URGENT UPDATE: Netflix has just announced a groundbreaking partnership with Amazon that allows advertisers to purchase ads on its platform through Amazon’s demand-side platform (DSP). The deal, confirmed on Wednesday, is set to launch in the fourth quarter of this year, marking a significant challenge for adtech competitor The Trade Desk, which has already seen its stock price plummet.
The new agreement means advertisers can leverage Amazon DSP to reach Netflix’s vast audience, further intensifying competition in the advertising technology space. The Trade Desk’s stock has already been halved this year, and this latest development has sent shares down over 10% on Wednesday alone. Year-to-date, The Trade Desk’s stock is down more than 60%, raising alarms among investors.
Morgan Stanley analysts reacted swiftly, downgrading The Trade Desk’s stock from overweight to equal-weight and slashing their price target from $80 to $50. They cited “lingering execution concerns” and “softness in the open web ad market,” exacerbated by Amazon DSP’s rapid growth.
Jeff Green, CEO of The Trade Desk, previously asserted that “Amazon is not a competitor,” but this statement is now under scrutiny as analysts contend that The Trade Desk is facing a direct threat. “It is glaringly obvious The Trade Desk is under attack,” noted analysts at Lightshed Partners, amplifying the urgency surrounding this partnership.
Amazon has been expanding its media partnerships, recently signing deals with both Roku and Disney, which only adds to the competitive pressure on The Trade Desk. This partnership with Netflix not only enhances Amazon’s advertising capabilities but also signals a strategic move to position itself as a dominant force in the connected-TV (CTV) advertising space.
In a statement, a spokesperson for The Trade Desk emphasized the company’s commitment to an open marketplace, asserting, “We believe that the more open and competitive the market is, the greater our opportunity to win.” However, with Amazon’s aggressive moves, many industry observers are questioning whether The Trade Desk can sustain its market position.
As the advertising landscape shifts, all eyes will be on how this partnership unfolds and the impact it will have on The Trade Desk’s future. The urgency is palpable, and stakeholders are advised to monitor developments closely.
This evolving story highlights a critical moment in the advertising technology industry, where strategic partnerships could redefine market dynamics. Share this article to keep others informed about this significant shift.
