Google crushed many digital ad rivals. But a challenger arises.

Alphabet Inc.’s

Google has crushed almost all of its competitors in the world of digital advertising technology. But a rival is emerging as the best hope to challenge the tech giant, if it manages to maintain its momentum.

The trading table Inc.,

Specializing in helping businesses buy online ads on publishers’ websites, it did what others failed: gobble up Google’s market share. While Google dominates that ad buying area with about 40% of the business, Trade Desk is up almost 8% and its share is growing faster than Google’s, according to ad technology consultancy Jounce Media.

Trade Desk has made headway against Google by investing in online advertising segments like streaming TV and audio where Google had not yet cornered the market. The 2020 pandemic was especially good for business. Americans confined to their homes consumed more digital media. Brands shifted money from television to digital advertising. Trade Desk revenue soared 26% compared to 2019, reaching $ 836 million.

Investors viewed Trade Desk as a Covid-resistant haven, and it was one of the best-performing stocks in 2020, with its share price tripling. With a market capitalization of $ 30 billion, the Ventura, California company is worth as much as the two largest ad agency conglomerates combined.

Trade Desk Chief Executive Jeff Green accepts the company’s role as anti-Google, but has no illusions about how difficult it is to take on the tech powerhouse. For starters, Trade Desk only competes in one corner of the ad market: most marketers’ dollars flow directly to Google and the proprietary properties of other large technology platforms, such as YouTube and Search, out of the reach of companies like Trade Desk.

Google’s announcement on Wednesday that it will end targeting ads based on individual users’ web browsing behavior and focus on targeting based on larger groups or “cohorts” could pose risks to Trade Desk. Taken as a privacy move, the change could actually play to Google’s strengths, Green and others in the industry say, because it has so much other data about consumers to use in targeting ads.

“They are leaning on an advantage they have from large, quasi-monopoly companies to be able to offer targeted advertising while taking steps to inhibit the ability of others to provide targeted advertising,” Green said in an interview.

Antitrust authorities in the US and abroad are investigating various elements of Google’s business. “This is a great move that needs to be looked at,” Green said of Google’s new targeting policy.

“We do not believe that web ad tracking meets the needs of consumers,” a Google spokesperson said in a statement, adding that the company will support ad targeting that uses “proprietary” data that companies collect about their customers. customers. “First-party relationships have always been critical to brands building a successful business, and it will be even more vital in a world where privacy comes first.”

Trade Desk shares fell nearly 13% on Wednesday as investors worried that Google’s announcement would reshape the industry at Trade Desk’s expense. The company’s shares fell 8% on Thursday. Green said the company has the opportunity to build an alternative targeting technology that may be the main rival to the approach Google is introducing.

Green, 43, has overcome all obstacles before. He grew up in a strict Mormon family of five children in Salt Lake City, wandering between the lower middle class and the poor, and has memories of queuing for government aid. The University of Southern California graduate worked in ad tech, then founded two ad tech startups and sold the second to Microsoft. Corp.

He founded Trade Desk in 2009. He made the company profitable after raising $ 7 million in venture capital and had raised $ 120 million at the time of its 2016 IPO. Green owns 53.5% of the voting power of his company and 10.75% of his shares, a stake valued at about $ 3 billion. He has enjoyed his wealth: He has several cars, and the “most exciting” is a white Porsche Taycan, he says.

He’s also been an aggressive philanthropist: he funded a scholarship program in the Channel Islands of California State University, where about 90% of students qualify for federal Pell grants for low-income students. The program started two years ago and has now funded 47 fellows, who have mentored 1,416 freshmen to date. Mr. Green is also committed to building a school in Nicaragua.

In online advertising, there are tools for every stage of the ad placement process: listing a space, auctioning it off, and engaging with buyers. The Trade Desk focused squarely on the buying side, betting that it could persuade clients that it would not be affected by conflicts by playing on all sides of the market.

“When you go to a grocery store, you have to be able to choose what you want to buy, not necessarily what the grocer wants to sell you,” said Steve Katelman, executive vice president of global digital partnerships at advertising agency holding Omnicom. Group Inc.

Trade Desk forged direct relationships with publishers and media companies such as NBCUniversal, Condé Nast, Fox of Comcast Corp. Corp.

, News Corp, parent of the Wall Street Journal,

Spotify, TikTok and Vox Media, obtaining the right to publish their advertising space directly in the Trade Desk systems. Those deals cut out the middlemen in advertising transactions, pleasing buyers and sellers.

Next year, Trade Desk will face a major challenge when Google removes third-party “cookies” from its market-leading Chrome browser. Cookies are text files that advertisers and publishers use to accumulate data about users’ web activity that can inform how to target ads.

Google’s decision on Wednesday to move away from individualized user tracking in its own advertising operations means that digital advertising could fork, with a Google ecosystem having one set of rules and the rest of the web following another.

“There is a starker contrast between the open Internet and Google now than ever,” Green said.

To compensate for the loss of cookies, Trade Desk is recruiting publishers and ad technology companies to create a new identifier for users, Unified ID, which would be compiled from their email address but encoded to protect their privacy. Any company on the network could access a user’s unified ID profile and provide data. Unified ID already has profiles for 50 million people, a Trade Desk spokesperson said.

Google said Wednesday that it would not use alternative identifiers of this type and that they would not meet the privacy expectations of consumers or regulators.

“It is a strategic mistake for Google to get rid of cookies, because for me, they are using privacy as a reason to do something that does not encourage competition and is bad for the open Internet,” Green said.

Write to Patience Haggin at [email protected]

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