Welcome to episode No. 10 of AdExchanger Talks, a podcast focused on data-driven marketing. Subscribe here.
During The Trade Desk’s IPO road show, the company met with plenty of skepticism in meetings with more than 100 investment firms. No surprise there, given the market doldrums around ad tech stocks.
“There was a lot of negative sentiment toward ad tech, and there was a lot of pressure on the businesses that came before,” CEO Jeff Green says in the most recent episode of AdExchanger Talks. “And there was definitely a sentiment of, ‘Why are you even doing this?'”
But the company defied those low expectations thanks to its profitability, revenue growth and customer expansion, among other factors.
Today The Trade Desk is valued at $1.1 billion and has $90 million in cash to invest in areas like mobile, TV/video, private deals and international offices. This year it will hang a shingle in Shanghai, Indonesia, Paris and Madrid.
But being public means your customers know your margins. Isn’t that a vulnerability for The Trade Desk?
“It was never our goal to be the cheapest, it was our goal to be the best,” Green says. “The mission I’ve given to our entire team is we have to add more value than we charge. That’s the only way to last at end state. “So instead of having debates over a single percentage point, which is often penny-wise and pound-foolish for the agency, we should instead be having conversations about value. As long as we’re focused on that and our clients are focused on that, we’re confident we can continue to operate with the margins.”
Green likes to use the word “holistic” when talking about the future of media. The company’s efforts to unify TV and video planning will help agencies buy media in a more integrated way, and the advent of header bidding will help media companies sell that way.
“Header bidding is one of the best things that has ever happened to our business,” he said. “All header bidding is a competition. It used to be that we would silo all demand, and that was dumb. We couldn’t create bid density. We couldn’t create competition. Header bidding became a nice and easy technological way to create competition.”
If that comment makes you wonder if The Trade Desk is dreaming of a publisher business, Green is adamant that it will not.
“You have to sufficiently align your interests with clients,” Green said. One of the big flaws with many companies in ad tech is they try to serve too many masters. “You have buy side, sell side and sometimes a bunch of clients in the middle that makes your job way harder. I don’t think any company, whether you’re Google-sized or a mid-sized company, can overcome the level of conflict of interest that many companies in our space have today.”
Also in this episode: Green talks about the future (of programmatic business models, the “programmatic upfront” and the in-house marketer) and how he cultivates “culture” for a company that will need to capture innovation for perhaps decades to come.
This post was syndicated from Ad Exchanger.