The Trade Desk rings the closing bell of the Nasdaq Stock Market in celebration of the September 2016 IPO.
Source: Nasdaq
Shares in advertising technology firm The Trade Desk have fallen 20% since Tuesday’s close after Google released its latest guidance on Wednesday about its promise not to use technologies that track people individually over the internet.
Trade Desk shares fell 8% on Thursday, from a drop on Wednesday to a total of 20.4% below Tuesday’s close.
Trade Desk technology helps brands and agencies reach target audiences across all media formats and devices. The company also led the formation of Unified ID 2.0, which will feature email addresses as the basis for unique identifiers to help target ads to individuals. (The email addresses themselves are hidden.) The Trade Desk described the identifier as a superior alternative to cookies, which Google plans to stop supporting in its Chrome browser in 2022.
But Google’s post on Wednesday warned against solutions “like PII graphics based on people’s email addresses”. The post said: “We do not believe that these solutions will meet consumers’ growing expectations regarding privacy, nor will they face rapidly evolving regulatory constraints and therefore are not a long-term sustainable investment.”
This is probably casting some doubts on investors in terms of the future of these identifiers.
Google said that its post is about how its own advertising products will work and that it will not restrict what third parties do in Chrome for now. But Google could theoretically restrict that activity in Chrome in the future.
KeyBanc analysts said in a note that restricting alternative identifiers for Google products “clearly favors Google over the open Internet and poses an interesting dilemma for regulators – how should consumer privacy be balanced with market power?”
In a blog post on Thursday afternoon, The Trade Desk CEO Jeff Green said he received dozens of calls about what Google’s post means to his company and the open Internet. “It hasn’t changed much,” he wrote. “But what has changed will turn out to be positive.”
“With this announcement, Google is folding its own properties, such as search and YouTube, and adding bricks to the walls around those properties,” wrote Green. “The downside is that Google no longer values ad serving on the rest of the internet – certainly not as much as before.”
Other colleagues in advertising technology have also fallen dramatically since the Wednesday morning announcement. PubMatic’s shares fell 27.5%, Magnite fell 21.5%, Viant lost 17.2%, LiveRamp fell 14.7% and Criteo has fallen 7.8% since Tuesday’s close.
The declines also came amid a drop in the Nasdaq Composite, which fell more than 2% on Thursday afternoon.
Some analysts said their views on the sector’s shares did not change after Wednesday’s post. BMO downgraded LiveRamp, noting that it is “too hot in the kitchen”, and also raised its target price at Criteo.