Future of TV Briefing: The case for and against The Trade Desk’s CTV platform

The ad tech firm no average Black Friday shopper has ever heard of plans to power smart TV sets next year and take a cut of the CTV platform market away from household names like Amazon, Apple, Roku and Samsung. 

As much as that may sound like a lame April Fool’s Joke, it’s November. So clearly there must be good reason that a company worth $63 billion thinks getting into the CTV platform business is a shrewd move. And that reason has to be better than just what TTD cited in its press release of its CTV platform — named Ventura — solving for “inefficient advertising supply chains, and content conflicts-of-interest,” right? 

Right?

For the sake of TTD’s shareholders, hopefully. What exactly that reason may be, though, has eluded me ever since August when Lowpass broke the news that the ad tech firm was developing its own CTV platform. So let’s use this week’s briefing to try to understand the realistic case for Ventura. But first we’ve got to go over the case against because, well, it feels more obvious.

Case Against

“Powered by your favorite ad tech platform” isn’t much of a sales pitch. 

A Ventura-powered smart TV is likely going to have to be extremely cheap to compete on brick-and-mortar shelves and e-commerce pages. But it’s going to need to cost something for retailers to stock it; otherwise it can go the way of Telly, which has offered free, ad-supported smart TVs but had fallen short of its planned 500,000-large customer base months after launching.

It’s also going to need to be lucrative enough for manufacturers to invest in making smart TV sets running Ventura. Now, TTD could make it worth their while by simply cutting them checks upfront and assuming the ad tech firm will make back that money from ad sales on the sets. It could even offer to share some of that revenue with the manufacturers. But that’s a lot of sets that would need to be sold to accrue enough unique reach for advertisers to redirect their dollars. 

And even then people are going to have to actually use TTD’s CTV platform, as opposed to plugging a streaming dongle from Amazon, Apple, Google or Roku into their Ventura-powered TV. 

To its credit, the ad tech firm acknowledged the importance of having a solid product when citing “frustrating user experiences” as one of the challenges Ventura looks to solve. But at this point, it’s very hard to picture a company — whose primary primary product pipes ads all over the internet and whose revenue is wholly reliant on advertising — creating a CTV platform with a user experience that doesn’t make me want to punch a monkey.

Maybe more importantly, TTD will need to secure distribution deals with all the major streaming services that people expect to watch on a TV screen. That means having to haggle over the types of terms that led to CTV distribution standoffs between Disney, NBCUniversal and WarnerMedia on the publisher side and Amazon and Roku on the platform side. But it also crucially means getting TTD’s biggest nemesis — Google — on board. YouTube is the most-watched streaming service on TV screens, so not carrying it would make Ventura all but dead on arrival. You don’t think Google knows that?

Case For

Imagine if I just left this section blank.

No, for all my skepticism, I actually do think there’s a case to be made for The Trade Desk launching a CTV platform. Or at least, I’m not entirely willing to write Ventura off as CTV’s Quibi. I mean, TTD has already built a multi-billion-dollar business by inserting itself in the middle of existing transactions and creating a cut for itself.

For starters, The Trade Desk operates a very successful programmatic advertising business. If it can convince its base of ad buyers to continue to trust the DSP they gravitate to for its independence as that DSP starts aggregating more of its own inventory to sell, then TTD has the means to incentivize ad-supported streamers to take a flier on Ventura (so long as the platform’s underlying technology doesn’t require major code rewrites precluding companies from effectively porting one of their existing CTV apps onto Ventura). The company has already demonstrated that, to a degree, by getting (primarily ad sales) executives from Disney, Paramount and Fox’s Tubi to cheer its Ventura announcement.

That advertiser base would also give TTD the means of making Ventura financially attractive to TV makers and ultimately the people who would need to bring Ventura-powered TVs into their homes. Whether that means giving away the platform for free to manufacturers or the TVs themselves for free to consumers is anyone’s guess, but ultimately financial considerations are the primary concern, and thanks to its DSP, TTD has ties to the top of the food chain in an increasingly ad-supported market. 

Second, TTD is right about the average CTV user experience being fairly frustrating. Content discovery is a challenge. I have no idea what TTD expects to be able to do about that that Amazon, Apple, Google, LG, Roku, Samsung and Vizio have failed to deliver on. But at least it has identified an accurate opening. Points for that.

However, maybe TTD isn’t actually looking to rival Amazon et. al in the consumer CTV market. Maybe Ventura is a bid to corner what one person in my inbox has dubbed the CTV out-of-home market, i.e. the TVs you may (or may not) have noticed in airport terminals, at gas station pumps and crucially inside bars and restaurants. In this case, Ventura’s target customer wouldn’t be someone looking for a big screen at a bargain; it’s other businesses looking to make a buck. 

Consider that, of the 22.1 million viewers that streamed an NFL playoff game on Peacock in January, 3.1 million watched away from their homes, i.e. in bars and restaurants, according to Nielsen. That’s not an insignificant audience size. 

If TTD can use its existing advertiser base to dangle rev-share arrangements to incentivize bars, restaurants and similar businesses to put up Ventura-powered TVs in front of crowds coming to watch the big game, it could use that foothold to pitch advertisers on getting a better idea of where their ads are running and to pitch streaming services on giving up their ad inventory. It’s not a traditional CTV business, but it could be good business nonetheless.

What we’ve heard

“A well-funded start-up.”

— Mark Lazarus’s reported description of a company comprised of cable TV networks that Comcast is spinning of and which he will lead as CEO

Numbers to know

$7 billion: The total revenue generated between Oct. 1, 2023, and Sept. 30, 2024, by the cable TV networks Comcast is spinning off.

$500 million: How much Mediaocean is paying to acquire connected TV ad tech provider Innovid.

82%: Percentage share of live-streaming watch hours that Twitch accounted for the in the third quarter of 2024.

$46: New monthly base subscription price for Sling TV’s streaming pay-TV service.

What we’ve covered

Queries mount as The Trade Desk takes an unprecedented step into TV’s adland:

• It’s unclear how the ad tech firm will convince smart TV manufacturers to use its CTV platform versus those from established competitors like Amazon, Google and Roku.
• How TTD may control programmatic sales on its CTV platform is another question.

Read more about the industry’s reaction to TTD’s CTV plans here.

The Trade Desk finally confirms it’s building a CTV platform:

• The ad tech firm plans to roll out a CTV operating system next year, headed by Matthew Henick, whose previous stints including running BuzzFeed’s entertainment studio and Facebook’s video content strategy.
• TTD does not plan to make its own smart TV hardware but instead license its platform to existing manufacturers.

Read more about TTD’s CTV plans here.

What we’re reading

Will Comcast kick off a new kind of cord-cutting?:

The pay-TV provider’s decision to spin off most of its cable TV networks advances on the write-downs that Paramount and Warner Bros. Discovery took on their cable TV businesses, and now the question is who actually wants to be in the cable TV business, according to Business Insider.

The DSP-owned CTV platform:

With two of the dominant demand-side platform owners — Google and Amazon — operating CTV platforms of their own, I guess it makes sense for a rival DSP to worry enough about being elbowed out for it to attempt to bring its own CTV platform to market, as Axios reported.

Major League Baseball’s streaming rights sale:

In advance of the league’s existing TV rights deals expiring in 2028, MLB plans to have packages of nationally televised games available for streaming services to bid on, according to The Athletic.

Streaming advertising’s long tail:

Streaming ad sellers are taking a page from Google’s and Facebook’s playbooks and have rolled out self-serve ad buying tools to make their inventory more accessible to the legions of small- and mid-sized advertisers who may have small budgets individually but who spend a lot in aggregate, according to Ad Age.

DirecTV exits Dish deal:

The satellite pay-TV providers’ shotgun wedding has been called off after the two sides failed to sell Dish’s creditors on the deal’s terms, according to The Desk.