How The Trade Desk faces growing challenges amid rising competition

For years, The Trade Desk was the premier platform, raking in enough spend to account for 33 consecutive quarters of meeting or beating expectations. Slowly, things started to change. Disgruntled media agency whispers around fees reached a fever pitch. Kokai, its AI-driven data platform upgrade, lost hype. Walmart split, ending the exclusive part of its partnership with The Trade Desk.

Meanwhile, it seems Google and Amazon are looking to fill in any gaps The Trade Desk may leave open. 

“There was never any doubt that Amazon and Google were going to make a play for that part of the market with their DSPs,” said Seb Joseph, Digiday executive editor of news, on a recent episode of the Digiday Podcast. “It was just a question of when.”

In this episode of the Digiday Podcast, Joseph and senior reporter of advertising technology Ronan Shields, join co-hosts Kimeko McCoy and Tim Peterson, to discuss the rise of The Trade Desk and the likelihood it’ll continue to hold its own in a changing DSP landscape.

Also in this episode, OpenAI and Meta continue to fuel the AI arms race with AI-generated videos in TikTok-style feeds and Meta ups the ante by using chatbot data to target ads. Then, Paramount acquired Bari Weiss’ The Free Press and brought Weiss on as editor-in-chief of CBS News.

Here are a few highlights from the conversation, which have been edited for length and clarity.

The Trade Desk’s tough year 

Peterson: There were bubbling concerns of “is The Trade Desk the next too big player in the ad tech space?” This year, the Trade Desk is still pretty dominant, but that dominance has definitely been put in check by… not even the rise of Amazon’s DSP,  but Amazon’s DSP seems to have shifted into a new gear this year… As we’re recording this, Amazon announced a partnership with Spotify to have Spotify’s video and audio inventory available for sale through the Amazon DSP. Meanwhile, The Trade Desk has just had a tough year.

Joseph: The Trade Desk has definitely had a rough time of it, probably going as far back as 18 months. You could feel that pressure building last spring when Amazon rolled out ads on Prime Video. As we reported, that move alone threw a spotlight on the Amazon ad business. By contrast, it pushed The Trade Desk into a more vulnerable position. But the real shift came when The Trade Desk missed its Q4 2024 numbers. 

Increased competition

Shields: [Walmart] was one of the big temple narratives they had as a big player. It’s that pinstripe movement that they appeared to be in because the growth of the Amazon DSP is coming forward. That was probably more of a blow to its stock price. Losing Walmart, it’s not going to bolster the confidence of the market, sadly. That’s for sure. Much of this decline in its market value is due to the emergence of the Amazon DSP. There’s a saying out there, “If Amazon is getting into your business, it’s time to get out of your business.” That’s a cautionary tale. 

Acquire or be acquired?

Joseph: I don’t think you can rule it [The Trade Desk being acquired by the likes of OpenAI] out. OpenAI generated $4.3 billion in revenue, but burned through $2.5 billion in the first half of the year. The need to spin up an ads business gets more intense by the quarter. Going on the M&A trail is the way to do that. Despite the issues with The Trade Desk, it’s still a robust business.