Recode Decode: Jeff Green of Trade Desk

  • Wall Street loves The Trade Desk: We IPO’d at $18 a share. We now trade at $130 a share. 

  • On competing with Google and Facebook: We don’t play their game. The mistake most companies have made in digital media is they take the Google/Facebook playbook and they just try to execute it themselves. That is super hard unless you’re backed by a quasi-monopoly. 

  • What The Trade Desk does: If you want to buy ads on Google you go to Google.com. If you want to buy ads on Facebook you go to Facebook.com. You come to us to buy all the rest. And the rest of it is way bigger than any one destination.

  • The Trade Desk does a significant amount of business: In 2017 more than 50 percent of the S&P 500 spent at least $1 million each with us. There ends up being about nine million ad opportunities every single second. All of those are optimally monetized by essentially running an auction that lasts one-tenth of a second.

  • What has changed about advertising over the last 10 years: It turns out that when you apply data to advertising it’s way more effective than when you just buy it using educated guessing. Most of the $700 billion spent on advertising is educated guessing. 

  • Ads vs Subscriptions: When Hulu or Spotify says [to consumers] you can either see ads or you can pay more for the subscription. . . In both cases, between 75% and 80% of consumers say show me the ads.

  • Jeff believes an ad-supported version of Netflix is inevitable: I think this is the model for lots of publications. If you wanna pay a premium to avoid the ads that’s fine, but the default will be to see ads.

  • How do you get customers to spend money with you instead of Google or Facebook: Big data-driven advertisers are frustrated by the asymmetry of that partnership. Because Google and Facebook control massive amounts of media it allows them to control pricing [making it more expensive]. . . Advertisers want more control and they want a more symmetrical relationship. This is an opportunity for The Trade Desk. 

  • The biggest opportunity for advertisers: I think the stuff that’s most on sale and the most undervalued and the biggest opportunity for advertisers is on the open internet, which isn’t easy to get to.

  • Why Jeff moved to Hong Kong six months ago: It’s all about the opportunity in Asia. We announced partnerships with Baidu, Alibaba and Tencent. . . I believe those vectors are huge.

  • Full podcast here.