The Trade Desk’s stock is still struggling—and mightily—now sitting below $80 per share after its disastrous Q4 earnings report last week. As the company works to regain investor confidence, a new debate is emerging on X that could be concerning for Jeff Green: Will Amazon DSP put pricing pressure on The Trade Desk?
The discussion, led by RTB Guy, raises the possibility that Amazon’s aggressive pricing strategy in streaming could spill over into DSP platform fees. Essentially, Amazon’s ability to drive down costs—just as it did with CTV inventory after making Prime Video ad-supported last year—could make The Trade Desk’s 20% platform fee take rate look unsustainable.
Check out the thread here—lots of great debate and worth tuning in:
Why This Matters:
We wrote about the Amazon Prime Video “price plummet” stuff last year. They completely changed the CTV ad market by auto-enrolling millions of Prime members into an ad-supported model, which drove down streaming TV ad prices. Amazon’s scale allowed it to flood the market with inventory, effectively undercutting pricing expectations for everyone.
What if Amazon leverages its position in the market to do the same on the DSP side? It could create downward pressure on the fees DSPs charge for access to inventory and data. Given The Trade Desk’s reliance on a strong take rate to support revenue, according to those in the thread, this could put added strain on its business at a time when investor sentiment is already shaky. (Note that on the earnings call, TTD’s CFO said, “As expected, our take rate in 2024 once again remained within a very consistent historical range.”)
Experts React:
Highlighting some key tweets from the thread:
I particularly like this exchange (click it to see more)—Amazon DSP’s lower platform fees (1% for preferred deals, 10% standard) seem cheaper than The Trade Desk’s 20%, but as Adam Epstein noted, Amazon offsets this with CPM fees for first-party audience data. RTB Guy pointed out that with add-ons, Amazon’s costs may still approach TTD’s, while Google’s DV360 remains the cheapest by not charging for first-party audiences or brand safety tools.
Our Take:
Tough moment for TTD. The stock is at its lowest point since a year ago (though that was part of an upward climb, not a massive fall). If Amazon starts driving down platform fees, does that force them into lowering its take rate? Is that even a possibility? Or will they double down on figuring out how to make more money via products like Kokai, Ventura (long shot), or the +SP500? TBD but check out RTB Guy’s thread to follow the conversation.
