‘Panic and confusion’ in the advertising industry

Chris Pash
By Chris Pash | 10 May 2024
Credit: Zan Lazarevic via Unsplash

The Trade Desk, posting market leading revenue growth for the March quarter, sees some panic and confusion in the advertising market.

Jeff Green, founder and CEO, told analysts in a briefing that he’d never seen the industry in such a state of transition. 

“In some corners of our industry, I also sense some panic and confusion about what to do next,” he said.

The global technology platform for buyers of advertising recorded a 28% rise to $491 million in revenue in the three months to March. 

Green noted immediate themes facing advertising. 

“First, there is a broader understanding of the role that walled gardens (as opposed to the open internet) are playing as major purveyors of low-grade made-for-advertising inventory,” he said.  

“Second, there is a much wider understanding of how bad ad-to-content ratios within walled gardens and the brand suitability risk of user-generated content or UGC. This is in part due to the stark contrast that premium content has right now to UGC. 

“The industry has growing awareness that consumers spend most of their quality time with premium content on the open Internet versus the walled gardens. Advertisers are making better use of their first-party data and retail data as they explore contemporary cross-channel alternatives to cookies.

“And lastly, in advertising and marketing, like in many other sectors, there is a broad industry frenzy around AI and what it means for our industry.”

For The Trade Desk, Green said this adds to his conviction about the opportunity in 2024 and the years ahead. 

“Over the last six months or so, I have been spending more and more of my time with CEOs, CMOs, and heads of media companies, helping them make sense of the issues that I just outlined,” he said.

“And the bottom line across all of these discussions, there is consensus that the value is shifting to the open Internet. 

“But perhaps I should be more specific. It's shifting to the best of the open Internet, what we might call the premium Internet. It won't all happen overnight, but it is starting.”

2022 marked the first year in a decade that the majority of digital ad spending took place outside of Meta and Google. 

“But walled gardens still command the bulk of digital advertising spend because those tech giants have made it super easy to reach consumers at mass scale, and the performance results are equally simplified,” said Green.

“Hey, look, your ads did great. We told you so, so it must be true. But that's changing. Advertisers now have scaled alternatives on the open Internet.

“With the proliferation of CTV and retail media, that trend accelerated last year, and I believe the trend will only continue moving forward.

“The role of CTV and digital audio in all of this should not be understated. For many people, movies, TV, and audio consumption is a very important part of their daily lives. It's premium quality content that captivates consumers who spend significant amounts of time engaging with it.”

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