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Investing.com -- The Trade Desk (NASDAQ: NASDAQ:TTD) stock fell 3% Monday as investors reacted to a new partnership between Amazon (NASDAQ:AMZN) Ads and Roku (NASDAQ:ROKU) that could pose a competitive threat to the digital advertising platform.
The collaboration between Amazon (NASDAQ: AMZN) and Roku (NASDAQ: ROKU) will create what the companies describe as the largest authenticated connected TV (CTV) footprint in the U.S., exclusively through Amazon’s demand-side platform (DSP). This integration will reach an estimated 80 million U.S. CTV households, representing more than 80% of the total CTV market according to ComScore data.
Early tests of the partnership showed advertisers reached 40% more unique viewers with the same budget while reducing ad frequency by nearly 30%, potentially delivering three times more value from ad spend.
Bloomberg Intelligence analyst Geetha Ranganathan noted: "Fears about competitive threats to Trade Desk’s ad budgets in 2H, especially from Amazon’s DSP (demand-side platform) are only about to get stronger with a new pact between Amazon and Roku, which makes Roku’s inventory available on Amazon DSP from 4Q. Though TTD remains the only scaled-up independent DSP, recent reports about marketers moving budgets to Amazon are clouding TTD’s growth narrative, given the former’s heft and full-funnel capabilities."
The partnership enhances addressability across major streaming apps including The Roku Channel, Prime Video, and other leading CTV streaming services on Roku and Fire TV operating systems, as well as popular streaming services from Disney (NYSE:DIS), FOX Corporation, Paramount, Tubi, and Warner Bros Discovery (NASDAQ:WBD).