Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

The Trade Desk Stock Jumps on Partnership With Amazon

By Daniel Sparks - Jul 26, 2019 at 8:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here's the lowdown on The Trade Desk's new partnership with Amazon Publisher Services.

Shares of The Trade Desk ( TTD -6.65% ) surged on Friday, rising more than 9%. The stock's big jump followed Amazon's ( AMZN -1.38% ) announcement that its Amazon Publisher Services (APS) platform is partnering with demand-side platforms (DSPs) The Trade Desk ( TTD -6.65% ) and Dataxu TouchPoint.

The partnership gives ad agencies and brands using the two DSPs access to ad inventory available through APS, which consists of ads on ad-supported content on Amazon's Fire TV marketplace. On the flip side, this means publishers using APS now get access to marketers using The Trade Desk's platform.

The announcement is a "gamechanger for connected television," The Trade Desk CEO Jeff Green said in a YouTube video posted by the company on Friday. 

A diagram showing how Amazon Publisher Services platform works with ad buyers.

Image source: Amazon Publisher Services.

Understanding the partnership

"At Amazon Publisher Services (APS), we have been working hard to expand our services to connected TV (CTV) devices," APS wrote. "This includes building a CTV solution specifically designed for fast, efficient and transparent real-time buying on long-form video, as well as working to add demand sources to help publishers increase revenue."

This is where The Trade Desk comes in. As a DSP, The Trade Desk works with advertising agencies and brands by providing them a software platform to optimize their ad spend in the fast-growing programmatic digital ad market.

Amazon says media buyers using The Trade Desk and Dataxu will now "be able to access top-quality inventory" made available through its sell-side platform: Amazon Publisher Services.

Of course, Amazon wants a piece of the pie on the demand side, as well, so advertisers will still be able to buy ads through Amazon's own demand-side platform: Amazon DSP.

The implications

While the deal itself could prove to be material for The Trade Desk, the bigger story here is how a major streaming platform is opening up its ad inventory to the rest of the internet without requiring marketers to go through its native DSP.

"Amazon Publishing Services is supporting the open internet, in contrast to other big tech walled gardens," Green wrote in a memo to employees (via CNBC) about the partnership. "It's a bold move which may drive action from other CTV aggregators." The "walled gardens" Green referred to include tech giants like Facebook and Google.

Connected TV ad spend on The Trade Desk's platform has been a major growth driver for the company. In 2018, connected TV ad spend on its platform soared 900% year over year. In the first quarter of 2019, it was up 300% compared to the year-ago quarter.

Getting access to APS' inventory will likely help The Trade Desk's strong connected-TV momentum continue.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Trade Desk Stock Quote
The Trade Desk
TTD
$89.51 (-6.65%) $-6.38
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$3,389.79 (-1.38%) $-47.57
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
FB
$306.84 (-1.14%) $-3.55
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,840.03 (-0.68%) $-19.29
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,850.41 (-0.87%) $-25.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/04/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.