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- [00:00]
A
Foreign.
- [00:10]
B
Hello, hello and welcome to another episode of the Digiday Podcast, a show for anybody who's currently wondering what the hell is going on with the Trade desk. Now, I'm Kamiko McCoy, senior marketing reporter here at Digiday.
- [00:21]
A
And I'm Tim Peterson, executive editor of Video and Audio Digital Media. Kamiko, which do you think we've talked about more on the show in the past, let's say, six months? Trade desk or OpenAI?
- [00:37]
B
That's a real good question and a fantastic thing to put a bet on. If somebody was out here listening, I would say they've got to be neck and neck, man. What about you? Where are you placing your bet?
- [00:48]
A
This week we are talking about the Trade Desk on the show. Next week we're planning to talk about OpenAI.
- [00:54]
B
There's just so much going on with them. There's so much news happening at any given time. It's what keeps me up at night at this point.
- [01:02]
A
Yeah, it doesn't keep me up at night. I have other things that I'm worried about. But I'm sure it keeps Jeff Green and Sam Altman up at night.
- [01:13]
B
Oh, I know for a fact. I know for a fact it keeps them up at night. One scroll through LinkedIn and you will see it keeps Jeff bringing up at night 100%.
- [01:22]
A
I mean, there has been a ton going on with the Trade Desk, which is why we wanted to have our executive editor of News Subjoseph and our senior ad tech reporter Ronan Shields on the show this week to not only unpack what all has been going on with the Trade Desk in the past month between agencies pulling out of OpenPath or just recommending clients not spend through the Trade Desk demand side platform at all to executive departures. There's also been changes Trade Desk has been making to its product. Did you catch this story that Sam Bradley and Crystal Scanlan wrote for Digiday last week around some new moves Trade Desk is making?
- [02:07]
B
It's really interesting because what Sam and Crystal wrote is kind of like part of it is, yes, the Trade Desk, but also just a really good commentary on where Programmatic is moving as well, which I'm sure will come up at our Programmatic Marketing Summit that's coming up later this year.
- [02:21]
A
Yeah, because I mean, so much of this seems to come down to less transparency in a lot of areas. Like in that piece they write about how Trade Desk has been testing new automated buying modes with select clients, quote, that streamline campaign management, but roll media data and tech fees into a single price. So Making it a bit harder to unpack those fees. But then I guess one of the modes is buyers will be able to manually manage everything. So maybe that's a bit more transparent, at least a bit more control. But it kind of like you were mentioning, gets at what's been going on with Google's performance Max and Meta's advantage, plus of just these kind of black box ad buying tools in the market.
- [03:11]
B
Yeah. I think the bigger question which we talked about this is like, is it specifically about transparency or is it about control and kind of who gets to be the, you know, who gets to be head honcho here?
- [03:23]
A
Yeah. And that seems to be what's really going on when it comes to the Trade Desk and the ad agencies, Dentsu, WPP and publicists that have been pulling back on spending with the Trade Desk, they're claiming transparency. But as we talk about with 7 Ronin, it seems like it's more about a power move and there's also like some question of profit protections in there.
- [03:49]
B
Oh, for sure, for sure, for sure. I'm really glad that we had 7 Ronin join us to kind of walk us through all what their reporting looks like, because things have gotten real sticky and a tug of war, I think is a good way to describe it.
- [04:02]
A
Absolutely. So here's that conversation with 7Ronin. Sup, Ronan? Welcome back to the show.
- [04:14]
C
Good to be here.
- [04:15]
D
Thanks for having us.
- [04:17]
A
In some ways it feels overdue to have you both on to help Kimiko and I make sense of what's going on with the Trade Desk. Now this time we had this conversation, Kimiko, what, like almost exactly six months ago?
- [04:29]
B
Yeah. It seems like a real good time for a check in. But to your point, when is not a good time for a check in on the Trade Desk?
- [04:36]
A
Because on the one hand, it feels like more of the same in terms of what we talked about, where just all this pressure against the Trade Desk. On the other head, it feels like there's a lot different. Including the leadership at the Trade Desk has undergone some changes. They've also doubled down, it seems like on stances and then agencies, big agencies have taken action. So, Seb, you obviously, as our executive editor of news, oversee all of our coverage. What's been kind of like the tick tock here with what's transpired with the Trade Desk. I don't know if we want to go all the way back to six months ago or even just in the past, what, like six weeks?
- [05:19]
C
Yeah. Where to start, where to start. I think. The best kind of point there is probably really starting on the agency kind of pullback that we've been reporting on for the last couple of months, Ronan, six weeks or so. I think that's a real microcosm of all that ails the trade desk, really. So as it kind of stands, in recent weeks the holdcoast have been pulling spend from the trade desk or at least threatening to most kind of openly. Dentsu and WPP widely reported to have pulled money from openpath over what they describe as kind of hidden fees and a lack of transparency around how their money is being spent through that part of the trade desk buying platform. Essentially that part of the trade desk buying platform is a direct route to kind of publishers. Their stated kind of reason is transparency from what Ronan and I have been kind of reporting. And the kind of mood from those closest to this is that the real reason is control. Right. The more money advertisers spend via the trade desk, directly via their own contracts, trading deals and not the agencies, the less control the agencies have and therefore opportunity to make a margin.
- [06:49]
A
Yeah, because the funny thing to me about all the fees conversation is Kimiko. We were at the JJ Programmatic Marketing Summit with Ronin last May. There was a lot of talk during the behind closed door town halls around the trade desk fees. But it wasn't that the trade desk wasn't being transparent about the fees. It was just that there are so many fees, different fees. Right.
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B
Yeah, that was, I think the, the couple of notes that we had on our like, I don't want to call it the complaint board, but on our right board that was a pretty common theme and my question is always the same, like if there's so much complaint, you know what's to be then done about it. But I wonder if you're starting to see some of the after effects now to your point Seb, about dollars actually starting to move here.
- [07:34]
C
Yeah, I think just sticking with that point for a sec. I think that transparency complaint is definitely real or at least grounded in some truth. Ronan can kind of build on this in a minute given he reported about this, what was it, three, four years ago when the ANA did their last transparency audit. But it's also been weaponized. Right. I think agencies have been the loudest voices for supply chain transparency for kind of years, as we've all reported on. And yet at the same time they run principal media businesses, markup, inventory and operate their own trading desk. So someone I was talking to recently described it really well, they're not transparency absolutionists, they're transparency selectives. They're in favor of it when it exposes someone else's margin. Very much resistant to it when it would expose their own.
- [08:27]
D
Yeah, but look, I think the sort of pullback or the pushback maybe better way of putting it on the trade desk, it's been coming for years. I first started really noticing it when the whole UID they tried to get momentum behind that. I remember WPP in the background being quite vocal about not being happy about having a dsp. Somebody that's traditionally been in their supply chain control quite a big been at that time. Obviously that conversation shifted on quite a bit in the interim. Interim couple of years. But they were saying we're not happy with the supplier having a control of this very big replacement for the cookie effectively. So that's where I first started to pick up on it. And then I think as the markup should desk, you know, during those years the early 2020 started to literally not just surpass them all. I remember doing the math at one point and okay, this is at its very zenith, but the Tridask mark cap outstripped all of the big six combined. So I think that's probably a power dynamic that they didn't feel comfortable with. And then maybe they thought that this was a new platform that they would have to contend with when it comes to control that would rival say the likes of a Google meta. We've already got Amazon. I'm sure that will come up at some point later in the conversation, that rivalry, but I think that's kind of where it is. It was just, yeah, it was almost a bit shifting of the gears in terms of who was controlling the spend and I think maybe this is him trying to push back a little bit. That's my read.
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A
So there's a bit of agencies kind of checking the trade desk's power. At the same time, it seems like the trade desk is still very much exerting its power. Like Ronan, you just reported on some changes it made with how it's working with identity providers like Experian, Liveramp. In terms of previously it was just paying them for data, kind of like all the data that they were able to provide. Now they're going to pay the fees based on incrementality. Basically. If Liveramp and Experian are providing the same entry for someone, then Trade Desk isn't going to pay as much. But if Experian adds additional properties, not just age, gender, but maybe Experian has household income and Liveramp doesn't, or vice versa, then whichever one has that Incremental household income data field gets more money. Are they only getting money if they have that incrementality?
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D
That one's not quite clear just yet, but it is yes to the point they're moving from a volume based model. If the data was used in any way, shape or form, you got to check and now it's to that incremental. It actually has to show what's additive to it. Where this has split opinion is that let's not forget the trade desk has its own ID in the Abrian acquisition they made a couple of years ago. So essentially we've got all those companies who you just mentioned, LiveRamp, Experian, ID5, etc are essentially being pitted in competition with the true desk's own IDs. If it proves incremental in driving conversion, they will get a check. It's something that they've likewise done with the audience unlimited data set product that they had. This is something that I was speaking to some analysts and people who were out in the weeds, so to speak. They were saying this is indicative of how data fees are making up an increasing percentage of the Trade Desk revenues as those media fees get squeezed. I mean this is kind of at the core of the. What's the word? Power struggle. Should we say that we were talking about just now we were talking about the traditional holding companies. So this is another iteration of it, much less in terms of revenue. Sources told me that they reckoned it would be worth tens of millions of revenue a year, which is absolutely nothing to be sniffed at. But obviously when it comes to the greater scheme of things, that's nothing compared to those traditional media dollars. So yeah, to your point, it's indicative of the shifting tectonic plates, I guess
- [13:15]
B
the trade does still. I feel like we had to say this last time and I know Seb's going to jump in here with it at some point to be positive, but they've still got
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A
derisive.
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C
That's not fair to trade their spam.
- [13:35]
A
Seb with his optimism.
- [13:37]
B
Yeah, this is a podcast, a show for curmudgeons. But I think there's something to be said as much as the. The doom and gloom and the negative conversations happen around the trade desk. Right. It's still to your point. Ronan has some weight to throw around, right. And can do a little bit of pushback on its own. I am curious because while all of these things are happening, they've also lost several executives. So how much weight, you know, with losing, Was it their communications officer and a couple of other Top executives.
- [14:09]
A
CMO Matthew Hennick, who is heading up Ventura, which is their connected tv. Do we still call it an operating system? Because it's kind of seemed like they made a sort of pivot with Ventura like a month or two ago. But are these, to Kimiko's point, are these executive departures just bad timing or are they indicative of anything
- [14:35]
D
before? Probably, I don't know, before Seb gets talking about it. Also, we have to remember that it's the comms chief, the Ventura lead and the CMO leaving. But that sort of triple departure came just months after they lost both the CFO and the CRO, which was I believe in November, December 2024. I feel that's important context. They are positioning it as a new guard. And I don't know that was in the official communications, but I don't know if there's anything that you've picked up on in between the lines. Seb.
- [15:14]
C
Not really because it's all just kind of rumor, right? And kind of gossip. Whenever that amount of kind of senior execs leave in sort of relatively quick succession, that is a cause for concern. You know, these are execs that were kind of pivotal to the trade desk's growth, at least up until this point. So, you know, I don't think it's anything to sort of be kind of sniffed at whether or not it actually leads to a kind of new guard, a new phase of growth for the trade, as time will tell. But at least at the moment, you know, we haven't seen any kind of material sort of shift, you know, as a result of these, you know, these replacements being able to sort of impart their kind of own skill set and expertise on, you know, changing the course of the business. So watch this space. But yeah, it's not a good sign is never is. Like two CFOs leaving in five months is a pretty damning indictment of the state of any business.
- [16:16]
A
And it does seem like what's going on with the trade desk is in some ways specific to the trade desk, but mainly just because of the size of the trade desk and the trade desk being independent DSP where it feels indicative of a bigger tug of war that's going on on the buy side where you have with open path trade desk is going direct to publishers and then it's also been know going to work directly with brands and kind of working around agencies. Meanwhile, the supply side platforms that would normally be working with the trade desk are going to work directly with agencies. And similarly agencies are then going instead of working directly with the Trade Desk, going to a pubmatic magnite and working with them directly. So there's this kind of consolidation in the middle of the programmatic supply chain that seems to be happening where it feels like media agencies, especially the agency holding companies and the Trade desk as a DSP are becoming more and more competitive, whereas in the past they would have been collaborative. Is that a fair read on it? Is that an idiotic read on it?
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C
No, I think that's fair like 100%. I wonder how much ill will there would be towards the Trade Desk had it have positioned itself differently, not as the BFF to kind of agencies, not as the antithesis of kind of Google. And so it took a very almost kind of philosophical kind of stance and really leaned really hard into that sort of almost altruistic, sort of benevolent kind of positioning. Because ultimately, right. This is just the fact of what happens when you get to be that big. You have leverage and you use it. Right. Open Path, I think, whilst wildly being kind of talked about as a direct threat to kind of SSPs because it kind of disintermediates them, it is also cutting out agencies out of the path creation business. Right. Whether that's through the preferred SSP deals that they cut the principal inventory kind of positions that they take or even the kind of, to Ronan's earlier point, the data overlays that those agencies kind of bake into all of that. All of those things were different ways the agencies used to sort of make money. Right. By shaping how a dollar moves through the programmatic supply chain. Can't do that with Open Path now. Right. And I think the same thing is happening with and how the Trade Desk has kind of used that to automate a lot of the decisions and expertise that used to justify having human traders in the loop. So I don't think it is just about competing with agencies for margin. I think the trade desk existence and its size also begs the question whether the agency layer in programmatic needs to exist at all.
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B
Yeah, I was going to say is this kind of indicative in your opinion of the Trade desk performance relationship size? Right. Or kind of like ad tech in general?
- [19:32]
C
I think the trade. That Ronan can answer this better, but maybe just to kind of tee it up, I think this is more indicative of its size. Right. You get to that size and you have to move differently.
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D
Yeah, yeah. Just if we would go back for the historical comparisons. It was kind of, you know, when I saw this sort of set up this conversation Tim, that you sent to us I thought it was quite similar how the Trade Desk, it outlasted the likes of Turn and Media Math which were its DSPs when it first like
- [20:07]
A
a decade talking trigger they were, but
- [20:12]
D
they were the ones that were going client direct in the very early stages. And I remember when Media Math, you know, eventually signed, went into administration obviously surrounded under new ownership now. And a lot of people said that was a very critical error and it was a true desk said we were going to stick with agencies. We are just, this is our, this is our constituency, this is our clientele, we advocate for you and you only. And they put themselves in contrast to Google etc. And we know what they do and that was interesting. But one of the things I heard when I was doing some reporting around the fallout with the with publicists was how somebody who had very good knowledge of how the teams operated within there was telling me how when the trade desk started going more aggressively after these JVPs with brands and hocos to work with brands, pardon me, the advertisers Direct, it actually got in the way of how their own internal teams operated. There were some teams that were part of the client direct teams. They were going and making overtures in those directions and the messaging they were putting out apparently was running contra to the teams that were more that were operating in the more established mold of working with, working with resellers and more importantly agencies. And that's what just sort of tactical missteps I guess.
- [21:44]
A
Okay. Yeah. Because it feels like really the power dynamics at play here are either you control budget, which ultimately that's the brands. The agencies don't necessarily control budget, they represent budget or you control inventory which ostensibly would be the publishers, but there's so many publishers in such a long tail that aside from a Google, a meta, an Amazon, maybe some of the big TV and streaming companies, but they don't have enough inventory to really control inventory. It's whoever's representing the inventory which could be the SSPs, could be the DSPs, especially if you have OpenPath, but also could be the agencies if they're going to. To the publishers for principal media deals or going to the SSPs. And so there's like this control around inventory that's playing out between agencies, DSPs, SSPs right now and there's this term, I think it's Carsten Weed. I forget if he wrote this op ed in the current which is the Trade Desk branded content platform, I guess we describe it as or marketecture but where he talked about the unified ad platform kind of if you take the dsp, the ssp, any other PS we want, and kind of just shrink it down into one platform that kind of spans the gamut of the programmatic supply chain. Reading that, it feels like, okay, definitely Trade Us is trying to do that on the DSP side. Definitely seems like Pubmatic Magnite Index would like to do it from the SSP side. But it also feels like the agency holding companies could be in position to be UAPs, unified ad platforms by virtue of just these agentic platforms that they're putting together and the potential for them to have relationships with publishers, with platforms, with the AI platforms. Is that stupid?
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C
No, I think it definitely tracks with some of the conversations that we're having. Tim, Kimiko, Ronan, both, like, at a holocaust level, but also some of the larger independents as well. Everyone is trying to be that sort of orchestration layer. If they can't necessarily be in a position to control budgets directly, they can be the entity, the platform that orchestrates how that gets spent or. Yeah. And so I think we're gonna start to see that really ramp up. I think we're already starting to kind of see it ramp up. Ronan. I know we're looking into some of the stuff that, you know, WPP is kind of actively sort of investigating kind of now, but it feels like in many ways that this is just a. It's a natural evolution of kind of how everyone has been sort of operating over the last, what, three, three, four years? Right. We've been talking about agencies trying to get a better handle on how they can kind of almost shape the amount of traffic and almost kind of curate it, control it, in order to influence who kind of gets what. We've been writing a lot, as you sort of flagged him, about how SSPs have been trying to find ways to use the intel that they have on all of the impressions that are kind of out there and package that up in ways that make it easier for advertisers to buy directly from them. And we've been increasingly kind of hearing about the trade desk specifically, but I think increasingly some of the other larger DSPs, Amazon DB360, to a lesser degree, have been trying to secure access to the best inventory kind of out there. So I don't think.
- [25:37]
A
And also have some of the best.
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C
Yeah, right, right.
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A
DV360 is locked down 100%.
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C
So I don't necessarily know if I fancy the agency's chances in that kind of fight, but I think, you know, that is a big reason why they are Going really hard on the principal media kind of side of things, because you can kind of start to see how. Tim, we talked about this like a few weeks ago, right. But if you become the default way to buy a contingent of some of the best infantry, whether that be kind of sports streaming or whatever, then you can kind of start to see how that could be a compelling proposition to kind of really be the crux of any programmatic play. So interesting kind of times ahead.
- [26:25]
A
Well, especially with the specter of Sasspocalypse and like, it feels like there's been this question in every circle but ad tech circles of like, what's the future? Or what's the role of a DSP or even an SSP in an agentic ad buying market? And I think some of that is probably super overblown. But then there's also probably a ton of legitimacy to it. Like, everything. Every discussion around AI at the moment.
- [26:57]
C
Rena, I know you've been kind of writing about this, but I kind of feel like it's almost a bit too early to kind of come to any conclusion about that stuff yet, because there's still so much that needs to be, like, mapped out. Like, programmatic doesn't even know how it's gonna sort of work in that new sort of paradigm. So to even start to be picking winners and losers in that, like, it just. It feels a bit like a fool's errand. Like, I don't know, Ronan, I don't know if that comes to you in the reporting of people that you're talking to at the moment.
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D
Yeah, well, I mean, one of the things that struck me was that I was at a conference in New York recently, and a lot of it is with the ots, with Jeff Green speaking there. But one of the recurrent themes was a lot of people were saying was, we just don't know. It's a bit too early. It was kind of a non conference conference because it was like, everybody's like,
- [27:49]
A
yeah, this sounds exactly like a conference.
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D
Yeah, everybody's just getting up, going, yeah, we don't know. It would be interesting. Okay.
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A
Early innings, all. All the usual.
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C
Yeah.
- [28:02]
D
Doesn't mean for great copy, that's for sure. So, yeah, I'm just gonna have to aggressively agree, echo the sentiments heard from said conference stage that a lot of people don't know. Sure. There's a lot of land grabs. I'm sure that there's a lot of, I don't want to say backroom dealings, because that's probably a bit too machiavellian. But, you know, there's people trying to cut some deals to make sure it's commercially advantageous to, you know, agree with me.
- [28:37]
B
So ultimately, Sass lives to see another day. And we are indeed ending this show on a positive note.
- [28:45]
A
It's kind of a cliffhanger. It's kind of like we'll see what this episode is in six months when we have seven running back on six
- [28:54]
C
hours, to be fair, judging how quickly things move.
- [29:00]
A
Yeah. And we'll also see Kimiko, you and I will be at the Digital Programmatic Marketing Summit in early May. So that'll be our biannual temperature check with agencies on how things are going with the trade desk, among other ad tech considerations.
- [29:17]
B
Absolutely.
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A
Sup, Brian, thanks for doing this again.
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C
Thanks for having us.
- [29:22]
D
Thanks for having us. Bye.
- [29:30]
A
Thanks for listening to this episode of the Digiday podcast. If you enjoyed it, please leave us a rating and a review on Apple Podcasts, Spotify or wherever you're listening. Get more from Digiday with our daily newsletter sent out each weekday morning. Visit digidair.comnewsletters to sign up.