What happened

Shares of The Trade Desk (TTD 0.73%) cratered on Friday, falling as much as 11.1%. As of 2:28 p.m. ET, the stock was still down 6.9%.

There were a pair of catalysts that drove the ad tech stock lower. The abrupt departure of a high-ranking executive and signs of a pullback in ad spending combined to send the stock tumbling.

So what

In a regulatory filing that dropped after the market close yesterday, The Trade Desk announced that its chief data officer, Michelle Hulst, would depart her position effective today. The company didn't provide a reason for her departure. When a C-suite executive leaves -- particularly on short notice -- there are always questions about what prompted the move and whether the company will be able to find a suitable replacement in a timely fashion.

Hulst has only been with The Trade Desk since mid-2020, rising from executive vice president of data and strategy to chief operating officer and finally chief data officer.

Additionally, streaming pioneer Roku (ROKU 8.79%) announced its second-quarter earnings after the market close on Thursday, and the dismal results and management commentary sparked concerns for The Trade Desk investors. Roku gets the lion's share of its revenue from the digital advertising shown on its platform, and growth slowed to a crawl. Its management cited a "significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth ... we expect these challenges to continue in the near term as economic concerns pressure markets worldwide." 

Now what

Given the importance of advertising for The Trade Desk, investors are right to keep a weather eye on the results of other companies in the space. History suggests that marketing and advertising are among the first cost cuts businesses make when faced with an uncertain economy.

Those concerns got a boost yesterday when the U.S. Bureau of Economic Analysis released its initial estimates for gross domestic product, which contracted for the second successive quarter, meeting the historical definition of a recession. 

It's important to remember that The Trade Desk faced similar challenges at the onset of the pandemic and weathered that storm quite well. While there might be headwinds in the short term, The Trade Desk's state-of-the-art technology and its industry-leading position make the stock a keeper.