Can Retail Media be the Next Major Growth Driver for TTD After CTV?

The Trade Desk, Inc. TTD, one of the well-known names in the programmatic ad space, is betting big on the retail media space to boost its performance. For TTD, Connected TV (“CTV”) has emerged central to its growth strategy, with video ads making up a high-40s percentage share of spend. Now, it is eyeing aggressive expansion in the rapidly growing retail media space to capitalize on one of digital advertising’s next big growth drivers.

Retail media can be understood as digital advertising space, retail data assets and in-store opportunities offered by retailers to drive a marketer’s advertising campaigns. The company’s retail data marketplace offers access to purchase data to advertisers for reaching high-intent consumers across mobile to audio to CTV and beyond. TTD has highlighted that advertisers are utilizing retail data from its marketplace to connect ad spend with real-world sales.

Strategic partnerships with the likes of Walmart DSP, Roundel (Target’s retail media platform) and Albertsons Media Collective augur well. On the last earnings call, TTD noted that both CTV and retail business were gaining steam and brands were finding “tremendous value” with Walmart DSP.

Kokai, TTD’s next-gen platform, is helping advertisers leverage third-party data more effectively, with campaigns using over 30% data elements per impression. Management stated that the platform is now delivering on lower funnel KPIs, including 24% lower cost per conversion and 20% lower cost per acquisition.

Given the above factors, retail media could become TTD’s next high-growth engine as brands seek more accurate attribution and higher return on investment (“ROI”).

Taking a Look at How Competitors Are Ramping Up Their Efforts

Criteo S.A. CRTO is a major player in retail media through its Criteo Retail Media division. CRTO’s AI-driven Performance Media business and leading capabilities in the Retail Media segment bode well. Criteo’s Commerce Media Platform includes demand-side (Commerce Growth and Commerce Max), supply-side (Commerce Grid and Commerce Yield) and data-driven identity solutions, making it a full-stack, vertically integrated platform. This helps the company capture value across the ad tech value chain and reduce overdependence on legacy retargeting. The company has been transitioning from its legacy retargeting business toward high-growth areas, such as Retail Media and Commerce Audiences.

Criteo's media spend was $4.3 billion in the last 12 months and $919 million in the first quarter of 2025. In the first quarter, Retail Media on-platform revenues grew 17% year over year, driven by strength in Retail Media onsite. It now has a partnership with 70% of the top 30 U.S. retailers, up from 65% in the last quarter.  Three hundred new brands were onboarded in the first quarter, taking the total global brands count to more than 3,800 for Retail Media. CRTO also launched an onsite video solution, which offers a full-funnel onsite advertising suite, into general availability. Launches with Office Depot and Costco Canada show that offsite Retail Media is scaling.

PubMatic PUBM is also actively expanding in retail media. Per a Grand View Research report, the global retail media platform market size is expected to witness a CAGR of 8.4% between 2024 and 2030. Consequently, players in the ad tech space are actively pursuing this new growth opportunity. PubMatic is also heavily investing in Activate for SPO (supply path optimization), Convert for commerce media, and Connect for curation to drive growth and create sticky customer engagement.

Strategic partnerships like Spectrum Reach and TCL in live sports augur well. In the last reported quarter, CTV’s revenues surged more than 50% year over year, while omni-channel video revenues grew 20% and represented 40% of total revenues.

TTD Price Performance, Valuation and Estimates

Shares of TTD have lost 31% year to date compared with the Internet – Services industry’s decline of 1.9%.

In terms of forward price/earnings, TTD’s shares are trading at 40.88X, higher than the Internet Services industry’s ratio of 19.07X.

The Zacks Consensus Estimate for TTD’s earnings for 2025 has been unchanged over the past 30 days.

TTD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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