The Trade Desk (TTD +5.99%) stock is taking another beating today, and the culprit is Omnicom (OMC 1.41%) announcing a third-party audit of TTD's pricing practices. This review follows Publicis Groupe's (PUBGY +1.16%) dramatic breakup with The Trade Desk last week over alleged hidden fees.
Cue the panic selling. The Trade Desk's stock fell as much as 9.9% on the Omnicom report in Ad Age.
NASDAQ: TTD
Key Data Points
Another audit panic
Omnicom's initial contract review found exactly zero issues. The full audit is basically a "well, now we have to check" move after Publicis made a scene. They're even bringing in a Big Four accounting firm to run the deep review, so this won't be some velvet-glove treatment; if there's dirt, they'll find it. For the record, Omnicom's regular auditor is Big Four giant KPMG. The pricing audit may or may not involve a different accounting titan.
The Trade Desk, for its part, is being downright cuddly about Omnicom, describing their relationship as going "from strength to strength" in correspondence with Ad Age. That's a very different vibe from the Publicis spat.
Image source: The Motley Fool.
Ad agencies Omnicom and Publicis aren't exactly neutral parties here
Here's the thing: The Trade Desk CEO Jeff Green has been poking the agency bear for a while now, pushing to work directly with brands and calling out agencies for their own transparency issues. The agencies aren't exactly disinterested parties here. The Trade Desk is shaking up how the digital ad-buying industry works and raising its content platform standards. It's no surprise to see incumbent names like Omnicom and Publicis making a fuss.
While the ad-content agencies complain, ad-space publishers are singing a different tune. Playwire CEO Jayson Dubin recently praised The Trade Desk for forcing the industry to clean up its act, calling it a "rising tide lifts all ships" situation.
Yes, The Trade Desk's stock chart has been rough over the past year. These headlines don't help. But if Omnicom's audit comes back clean, it could flip the narrative entirely, leaving Publicis looking like the bitter ex. For patient investors, this market tantrum might end up being a gift.
