David Beckel (Berenberg Capital Markets)
“On Walmart again. I was hoping you could provide a little bit of context around the structure of that partnership financially. Is that the type of deal where you’ll be able to participate in the growth of that platform over time or is it more of a fixed fee type of arrangement?”
Jeff Green
“On the Walmart piece, I’ll just speak at a very high level. And that is we are both highly incentivized to help sell more Dove soap and more Tide detergent and more Hershey chocolate bars. And if we do that, we both benefit. We both scale with the outcome. So in other words, we’re both going to participate in the upside.”
On yesterday’s earnings call, Trade Desk’s CEO Jeff Green led his usual encouraging discussion on the migration towards programmatic advertising (“I’ll just say that 2020 will, without a doubt, go down in history as a tipping point for TV”) and we got progress reports on the company’s international growth and the development/rollout of the new Universal ID (UID), which will eventually replace cookies. Basically: Trade Desk’s wheel is turning and it can’t slow down.
What really stood out though came in the Q&A portion of the call, where Berenberg’s David Beckel asked for more color regarding TTD’s new partnership with Walmart. Jeff Green’s response hinted that TTD has created, in essence, individual performance-based contracts among three parties: Trade Desk, Walmart and a brand (like Tide). This is a huge development as media buyers historically have been removed from receiving direct compensation from successful ad attribution beyond good faith understandings of receiving future ad buys. The Trade Desk now has “skin in the game” and will act as an equal business partner with the world’s largest retailer and all the brands that sell within Walmart’s umbrella (brick-and-mortars and online). It’s a win-win-win, especially considering Walmart’s revenue for 2020 was $559B.