Thread by @FromValue

Tomorrow, $TTD reports its Q2 2022 earnings.

It may or may not be subjected to the overall weakness in ads (think of $SNAP, $META, $ROKU...)

But I won't panic if the stock would drop by double digits. I would add to my position.

Here's why👇(1/10)

First this.
$AAPL is building its own DSP (demand-side platform). h/t @dhaval_kotecha

This will probably not hurt $TTD but it could take market share of other walled gardens, especially $META and (to a lesser extent $GOOGL $GOOG).

Why not $TTD? 👇
2/10

digiday.com/media/apple-is…

A DSP offers software that allows brands (often through marketing agencies) to buy advertising space in an automated way with the highest possible targeting for the brand's purpose.

$TTD is a pure DSP, unlike $AAPL $AMZN, $GOOGL, $GOOG $META

3/10

$TTD is by far the biggest DSP on the open internet.

The others, big players $META, $GOOGL, $GOOG, $AMZN and $AAPL are all walled gardens.

This means that they only sell ads on their own platforms, while TTD offers ad space from all sources: internet, mobile, CTV, audio...
4/10

There is an inherent problem with walled gardens.

DSPs are supposed to stand up for the brands that are their customers, give them as much value as possible.

But there is a conflict of interest when you are both a DSP and a content platform.
5/10

A content platform wants to maximize its returns on its content. $GOOGL wants to earn as much money as it can from #YouTube as possible, for example.

Therefore, the DSP is incentivized to say the ad space is worth more than it really is.
6/10

Measurability criteria can be changed to benefit the content platforms.

Think of what exactly an impression is (how many seconds), what interaction is, bounce rate reports etc.

There are standards but in doubt, the walled gardens will always choose for themselves.
7/10

That's why TTD's @jefftgreen says that walled gardens "get to grade their own homework."

Because TTD is independent, it can measure which channel works best for your product.

$KO's return on your ad $ is much higher from an in-store display than from a $META ad.
8/10

TTD can measure that too. It has collaborations with big retailers like $WMT, $HD and several others.

It can measure if certain campaigns in certain areas increase interest and sales. This has always been the holy grail of advertising: direct measurement.

9/10

$TTD's Q2 revenue is expected to come in at $365.2M, up 30.44% YoY. EPS at $0.20. The company has always (!) beaten the consensus both for EPS and revenue. Let's see if it can continue its streak.

I'm also very interested in Jeff Green's comments on the earnings call.
10/10

In a🧵I can only give limited information but I hope it can help you.

On Potential Multibaggers, you get much more insight and I take the time to answer all your questions.

Interested? There is a 2-week free trial, easily cancelable with a few clicks.

seekingalpha.com/author/from-gr…