The Trade Desk today posted revenues of $160.7 million for the opening quarter of the year, a 33% year-over-year increase. But the company cited the impact of the Covid-19 pandemic as cause for withdrawing its earlier 2020 spend forecasts.
The demand-side platform’s Q1 figures showed strong signs of growth across all categories with ad spend on mobile inventory (both in-app and mobile web) up 38% compared to 12 months earlier. Revenue from connected TV was up 100% year over year.
However, the impact of the pandemic on advertisers’ budgets has meant the publicly traded DSP is not providing any guidance for Q2 revenues and is withdrawing its earlier full-year guidance which had forecast that gross spend on the platform would be at least $4.24 billion throughout 2020.
In a prepared statement, Jeff Green, CEO of The Trade Desk, said the company would use its existing cash flow to invest in its platform and expressed confidence that advertisers will look toward emerging technologies, particularly CTV, as media budgets begin to flow more freely once lockdown measures across the globe ease.
“While the timing is unpredictable right now, we can be certain that advertisers will increasingly value measurability in their campaigns, and that they’ll use data-driven strategies to drive precision and value across all channels,” Green said in the statement. “And nowhere will this be more apparent than the accelerated shift from linear to CTV.”
On the company’s earnings call, Green said The Trade Desk was tracking ahead of its expectations until the economic uncertainty prompted by Covid-19 led advertisers to “indiscriminately” slash media spend. This fluctuation was characterized by a steep decline in ad spend beginning in mid-March which eventually stabilized, and in some cases improved last month, according to Green, whose observations of the period tallied with those of Google, and Rubicon Project.
“Panic is not a strategy,” Green told financial analysts, adding that advertisers were quick to press pause on programmatic ad spend, simply because it was easy to do so, not because it was ineffective. “For a brief period of time, programmatic was hurt by one of its greatest features: its agility. You can easily start and stop programmatic campaigns in ways that are not possible in most other mediums like linear television.”
The Trade Desk’s CFO Blake Grayson told analysts the company would implement additional expense management measures in the coming quarter including a 50% reduction in its earlier planned hiring and marketing budgets. Similarly, last month, The Trade Desk began contacting supply-side platforms requesting they choose a single supply path to premium ad inventory within a matter of days in a cost-savings measure industry sources believe was taken to reduce overhead.