The Trade Desk tries to redraw the competitive map with Amazon

To some, that might sound even more outlandish this time round. After all, Amazon is leaning harder on its data and pricing advantages, using partnerships and incentives to pull more ad dollars into its business. So much so in fact that it made $17.7 billion in the last quarter alone. 

And yet, Green spent a noticeable stretch of the call laying out why that expansion doesn’t come at The Trade Desk’s expense.

“This year, they’ll [Amazon] do about seventy billion dollars in advertising,” Green told analysts yesterday. “About ninety percent of that is in Sponsored Listings. It’s competing with Google Search and emerging AI search. We’re not building the Google Search competitor.”

It’s the same tension many marketers have raised this year: when the buying platform also owns the media, conflicts are built in. In response, Amazon has been working with publishers, broadcasters and ad tech vendors to prove its not. The results are still taking shape. 

Green didn’t stop there, though. He then turned to Prime Video, which he said is a “couple billion dollars at most”, to put more clear water between his demand-side platform and Amazon’s. That part of it is more in competition with Netflix, Disney and the rest of the streaming market than The Trade Desk. 

Or as Green put it: “Amazon’s DSP is mostly about buying Prime Video, and very little is buying the open Internet.”

The underlying argument is about positioning. Green wants The Trade Desk to be seen as the neutral allocator of spend across the open web at a time when Amazon is still working to prove that is something broader than a closed media environment.

“In advertising, Amazon first competes with Google then it competes with Netflix and Disney,” said Green on the call. “Very little time and money is competing with us so the reality is we’re playing a very different sandbox.”

He pushed that distinction further by arguing that the future paths of the two DSPs diverge, not converge. He added: “In 10 years, I don’t think Amazon will have a DSP as we define it. I think they will have tools to buy, own and operate, and they will play in advertising the way Facebook does today, and the way that I think Google likely will in the future.”

However the market evolves, Amazon’s scale ensures it will continue to compete aggressively on price. As ever, it treats a competitor’s margin as its opportunity. Green argued that dynamic has limits: if Amazon were to drive its DSP fees to zero, The Trade Desk could benefit – not lose – as marketers look for a neutral point of execution across the rest of the web. 

“I hope they do eventually price it at zero,” he continued on the call. “Doing so will inspire the question ‘is this a trick?’

The trick being that zero-fee DSPs only make sense when the profit comes from somewhere else – owned inventory. The result, in his view, is a fundamental conflict: “DSPs that price near zero, only do that because they’re primarily selling owned-and-operated inventory that has a cost of goods sold of near zero, and that’s where they make the money. 

Whether this sort of framing is enough to convince advertisers to spend more money with The Trade Desk remains to be seen. Or rather enough advertisers because there clearly are some. In the last quarter, it made $739 million, up 18% on the same period a year ago. 

“When we orient the conversation around price, I think it’s a trap for us and the buyers, said Green. “If we orient the conversation around value, we win nearly every time. And I would argue that advertisers are getting smarter and asking tougher questions. We’re helping them navigate in part because we have objectivity. I would argue that no other DSP has that – either they don’t have scale or they don’t have objectivity.”

That may be true but it doesn’t eliminate the reality that Amazon is now competing for the same ad dollars.