Ten Steps To Future-Proof The Trade Desk

The Trade Desk (TTD), the leading demand-side platform (DSP), finds itself at a critical juncture. The bad news for the company have been coming thick and fast in the last few months. TTD is grappling with significant challenges—intensifying competition from walled gardens, notably Google and Amazon, internal product struggles, and a steep 61% decline in its stock price since its peak in December 2024. This research note examines the obstacles confronting TTD and outlines strategic measures the company can adopt to secure its future in an increasingly competitive landscape.

The Challenges: Mounting Pressures

TTD faces an array of competitive threats, chief among them the growing dominance of walled gardens. Google and Amazon continue to expand their market share, leveraging vast data resources, integrated ecosystems, and scale to attract advertisers. This shift poses a direct challenge to TTD’s mission of supporting the open internet. Amazon Advertising, in particular, has emerged as a formidable rival. Its ad sales are experiencing rapid growth, and the Amazon DSP (ADSP) is making significant inroads into connected TV (CTV) advertising, not least by charging advertisers lower tech fees than TTD does. CTV is a segment critical to TTD’s business, standing for more than 50% of its revenue. The rise of CTV advertising on YouTube further adds competitive pressure on TTD.

Additionally, the ascent of Applovin, a leader in in-app and in-game advertising, highlights a contrast in growth trajectories. While Applovin does not compete directly with TTD’s open-web focus, its success signals to investors there is growth potential outside the walled gardens that TTD currently does not tap into.

Internally, TTD faces operational hurdles. The rollout of its new Kokai interface, intended as a transformative upgrade, has met with slow adoption and criticism over its uncommon user interface and missing features.

Another setback came on March 12, 2025, with Sonos terminating a partnership with TTD, in which Sonos was supposed to develop a TV stick powered by Ventura, TTD’s new smart TV operating system. This collaboration promised to secure CTV inventory and user data, but the deals collapse has left TTD with a strategic initiative marooned for now.

TTD’s reputation as a neutral advocate for the open internet has also come under scrutiny, with sentiment for it turning dark. Initiatives to find new revenue sources and efficiencies, such as OpenPath, which bypasses supply-side platforms (SSPs) to increase revenue, and the company’s practice of disregarding publisher-set price floors when bidding on inventory, have sparked concerns among buyers and publishers.

Furthermore, UID 2.0, a single sign-on network designed to address signal loss in ad targeting and championed by TTD, has failed to gain major traction.

Collectively, these pressures have contributed to a 61% drop in TTD’s stock price since its high last December, reflecting investor unease over TTD’s prospects.

Strategic Steps: Charting a Path Forward

1. To address these challenges, TTD must pursue a multifaceted strategy. One bold option is an acquisition of or merger with Roku. Integrating Roku devices with Ventura could replace the lost Sonos partnership, establishing a robust pipeline of owned-and-operated (O&O) CTV inventory. This would reduce TTD’s dependence on open-web CTV sources and strengthen its position in a fast-growing channel. However, this move carries risks. Rohit Dube, TTD’s Head of Investment and M&A, has noted that owning inventory could compromise TTD’s perceived objectivity, potentially leading buyers to suspect favoritism toward TTD/Roku inventory and prompting publishers to withhold their offerings.
   
   Another question is how TTD would pay for a Roku acquisition. As things stand, including a premium, Roku would probably go for $13 billion ($10 billion market cap as of mid-March, plus, let’s say, a 30% premium), far outstripping TTD’s cash reserves of $1.4 billion. In other words, the company would have to either issue new stock -perhaps an uphill battle given the current market sentiment and TTD’s low stock price-, or seek external funding, diluting shareholder value. The latter option appears to be the most feasible.
2. Should a Roku deal prove unfeasible, TTD could explore partnerships with other hardware manufacturers to deploy Ventura, ensuring broader distribution of its smart TV OS.
3. Expanding internationally, particularly into Europe’s burgeoning CTV market, offers another avenue for growth. To date, TTD’s focus has remained predominantly U.S.-centric, limiting its global reach.
4. Retail media presents a significant opportunity as well. With Amazon excelling in this space, TTD should intensify efforts to forge partnerships with major retailers and enhance its offerings.
5. Entering the in-app advertising market, currently dominated by Applovin and Unity, could diversify TTD’s portfolio and appeal to investors seeking growth. Similarly, TTD could emulate Amazon’s “Complete TV” model by partnering with linear TV providers to offer integrated campaign planning across streaming and traditional television.
6. Digital audio advertising, while not a huge sector, represents a viable source of incremental revenue through channels like podcasts and streaming music.
7. On the product front, TTD should make Kokai’s adoption optional, provide comprehensive training for it, and prioritize feature enhancements to rebuild user confidence.
8. OpenPath, too, requires adjustment—reducing fees for publishers could mitigate tensions and restore trust.
9. Regarding UID 2.0, TTD might consider scaling back investment to redirect resources toward initiatives like SP500, its curated inventory program. Expanding direct sales to brands, bypassing agencies where advantageous, could improve profitability and client relationships – but could also sour TTD’s agency relationships.
10. Above all, TTD must reinforce its identity as the “Switzerland of the open internet”—an independent, transparent alternative to walled gardens—reaffirming its commitment to fairness and objectivity.

Conclusion: A Foundation for Recovery

Despite the formidable challenges—Amazon’s aggressive expansion, internal missteps, and a battered stock price—TTD retains the potential for a strong recovery. A strategic acquisition like Roku, or alternative partnerships to deploy Ventura, could solidify its CTV foothold. Expanding globally, enhancing retail media, and refining its product offerings provide a clear path forward. By balancing innovation with a renewed emphasis on neutrality, TTD can navigate these turbulent times. The 61% stock decline since December 2024 is a stark reminder of the stakes, but with decisive action, 2025 could mark the beginning of a resurgence.

About The Trade Desk

Founded in 2009, The Trade Desk is a prominent demand-side platform that facilitates programmatic advertising across the open internet, spanning CTV, display, and audio. Headquartered in Ventura, California, TTD has established itself as a key player in ad tech, advocating for an independent ecosystem distinct from walled gardens. Though currently facing significant challenges, its history of innovation positions it well to adapt and remain a leader in the industry.