Several software stocks have plunged since late 2024 on concerns about bloated valuations and fears of AI disruption.
While The Trade Desk (NASDAQ: TTD) isn’t ostensibly threatened by AI, it has fallen further than almost any other stocks during that time period, now down 82% from its peak in Dec. 2024.
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The leading independent demand-side adtech platform (DSP) has been plagued by slowing growth, stiffer competition, primarily from Amazon, and the strength of “walled gardens” like Alphabet, Meta Platforms, and Apple, making it difficult for it to grab market share.
Management has mostly denied the competitive threat it’s facing on its earnings calls and insisted that The Trade Desk’s open platform is the best way to buy digital ads, but the stock price says otherwise. CEO Jeff Green has bought shares recently, attempting to instill confidence in the stock, but that hasn’t been enough to give it a long-term boost.
Now, The Trade Desk is facing an alarming series of customer defections that seem to underscore deeper problems with the business.
Image source: Getty Images.
Last month, AdWeek reported that Dentsu and WPP, two of the world’s biggest ad agencies, were leaving The Trade Desk’s Open Path supply optimization product over “hidden fees and transparency.”
OpenPath is one of The Trade Desk’s most important new products and was supposed to make it more competitive with Google. CEO Jeff Green even promised that its growth would accelerate in 2025 like an S-curve.
Instead, the opposite seems to be happening as those top ad agencies are saying that it’s unclear where their ads are running, and they’re also paying hidden fees on the platform.
On Tuesday, the stock plunged on a report in AdAge that Publicis, another giant ad agency, is telling clients not to use The Trade Desk as a DSP for digital media ad…
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