Challenges and Opportunities in the CTV Ecosystem: Evan Shapiro in Conversation With Matthew Henick of The Trade Desk
Kicking off the latest Streaming Media Connect, media universe cartographer Evan Shapiro sat down for an in-depth discussion about the challenges and opportunities of the CTV ecosystem with Matthew Henick of The Trade Desk.
They discussed the importance of fairness, transparency, and user-centric strategies in the ad-supported streaming landscape, and they highlighted the need for better ad personalization, efficient ad inventory management, and the alignment of incentives to enhance the overall user experience and support premium content creation.
The introduction of the Ventura streaming OS
Shapiro mentioned that Henick has been working on Ventura, a new CTV operating system and department at The Trade Desk, for quite some time.
“As far as I know, this is the first time you've worked on a product like this, and this is also a real departure inside the company itself,” Shapiro said. “So, what does that feel like? How long have you been there?”
“Five months and three days,” Henick said.
“So not only are you a new employee, but you're a new employee at a whole new division, and you're doing something new yourself. How does that feel?” Shapiro asked.
“It is certainly a departure for The Trade Desk in that it's their first consumer-facing product,” Henick said. “We are a software company, but that software has mainly been enterprise-focused. It's for the largest advertisers and agencies in the world. But it's not a departure in that it's an extension purely from our mission. The Trade Desk is 15 years old, but if you go back to our S-1, the docs you file when you go public, one of the first sentences is that we aim to help our clients compete in the marketplace of ideas. And this is exactly what that is. It's just a new marketplace as we move to connected TV.”
The importance of fairness and transparency
Henick emphasised that a large part of The Trade Desk’s success has been by bringing fairness and transparency to the advertising ecosystem end-to-end. “And truthfully, the CTV ecosystem is an unfair game right now,” he said. “It's unfair to every one of those participants. There's a lot of conflicts of interest there. When you think about why something is ultimately unfair, if you're building a mobile app or a game or whatnot, you can usually trace that back to the rules and incentives put in place at the operating system level. That is where the most leverage sits, whether it's with Windows, iOS and Android with mobile, and now with CTV. So, you look at that world, and at least in the US, but mainly globally, you see that three of the five largest market cap companies on earth are the big players there.”
Shapiro asked, “How do you ensure fairness through the platform that you're offering? What are you doing to address that? How do you tilt the incentives? How do you shift the incentives? What does that mean in practical terms?”
Henick said that The Trade Desk’s core business has always been built around objectivity. “We will never own ad inventory because we always want to be able to work with advertisers and have them trust that we will always place their dollars in the best place at the best price no matter where it is on the open internet,” he said. “Similarly, we will never have our own content platform. One of the big conflicts is that those large television operating systems – whether they're Apple, Google, or Amazon – have their own content offerings. They're not totally objective about where they're trying to steer people's interest and eyeballs. We think having objectivity puts us at a huge advantage in bringing about this change.”
User-centric strategies and personalization in the ad-supported streaming landscape
Henick also noted that The Trade Desk will remain focused on user-centric strategies and personalization in the ad-supported streaming landscape. “From the user perspective, you're being trained, whether you realise it or not, to ignore a large percentage of the pixels on your home screen,” he said. “Because they're being used by that platform to steer you to the most margin accretive place. And this is because the operating systems at those three of the five largest market cap companies in the world are generously the hundred and 50th most important priority at that company. These companies are shipping their priorities into your living room, and you are learning to move around those huge squares trying to get to the thing that you want. Seven out of 10 times when you turn on a television, you know exactly what you want to watch, and these operating systems have an incentive to steer you to something else, hopefully to their own platform. So again, objectivity and being able to clarify the incentives with content publishers will just lead to a better user experience.”
Shapiro said, “[So] you see the opportunity to shift more ad dollars to the appropriate places in CTV to fund this next golden age of television. More ad dollars to the ecosystem allows these folks to fund a better set of content that gets put out there as well.”
The alignment of incentives to enhance the overall user experience and support premium content creation
Ultimately, Henick underscored The Trade Desk’s focus on enhancing the overall user experience by supporting premium content creation in an open and transparent environment. “If you do a quick Google search now and look at what Jeff Green, our founder and CEO, has been saying, you're not going to see another tech CEO sit on a stage and talk about the importance of journalism, the importance of premium content, the importance of protecting this content, and protecting this portion of the open internet. That is incredibly rare. We're at this moment where a lot of these large tech companies are building media products, but often in the service of something else. [But] this is our core business. It always has been and always will be.”
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