thrive, that also makes advertisers do better. And there is no world where advertisers don't do better if the supply chain is improved, which benefits again, both the edges.

[A]

Are you optimistic that people in this marketplace can think more like you, you know, think about the ecosystem rather than their own particular interests in that the ecosystem helps everyone?

[B]

Yeah. So I don't think those things have to be mutually exclusive. So every once in a while people will say, oh, you're doing that because it benefits the trade desk. Well, yeah, but it also benefits you. That doesn't sound like a bad thing to me. So to me, like, there's just two ways of doing business. There's the win win scenarios where you go out and try to find opportunities where Everybody's better off, or multiple people are better off. And then there are those where you have the win, lose. And I actually do think it is a philosophical or a paradigm difference between a number of us on the open Internet, but also just in business in general, where some think if I win, somebody else loses, and if they win, I. I lose. I don't think like that. I just think there are efficiencies to be gained in the market where everybody can benefit. And those are the ones that are easiest to chase because people will work with you, they will benefit from it. So this is one of those cases where I think the overall ecosystem can be better. Consumers will have a vibrant, thriving ecosystem. And there's so much at stake. The best of tv, best of movies, but also things like journalism are at stake. And we've got to make that, that better and efficient in order to survive.

[A]

I love the fact that you've got your eye on this big picture, this legacy of making the open Internet a better, a better place for the world.

[B]

Thank you. Thanks. Yeah, it's what motivates me is to make the system better. I really just want to have impact on the ecosystem. And of course I want that to be positive. It's not about making more money. It was never about the money for us. It was always about if we align our interests with advertisers, we believe we can do better by them. And because they control the money, they fund it all. They're the ones in charge. They fund the ecosystem. And what if we did that in a better way? Not just more efficient, but also with more integrity, what could happen to the ecosystem? And that is actually what, what I see as the risk to the ecosystem today. And it has always been the risk to the ecosystem, which is that if you lie, if people don't know, like back to the global financial crisis, if people didn't know what was on the Citibank balance sheet in 2008, that stock traded at 2$3. The value of Citibank was lower than the price of its buildings. And it was because people don't know what's in it. When we don't disclose what we're buying and selling, it's anemic. And all we have to do is improve price discovery, describe accurately what we have, even if it's bad and the market can cure itself. And that's what's happened in equities markets since then. And Citibank trades it a hell of a lot more today than it did back then. And there's an opportunity for advertising to be so much better than what it is right now, but it's slowed down by those that want to hide and obfuscate, and we have to be scrutinizing that. We have to be trying to avoid it. Otherwise we're part of the problem.

[A]

Well, Jeff, I think that's a great place to stop. It's been a real pleasure talking with you today, and thank you so much for sharing all these insights.

[B]

Thank you. Really appreciate it.

[A]

And that's it for this edition of the Current Podcast. We'll be back in January with a new season of interviews with the world's top marketers. The current podcast theme is by Loving Caliber. The current team includes Cat Vesse and Sydney Kearns. This episode was produced by Nick Gardner and recorded at Native South Studios in Westlake Village, California. The Current is owned and operated by the Trade Desk.

[B]

And remember so really all we're trying to do is make it so that the supply chain is as effective as possible and that we're enabling price discovery so that people know what they're buying and that the ecosystem gets better.

[A]

I'm Damian. See you soon. And if you like what you hear, please subscribe and leave us a review. Also, tune in to our other podcast, the Current Report.