Chit Chat Stocks - Dhaval Kotecha | The Trade Desk (TTD)

Episode Date: December 10, 2020

On the 10th day of Christmas Dhaval Kotecha gives to you, The Trade Desk. The Trade Desk provides digital advertising campaigns for a multitude of digital advertising platforms. Dhaval points out various topics and Chit Chat Money tries to poke some holes in the bull thesis. Visit our website: https://www.chitchatmoney.com/ Subscribe to 7 Investing with the code "CCM": https://7investing.com/subscribe/ Follow Chit Chat Money on Twitter: https://twitter.com/chitchatmoney Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to 25 Stocks of Christmas, presented by Chit Chat Money. Today we have an interview with Davalko Techa. We've had him on before. How should we define him? I would call him an expert in advertising technology. Yeah, I mean, I believe his personal work is in the ad tech space, and so now he's taken that expertise and sort of shared it with everyone on Fintwit, and it's helping a lot of people realize a lot of the good companies in there.

And so today we talk about the trade desk, which he obviously knows really well. Yeah, I learned probably 10 new things about the company. And I've owned, it was like 1% of my portfolio in the past. So it's not like I didn't know what they did, but he really went into detail. So if you're interested at all, I mean, it's a must listen. And before we get to that, we have to do our sales pitch, which I'm going to go this time because I've been crushing it. I hate to brag, but I think it's all equal in my eyes. Okay. But we have a partnership with 7investing and you get $10 off your first month. No brainer,

obviously. So it's only $7. You get seven great ideas. I still haven't looked at this month's recs, which, who is your favorite? I don't want to pin anyone down and I can't remember all of them, but oh gosh. Just pick one. I'll go with our guy, Matt. Okay. Yeah. All right. All right. Well, I mean, Matt, anything exciting about the company that you can't, you know, you got to like beat around the bush with it? It's someone who's in retail that Amazon is going to have a tough time disrupting. Oh, snap. All right. Well, if you want to read up on that, feel free to use our code CCM to get $10 off for your first month.

Here you go. Welcome to Chit Chat Money. On this show, hosts Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investment. As a quick reminder, Chitchat Money is a CCM Media Group podcast. Ryan and Brett are not financial advisors. Anything discussed on Chitchat Money by Ryan or Brett or any other podcast guest is not formal advice or a recommendation.

Now, please enjoy this episode. Today, we are welcomed by Deval Kotecha. we've had him on the show before we kind of met him through twitter but it's been a while and you can find his stuff obviously on twitter he provides a lot of valuable content but he also has a new podcast out i guess it's been what a month two months since you uh introduced that yes okay and it's called stock detective but uh yeah him and kermit capital who we've also had two experts in the software space i'd say yeah i'm advertising you more of the advertising him more of the data um so you can get a good you know insights from uh industry experts but uh daval how have you been

i'm doing great how are you guys yeah not too bad we're enjoying the uh 25 stocks of christmas and today we're talking the trade desk which you are you sort of have deep roots in ad tech so how did you end up coming across the trade desk yeah so i work in uh the programming advertisement space and uh the trade desk happens to be the top dog on the demand side so uh i have been following the trade desk uh since its early days um and it went public uh in 2016 ish or so at around $18. And I have been following it since then. And I always thought that I would initiate a position in that stock, but I kind of never ended up pulling up the trigger until it doubled like almost five times in value. Like it went up five times in value from there. And

at that point of time, I said, okay, let me just jump in that stock. And yeah, since then it has been a pretty good ride for me and it has been doing phenomenally well and that entire space is so exciting so yeah that's how I found the trade desk and it's a company that I feel like a lot of people sort of like peripherally know what's going on like so it's like demand side platform for advertisers but can you go into a little more depth of what trade the trade desk actually does sort of at a deeper level right so when i try to evaluate a company first of all what i do is i go in and on their website and say okay what's the mission statement what are they trying to achieve or what are they trying to do right so the trade desk's mission

is to transform the media for the benefit of humankind by helping brands deliver a more insightful and relevant ad experience for the consumers and setting a new standard for global reach, accuracy, and transparency. So what does that mean? I will simplify that and say, okay, Trade Desk is a demand side platform and it helps the buyers reach the consumers programmatically, right? So they are a platform,

multi-channel platform that provides buyers the access to all different sorts of inventory like say display video mobile native audio and connected tv which is the hot thing right now and with their products what a buyer could do is they could execute full funnel campaigns and also what they could do is they could tie up a different sorts of uh channels and kind of make meaningful uh outcome from uh that that sort of targeting right so say for example if you are browsing your uh phone and you look for something and then if you are looking for something else on your desktop, right? Then Trade Desk would be able to tie that two devices together

and provide you the meaningful end onto that other device, right? So that is one thing that they do as well. Now, what I would say is I would go over the products one by one. So that would give a better idea on the Trade Desk. So they have the product portfolio. The first is their demand side platform, which is the main one. That's where like the users can go and create the campaigns, right? So that's where the campaigns are set up. They are delivered.

The second one is called the COA, right? So COA is their secret sauce, which is their AI tool to provide for better decisioning for the campaigns, which are set up in their demand-side platform, right? The third tool is their planner. So planner is a tool they offer to their clients to generate data-driven media plans using audience insight to accelerate campaign performance.

The other tools they have, there are three more. One is their data management platform, which is called the DMP. that's where like you see live ramp also falls under another company that you guys already talked in the past now DMP again is a platform to onboard and manage advertiser data and purchase third-party data and create custom audiences so third-party data is something that live ramp does and then you can onboard that third-party data onto their platform for their buyers right their clients to use those data and that's excuse me that's to help to target um the advertisements

yes so they could create custom audiences and they could say okay if you are in a market to buy a car then you fall under that audience segment and then i want to target all the users who want who are in a market to buy a car okay so then the the audience segments work like that the other tool they have is the pmp which is the publisher management platform so on a high level it's a platform to manage deals which is where they could say okay i would want to buy this inventory at this price and they can take those deals directly from the publisher and input that and they could say okay we will bid on that particular deal so uh sorry uh so it sounds like um and by publisher let's say we're talking about like espn.com yeah something like that the

publisher could they come straight to the trade desk with their ad inventory or do they have to go through a supply side platform uh right now they they have to go through the supply side they can go to the DSP directly, but it's not something very easy. And it makes sense for the SSPs to be a part of this entire ecosystem. And that's where the requests are routed from because the auctions are handled by the SSP. And there are multiple DSPs. And what the publisher would want is they would want the best price for that particular ad spot. So if the SSP is not there to handle the auction, then you probably are just talking to one DSP and that one DSP says, okay, I will bid at this much. Then they are just having to end up fill that ad spot at that price.

Whereas the SSP is conducting that auction. There might be some other DSP who is willing to pay more than if you would have just integrated directly with that DSP. Okay. That makes sense. Right. and the last tool that i was wanting to talk about is their apis and by apis what i mean is they have created this sort of interface where the clients can build a completely customized bidding platform on top of the trade desk platform right so that is also where they are investing very heavily if you consider in the future, right? So that's all any sort of customization I want to do as a client on top of the TradeDesk platform, I'm able to do that. So those are their primary tools. And what these tools in total, they help their clients to do is

to do several different types of targeting. And some of the examples of those targetings are like the third-party audience targeting where I mentioned just now where they could say, okay, I want to target anybody who is in the market of buying a car. That's a segment and I want to target that.

And the first-party targeting is the data which I have already with different sorts of pixels which I have put on the website And I am capturing the data for that particular user and seeing, okay, what sites they are going to like going on and capturing that information by myself as a buyer. There are various different other types of targetings the clients of TradeDesk can do, which are primarily the agencies that run their campaigns. Site app targeting is one where I could say, okay, I want to deliver my ads on these particular sites or these particular apps. I don't want to sell the ads on certain categories of apps.

I don't want to sell certain sites that would be, say, approved lists or, say, block list or things like that. I could say, I don't want to target particular keywords. I want to target only these keywords. And then I could also want to target, say, weather conditions, temperature, and geo. say if i want to only target users in a particular state then i could say okay i want to do this or i could say i want to only target users who are in the 10 mile radius of say home depot right

so i could do various different things going on to the platform and on top of that what you could also do is to do like cross-device targeting that i already talked about where you browse something on one of your devices and you get the ad on the other device. And you could also do frequency controls where you could say, I only want to deliver the same ad to the user in this time frame. If I deliver say X amount of ads to this user in this time frame, then I don't want to deliver the same ads over and over again, because that would give like bad user experience and the consumer would go away from like they don't want to see the same ads over and over again right right okay so yeah uh that's what trade dust does uh if you have any other follow-up

questions i'm happy to answer that i got i got one um so is it sort of like their value proposition to these advertisers is hey we can target as well as say facebook can uh but you don't have to go into that walled garden yes trade desk is all about open internet right so facebook and google and all those walled gardens kind of a company what you could do is you could run the campaigns there but there are limited sort of attributions or measurability what you could say uh in terms of the wall gardens whereas trade desk is like you could do like you could put pixels on that where you could say okay i want my first party data and i want to run these campaigns and i want to capture the data myself whereas there would be very much a limited

capability on like the wall garden side on what you could do there okay that makes sense and with a company like Trade Desk, how important is management, maybe in general or just specifically for you? Right. So management is one of the most important things when I look at a particular company. And let me give you a background on how they started the Trade Desk. So Trade Desk was founded by Jeff Green, who is now the CEO of Trade Desk and Dave Pickles, who is now the CTO of Trade Desk.

So Jeff Green founded the company called Ad ECM in 2003 and sold that company to Microsoft in 2007. And Jeff met Dave at Microsoft and they left Microsoft to start the Trade Desk in 2009, right? Now, Jeff Green, he owns around 10% of the company stock. So there's a lot of skin in the game. And I love that sort of thing when it comes to the management owning the stocks in their own company and by like 10% is pretty significant skin in the game. And the other thing that I'm looking at from the management is they are executing wonderfully since the company went public. So back in 2016, the price was like $18 a share when they went public. and now the share price is almost around $903,

which is over 4,900% returns and is a phenomenal result for the shareholders as well. Yeah, it's pretty good. Yeah, it's not too shabby for sure. Yeah, and the other thing that I go and do is to look at the Glassdoor reviews, and I went to Glassdoor for the trade desk, And I saw that 91% of the employees approve Jeff Green as the CEO, which is a great sign of leadership.

And again, I like the visionary style of Jeff Green. So yeah, management, very important. And I think the management is stellar in case of the trade desk. Yeah, I know that they have a strong history of getting their story out there. They're posting videos all the time, doing conferences, trying to get the public to understand why they should use this product, correct? Right. Which is valuable to begin with, sort of that level of transparency from management. But on a more complicated business model, I think it's really good that the Trade Desk is doing this because it makes it a lot easier on the investor's side to sort of understand.

Now, sort of the why you're buying it. I know you sort of touched on this already, but if you want to go maybe a little deeper into your thesis, because obviously it serves a good value to customers, but that doesn't always translate to a perfect stock performance. So why do you like it as an investment? Right. So there are so many reasons and I have come up with certain bullet points and I will go over like one by one.

So, let's look at the market cap, right? So, market cap of this company right now is $42 billion. And what I'm seeing is this company is still getting started, right? I see this company, $100 billion company in the next few years, and I will explain why I see that happening, right? so the first thing that i want to touch is they are the market leader at this point right so they are the biggest demand side platform uh outside of the walled gardens um and what i like to do is i like to bet on the market leaders um and the companies which constantly are executing well Right. So on their last earnings call, what they mentioned was not only the existing advertisers kind of increased their spend on the platform, but they also won a significant amount of business from their competitors. right so which means that they are gaining market share uh as it stands right now and i think they will continue to do that in the future um and again like for in my eyes they are a winner and um as david gardner puts what do winners do they win right so they keep on

sorry i said they keep on winning or whatever he whatever his uh yes yes and and and that's what i i see uh them continue to do uh in the future now we already talked about their platform um like what their tools are within their platform uh they are having the best of the class tools and the platform is like very good in terms of like technology as well so i'd like to provide some more color on on that because this is very important to understand like how they have kind of evolved in terms of the platform so back in 2018 right they overhauled their entire platform basically what they called was the next wave so they invested around 40 percent of their engineering resources towards like bettering the entire user experience and focusing on their

tools like co-op planner etc right so basically what that kind of did was it made it much easier for the buyers to kind of set up their campaigns on their platform, made it easier for everyone to run the campaigns, provided much more transparency, and that kind of allowed the clients to kind of increase their spend on their platform, right? So in terms of the revenue numbers, 2018, the revenue was $477 million in 2018. And right now, it's almost going to be around $800 million in 2020, right? So we are looking at a significant increase in the revenue after they announced the next wave and those updates were pushed on that platform. Now, if you happen to go on their last quarterly earnings call, what Jeff Green said was they were going to launch one of the biggest upgrades to the system in the company history.

which they called as Solomar. That's the next big thing coming on the Trade Desk platform. And I would definitely think that it's something I'm looking forward to and I see how the Solomar will bring in more business for the Trade Desk because that will make a lot of things even easier for the clients to run their campaigns on. Uh, the third thing I can talk here is the robustness of this business, right? So, uh, during the pandemic, uh, back in March, uh, when this all started, everyone talked

about the headwinds to the advertisement and this entire industry and, uh, said, okay, ad tech, a business, businesses like Trade Desk and Roku, and those will be severely impacted because their revenue is coming from the client spending on the advertisements, right? But what we are seeing right now is they have successfully passed through that sort of the pandemic worries that everyone had. And we saw a 32% year-on-year revenue growth in the last quarter. And on top of that, what they're saying is, for the Q4 2020, they are guiding for 33 to 35% revenue growth, which is really good. This sort of business where the clients can stop the spend with the push of a button, they can also start the spend with the push of the

So it was very easy for the clients to stop spending on the platform. But it was, again, much more easier for the clients to start back their spend on their platform. And what Jeff Green also mentioned on their call is the clients who did not pause their spending, they saw that they were in a much better spot than the clients who paused the spending during the pandemic. Um, and, uh, the other thesis, like I, I have a lot more points and I can keep going, but I will limit it to, uh, just three more. Um, and, um, the one more thing that, uh, Jeff Green talks about, uh, is, uh, that the advertisers are getting more deliberate, right? So that's, uh, what he's seeing in the industry, right? So what TradeNest did was they conducted a survey of around 200 advertisers and the results they came back with were like very enlightening and what they saw was around 85 percent of them said that they were under new pressure from cfos to justify marketing spend and to measure against the business goals right so 50 percent of them

are now having their typical measurement techniques question so basically when they are throwing money into advertisement spend, which they cannot kind of measure, then what's the point of doing that sort of advertisements, right? So what happens here is now all those advertisers who were not able to measure their performance effectively, they are falling over to the data-driven methodology, which Trade Desk is offering them. and what they will be able to do is with that data-driven methodology,

they will be able to measure the return on investment they are doing with the trade desk, right? So that is one thing that I think there's a lot more spend going into that platform in the coming few years just because of what I'm seeing with all these advertisers. The other main reason I see is the connected TV, right? So connected TV, we have seen that there's a fundamental shift that has happened in advertising with COVID-19.

What we are also seeing is with COVID-19, people are now cutting their cards and moving to the platforms, which like say Roku or any connected TV sort of platforms, right? And so this is a data from eMarketer and the data is like 77.6 million households in the United States will have the cable TV packages this year, which is down 7.5% year on year. So typically what they kind of predict was a 3% decline over like every year. And now this year we are seeing a 7.5% decline. and that number is continuing to decline and now it will decline rapidly.

The predictions now is that from that 77.6 million, right? We will be seeing that number drop to around 50 million, which is about a 40% drop from here, right? So we are constantly, like we are in a trend of declining, decline of the linear TV, right? And Jeff Green clearly puts it, right? If you see his videos on YouTube and he says linear TV is dead and he has often referred

to it as a ticking time bomb. So if you see the estimated global ad spend, the TAM, which I can say, $725 billion. And out of that $725 billion, there's $230 billion from the linear TV or upfronts, as they call in the industry, right? So now, if Jeff Green is right, which I think he is, where does that $230 billion go, right? So the ad budgets of the linear TV. And I think it goes to the programmatic and who are going to be the beneficiaries of this shift.

I think companies like Trade Desk and companies like Roku and even companies like Magnite, who are on the supply side, they will benefit from this shift. And again, if you see TTD, they have captured approximately 1% of that market. So I think there's a lot of room to run for this company. Right. And the other thing which I want to highlight is from the same survey, right? So from the same survey that they did for that 200 advertisers, one more interesting data point was that there was a shift from the user generated content to the premium TV content from on the part of the advertisers. So what that means is the user-generated content, it's pretty divisive in nature, like you see on Twitter and on Facebook and on those platforms, right? Right. Um, so 90% of those advertisers, they plan to move those ad dollars away from those sorts of user generated content platforms to the platforms, which are like the premium TV content,

like the Hulu's and, uh, those content, like say the Roku channels and off the box or something like that. Yeah. Yep. Yep. But so TradeTask has won tens of millions of dollars of spend from people like the advertisers, which shifted from the UGC, which is the user-generated content to the premium TV content. And the last point which I want to highlight is their international growth. So, again, when the pandemic started, they saw that the disruption on the spend numbers that this they had more disruption internationally as compared to the US because that's where it all started initially. Right. So, but what they started to see was the recovery also on the international side. It was much earlier than what we saw in the US. Right.

So they talk specifically about two areas like Japan and France, and they saw like 100% spend that grew year over year in the last quarter, which is very promising. And also, they are focusing on China. So China is their big story, and they specifically mentioned that they are going to heavy up their investments in that region. So in short, what they are trying to do is, so the brands specifically, right? So the brands, the advertisers, the buyers, basically, they are trying to look for alternatives to the wall gardens and the broadcast TV. And they are leaning on the data-driven methodology, which could be measured objectively. And this all will act as a secular tailwind for a company like Trade Desk. And that's why I think it could be like $100 billion plus company in the next few years.

Okay, yeah, it seems like they have a ton of tailwinds coming around. And that CTV stuff, it just seems like there's a perfect storm coming together of, you know, four different things that the advertisers are going to want to spend over there. Yeah. All right. I think we're, I mean, that was a very comprehensive overview, so we appreciate it. We did. That'll be great. But we're going to hit a quick break here, and then we're going to try to poke some holes in your thesis.

Cox Panoramic Wi-Fi includes advanced security to help protect all your connected devices. You'll get real-time alerts. oh like this one so you don't have to worry about malware or when your kid downloads a song from a shady link and now all your computer can play is red color red color where are you all blocked thanks to advanced security included with cox panoramic wi-fi advanced security must be enabled in the panoramic wi-fi app restrictions apply welcome back in next we have devil's advocate so most of our listeners know how this goes we're gonna provide some counterpoints uh just want to get this out there it was hard to find some

counterpoints for the trade desk we know we know we're reaching for counterpoints when we have to go to valuation because it's like you can't find anything wrong with the business so let's try to pinpoint something on the stock but i'll go first and this one may or may not make any sense and i guess you can refute it if you want um they don't know so i mean i see them as like a connector between obviously the publishers and the advertisers but they don't own like the stack whereas let's say i mean roku has a dsp i'm pretty sure and roku owns a lot of they obviously have the hardware and then they have roku channel and then they have the dsp so they sort of own a lot of the content the trade desk as far as i can see doesn't own any of it does it worry you that the

business is a little more fragile as someone that's connecting almost like a middleman um so they they are not the middleman in this ecosystem uh they are the ones where um like in this ecosystem right so you have um the publisher and then you have the supply side which is the ssp and then you have the dsp right so i have uh put some um uh whatever simple explanations on my twitter feed um on like how these all are connected but if you see uh on on the DSP side, that's where all the advertisers will go to run their campaigns, right? So if a company like Trade Desk is allowing them to target their end users or the consumers in the best possible way, and they could measure appropriately what that users are,

and they could track down, okay, because this user saw this ad, they went and did this, right? So they could measure that. And that's where I don't think they are the middleman. Like calling them as a middleman is not right because I would think SSP is a more kind of a middleman here rather than a DSP. Like if you say SSP, which is like your Magnites and Freewheel

and Pubmatic, those are your middlemen because the publishers can say, okay, I don't want to work with the SSP. I can just directly go to the trade desk and say, fill this ad spot for me. And they will be able to fill that ad spot. That's, sorry to interrupt you, but that is one of my concerns

on understanding the value of these- SSPs, right? SSPs or DSPs, because it seems like one of those could get cut out. And it sounds more like the supply side is the one that publishers can kind of bypass. Yes, that is a possibility, but will they do that?

Probably not. And there are many reasons to that too, right? So in this case, it all boils down to the relationships. And what happens is the SSPs have the relationships with the publishers. So if now, if you see a publisher going directly to a DSP,

then it would mean that any SSP which has the relationship with that publisher will think they will be getting cut out of that ecosystem. And then that would not play well with the publisher side. And publisher side is already integrated with, say, a few SSPs. And what happens is because now there's code behind the scenes when the publisher's website is loaded, you have, say, hundreds of thousands of DSPs, but you have limited SSPs. So what happens is now if you try to send those requests to a lot of DSPs, then you will load your code on your publisher side. And that would mean that the publisher side is loading very slow.

And that would kind of throw off the users because now the publisher side is loading very slow. And I don't want to visit a website which is not even loading just because they are trying to fill those ads from various different DSPs. And now if it makes sense, because if you have, say, an integration with, say, just three DSP SSPs, then you only have to trigger the code for these three SSPs. Just call those three SSPs. They will handle all the auctions. They will give you the best price and they will fill that ad spot. So as a publisher, I don't need to worry about it. Right. Yeah, makes sense. OK. Yeah, I think that's a good answer to my question because I was really confused on that. And we got a lot of slack for, we sort of came out with some criticisms on Magnite because we didn't understand where they sat in the value chain.

So that definitely clears it up and helps. And again, those Twitter threads are, you made some diagrams on them. If people are confused listening, I'd recommend go check those out. It kind of gives you a visual overlay of what's happening. I'll hit my counterpoint though. And when someone looks at this company initially, they're going to check out, you know, the financials most likely, and they're going to see that it's trading at an EV to sales or price to sales of, you know, next 12 month revenue of over 40. And they're going to, you know, back away and

say, whoa, like all the growth is already priced in. How do you look at that specifically with Tradesk? Or maybe how do you think about valuation? I know you own the stock before it traded up this well, you know, is it kind of just a permanent holding for you? You know, what do you think? Right. So I agree that the valuation is very rich. And I have been like I started my position when the trade desk was at around 85 bucks. Right. So I have congratulations from there to where it is right now. Thank you. So and it is my largest position. So, yeah, I would agree on that valuation. Valuation is very rich and it makes it tough for even the most bullish investor to get into the stock. But again, if you look at any company which is like a great company, then it will have these sky high valuations. And what I would say is if it's a quality company, then it's OK to pay up for quality.

And the reasons which I provided like earlier, right, all my thesis, I see it working out and I see there's a lot of future growth in this company as well. I see like in terms of CTV, there's a lot of growth ahead. In terms of the overall TAM, there's a lot more to capture in terms of the growth in that stock. And again, the management's track record, right? Again, it's just a phenomenal, um, until this point. So I don't know, uh, why, like, uh, it, it is rich, but, um, I'm still adding to it,

uh, on a regular basis. So, um, yeah, like it's, it's okay to pay up for the quality, uh, and you see, uh, this thing, uh, pan out for a lot of other companies like say Zoom, uh, as well. And then there's other companies like say Nvidia and a lot more where you are paying premium price for those companies. Right. So. Right. And I guess you're kind of in the mindset you can, you as the research you've done your expertise with ad tech, you're going to see, all right,

these guys can grow at a high revenue rate for the next decade. I'm okay in the short run. If say the market votes that it needs a 50% haircut, I'm okay with that because I have a, you know, a time horizon over until about 2030 or whatever it is. I don't want to put words in your mouth, but. Yes. Yes, absolutely. And I would be happy if the share price goes down for some reason,

which is not kind of related to my thesis. And I would be a happy buyer at that point of time, because my time horizon is long enough for this entire story to pan out. So on that point, what would have to happen for you to, what would have to happen in the course of business that would disprove your thesis? What would make you want to sell it? I mean, as, as your largest holding something big would probably have to happen. So what would that be?

So for me to sell the trade desk, right? Two of these things would should or must happen for me to get out of this position. One is people start going back to the linear TV or the trends that we are seeing doesn't pan out as expected. Right. And I think there's very little chance of that happening. So we are seeing the other way around, right? So again, like that's something I would kind of watch,

but I don't see that as a problem. The second and the most important thing is Jeff Green. If he steps down, I would sell TTT. And that's a no brainer in terms of the jockey. Jeff Green leaves the company, then yeah, that's one thing. And the other thing that I want to highlight and which we didn't talk about is you might've heard about the announcements from Google and Apple. So Google announced that they are going to end the third party cookies in

Chrome and Apple announced that it's planning to request user consent to track their data via the pop-up message within the app, like in iOS 14 and above. So again, like if Trade Desk is not able to come up with a solution, right, then my thesis is busted right there because Trade Desk, this business is dependent on how effectively it is able to target the users for the clients, right? So if the buyers are paying Trade Desk for effective advertisement, right? So if I'm in a market of buying a car and the client says, I want to target that user, but Trade Desk is not able to do that just because of these changes, then thesis is busted

and I want to sell. But what Trade Desk is coming up with is an encrypted email-based unified ID solution, right? So that particular solution is an answer from the Trade Desk to these changes that Google and Apple are making. And what I'm seeing is industry-wide, they are getting a lot of traction for that ID. and you would have seen or heard that major data management platforms like LiveRamp and SSPs like Magnite and Index Exchange, Pubmatic, and then there were like the other competitor as well, like say Critio. They are having partnerships with the trade desk

and they are trying to work with them as a part of the open internet and trying to, what I would say, trying to support that initiative, right? So if that thing does not work, right? So the unified ID does not get traction and then if it's not working out as TradeDesk would have hoped for,

then thesis is busted. And that would make me sell there. But again, I'm seeing every single day more and more companies trying to support Trade Desk with that initiative. So that's, again, I don't see that happening too. So my answer here would be, okay, I don't see any reasons in the near future that would make me sell out of Trade Desk. okay that makes sense and do you think that this apple initiative will actually help them in the long run because it's going for the more open internet encrypted things not uh not manipulating data but you know selling user data i know that's got a bad exploiting i guess is the word is that that has a bad rap and trade this is kind of the anti right um whatever that would be you know what people associate Facebook with? Right. So again, on the quarterly call, again, I keep going back to that quarterly call because that gave me a lot of insight on especially this part, the IDFA part.

So what Jeff Green is saying here is only 10% of the traffic is based on IDFA, right? So they are making decisions on only 10% of that traffic. So what TradeDust is getting is almost around 12 million QPS. And what he's saying is if we stop getting this IDFA, it's not a big deal for us because we could just say, okay, we will effectively try to find gems within that 11 million traffic that we know what that traffic is based on the information we have for that uh traffic but uh it's not a big big deal for us but for companies like facebook they rely on that id like for 70 of the traffic yeah so that definitely is something trade desk uh sorry apple is going uh behind facebook's and the google's of the world not uh on behind the trade

desk of the world right so that is a good thing for companies like trade that's not a bad thing and the, if it would be a bad thing, if they would not have come up with any sort of solutions, but I see that they are coming up with a solution and and that makes me even more bullish because now it's, it's working well for the trade desk. Okay. And then last question here, before we wrap things up, I know it's tough because this company has done so well. It seems like they're got all their eggs in the right basket,

But what change would you like to see Trade Desk make? Maybe using their premium valuation to acquire some companies? I don't know. Is there anything you'd like to see them change? I don't think I would want to change anything here because they are firing on all cylinders and they are leading the pathway for the industry in terms of open internet.

So I don't know what better can they do from here. They mentioned that this was the best quarter in their company history, right? So again, they say that they are the enablers of this industry, not the disruptors. And I like when they have that sort of a mindset and I continue to be a happy shareholder and I would not change a single thing here.

All right. That's a good sign. That's some strong conviction right there. Yes. All right. I think that's it. Do you have any more questions? I have no more questions.

Okay. Deval, thank you for joining us. Where can people find you? What's your Twitter handle? it's the world underscore Kotecha. Okay, perfect. We'll link it in there because I know that we don't want people

messing up the spelling or anything, yeah. And it's Stock Detective Podcast if people want to look that up as well, right? I know you guys did a great overview because Kermit, he used to work at Amazon and you guys did a great overview on that company. So thank you. Okay, we want to thank you all for listening.

We should remind you, we are not financial advisors. Anything we say or discuss here on Chit Chat Money is not formal advice or recommendation. Thank you guys for listening. We'll see you next time.