1/2/2021 1 Stock for Cable TV's "Ticking Time Bomb"

MOTLEY FOOL REPORTS

1 STOCK FOR CABLE TV'S

"TICKING TIME BOMB"
One company leads the way as a pioneer in the advertising industry.
March 1, 2020

The internet has turned the advertising industry on its head. Before, marketers mostly bought ad space on print media, radio, and
television. Today, internet advertising has largely supplanted print media and radio. The reason is simple: advertisers have a much better
idea of who sees their ads online than they do anywhere else. That’s because companies like The Trade Desk (Nasdaq: TTD) can analyze
online behavior to accurately identify a person’s interests.

Such information is invaluable to marketers who, for the longest time, stuck to a “spray and pray” model of advertising. Essentially,
advertising agencies would place ads on media properties that attracted the largest number of people – whether or not those people were
actually good prospects for the product or service being advertised. Sure, there were ways to zero in on media properties that attracted
particular types of prospects, but you could never be completely certain.

The internet has changed all of that through programmatic advertising. And The Trade Desk is leading the way as a pioneer in this exciting
industry. The company, through its cloud-based software, allows its customers to buy targeted ad space on many different channels like
social, mobile, video, audio, and more. Its product has worked so well for customers that the company has managed to retain more than
95% of its users – a number many companies can only wish to achieve.

What might be the most exciting thing about this company is its connected-TV solution. Many people across the world are cutting the cord.
And there’s a growing contingent of young people who have never paid for cable, opting for streaming TV over the traditional route from
day one. This will only continue as more and more streaming TV options become available. But, the problem for many media companies is
that the economics for streaming aren’t that great. The ads they sell over streaming don’t perform well enough to bring in much revenue.
And this problem has prevented many companies from offering their content over the internet – until now.

"The TV business is a ticking time bomb right now."

Trade Desk CEO Jeff Green

TV advertisers still largely follow the old-school, “spray and pray” model for TV ad buying. But connected TV is a new ballgame. Because
when someone streams a show, they typically access it with an email address. And that email address is associated with countless hours of
online browsing that The Trade Desk can analyze. By using The Trade Desk’s product, advertisers can buy connected-TV ad space in a
much smarter way. And by advertising to better prospects, marketers will be willing to pay more, driving increased ad revenue over
streaming media, incentivizing those who have previously been reluctant to enter into streaming services to dip a toe into the market.

Programmatic advertising is growing at phenomenal rates. Yet, it only represents a small sliver of the $652 billion global advertising
market. We are confident The Trade Desk will continue to be a leader of this industry as programmatic continues to swallow up more of the
advertising market. Traditional TV advertising still follows yesterday’s model, and it’s still the medium that attracts the most ad dollars.
This will change as more people cut the cord, and we think The Trade Desk will be at the white-hot center of this shift.

Tom Gardner owns shares of The Trade Desk. The Motley Fool owns shares of The Trade Desk. The Motley Fool has a disclosure policy.

THE STOCKS TO KNOW

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1/2/2021 1 Stock for Cable TV's "Ticking Time Bomb"

The Trade Desk

Symbol: TTD

Current Price: $ 801.00

Today's Change: -$ 17.00

PE (TTM): 259.6167589910534

EPS (TTM): $ 3.09

52 week range: $ 136.00 - $ 972.80

Market Cap: $38B

Sector: Technology

Asset Class: 1

Conviction: High

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