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How The Trade Desk's Unmatched Optimization Capabilities are Revolutionizing Ad Spend

What does The Trade Desk Do?

The Trade Desk (TTD) revolutionizes open-internet advertising by providing a bid-based system for ad agencies and brands. They help define customer-targeting metrics and secure prime ad placements online. For instance, Lululemon (LULU) can use TTD to target specific internet users based on income, interests, and more. TTD excels at optimizing ad spend and lead generation, focusing solely on the demand side of advertising, which sets it apart from competitors with potential conflicts of interest on the supply side.

What's to like about TTD?

Despite a sluggish start to 2023 in the advertising industry, The Trade Desk (TTD) remains resilient. While industry growth is expected to be lower than inflation, TTD's revenue increased by 31.9% in 2022, and it continues to outperform peers with 24.7% growth over the past year.

Employee sentiment is also strong, with 85% positive business outlook and 93% CEO approval on Glassdoor.

TTD's success is attributed to its data-driven approach, providing certainty and reliability in ad decisioning. The company has gained significant market share recently.

Notably, TTD has shifted its capital allocation strategy, reducing stock-based compensation (SBC) and repurchasing $400 million of its shares, indicating confidence in its undervalued status.

Our 2 cents...

As one of our first stock investments, we consider TTD one of our top-performing assets. We see it as an excellent choice for long-term investors looking to benefit from market share expansion in a growing industry. However, we suggest holding for 3-5 years, taking into account ongoing leadership transitions. Happy investing!


*We are not financial advisors. The information provided here is for informational purposes only and should not be considered financial advice. Investing involves risks, and past performance doesn't guarantee future results. Always do your own research and consult with a qualified professional before making any investment decisions. We are not responsible for any financial actions you take based on the information provided.

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