Programmatic Advertising Is the Future, Trade Desk CEO Says

half percent. They gained twelve percent on the open and Trade Desk is an online auction platform for digital advertising. Here to tell us about it is the chief executive, Jeff Green. Jeff, thanks very much for being with us. Oh, thank you. Excited to be here all right. Well, congratulations about today's earnings report. The market seems to be loving it. It's up about Your stock is up about two after

being up more than ten percent in early trading. How do you describe your company to people that are not familiar with the inner workings of internet advertising? So we essentially help advertisers and especially their agencies by everything except for Google and Facebook. So there's this giant Internet that powers TV and radio and things like Spotify that also have ads on them. Uh. And so instead of just trying to monetize Google and Facebook, we're helping them get

ads on the rest of the Internet. How do you help them get those ads? Well, so what what they do is they'll come up with the creative but UH, figuring out like what is Yahoo worth to them compared to what is Spotify worth to them compared to what is CBS dot com worth to them is a really hard assignment. So we give them technology that helps them figure out where they should spend and what they should pay and how they should allocate. Now you have a

you're a veteran of the advertising industry. You sold one company, I believe to Microsoft. What the what propelled you to to start trade desk and how is it different? Yeah? So the last business that I created is uh was an ad exchange. So you can think of that like

the New York Stock Exchange. UM. So, we we built this exchange and once it became inevitable that ads would actually be traded through these exchanges, which, as your listeners, no, exchanges are a great great way to get price discovery and liquidity. Once that model became inevitable. What we, instead of being exchange wanted to build was a platform to

help people participate on the exchanges. So let's give them the text so that they know, uh, what to buy, where to buy it, and we can make more money and add more value that well, we're gonna yeah, that's where I want to go with the with the money for a second, because there is a range. For example, I understand, let's say you have inventor advertising inventory that costs fifteen dollars per CPU, right, per thousand impressions. But let's say you're sold out of that in your at inventory,

what would you do? Well, So it's a really really big internet, right, So there, Uh, if if you didn't have a video available on on Yahoo, um, there will be one on a o L. There will be one on somewhere else. And so one thing that is actually really works in our favor is that we only help buyers. Were just in the business of helping buyers decide what to buy. So we're on the buy side, and there's a bunch of other companies that focus on the cell side.

But because and unfortunately all of us as consumers know this, uh, it is actually not that hard to create more supply of ads on the internet. As soon as you get close to sold out, you can just throw another on the page, throw another thirty second spot in a commercial break. And so because of that phenomenon, we've predicted that it will always be a buyer's market because there will always be more supply than there is demand. And as a result, that helps our business always sort of be in the

power position. And does that also mean that targeted ads and programmatic UH content is worth more too specific advertisers, Oh, without a doubt in fact, that that's the future. So in the future, there will be fewer ads, they will be way more relevant. Consumers won't hate them as much because they'll all be something that they're interested in. That means that advertisers waste less money. It means that publishers

make more money. UH. Where the advertising industry is heading and frankly where we're taking it is a much better world than the one that we have today. But with that comes higher ices for for my clients, which will gladly pay because it's more effective than the increased costs. Are there any misconcert maybe what's the largest misconception that people have about the way the online ad business works, and particularly about how the referrals based on your viewing

pattern or your activity the suggested stories. Is there something that people really need to know behind the scenes. Um so, I think the biggest thing is just that Google and Facebook get a lot of credit for being amazing companies. I do think they're unbelievable companies. I mean, Facebook has done a better job of building advertising on ramps. They power millions of advertisers. Google has done the same thing. In fact, I've said many times I think Google is

the greatest invention of our lifetime. It's just changed the way information is distributed. But both of those companies primarily focus on monetizing their own properties. Right. They monetize Facebook dot com, Google dot com, and YouTube dot home. And so what many people don't know or or haven't really thought about is how does the rest of the Internet get monetized and where we come in as we just say, hey,

we're an objective player that doesn't own any media. We don't own, right, You're just working on behalf of your of your clients to place the ads where they where they need to be. Thanks, very interesting, Thank you very much. Jeff Green is the chief executive of the trade desk. You can follow them on the symbolist t t D. The shares of Facebook are up more than so far this well, the shares are j C. Penny are down

more than sixteen percent this morning. And uh, well that should tell you almost everything you need to know about the industry. Craig Johnson, though, is here. He's the president of Customer Growth Partners based in New Canaan, Connecticut. And Craig, all right, so we know that j C. Penny is down. We've heard the news from Macy's, from Coals, from Dillard's. List goes on, are we at a bottom? Well, we do think the sector's bottoming. PIM is nice as to catch up, by the way, and so, um, here's the

sector that for years has been bleeding market share. Uh. This year sales are down about five year of a year to date um uh. And that is while the retail sector overall is growing about three and a half maybe four. So you do the math. That's when you're growing slower than the market, you're going to be losing market share. Um. And so we think, however, because many of the stores are taking steps to reduce cost and to shrink their square footage, footprint. Um, they're able to

get cost and sales more in line. And when you match up supply demand, uh, that is the first step to bottoming. And then you've got to shrink first and then grow later. Who do you believe is doing the best job right now? You you you listen, you know, four or five papers companients ago, But in this sector,

Nordstrom continues to set the pace. Now. The one thing they do share with all the other players, whether J. C. Penney or Macy's or whoever, is that store only comps from the full line, the full price Nords and sources about those are still comping negative, slightly negative in nordstrom sake. Tough to get away from that. But what they've done is Nordstrom dot Com, the Rack, Nords from Rack, the

Rack dot com outlook, et cetera. They're different portals of reaching the customer are all otherwise positive and so that's why they are able to pull together, you know, pretty solid positive overall comp at Nords from and you know, gave pretty positive signals relative to going forward. All right, So alright, Nordstrom maybe an example of elite in how to fix things? Are they also part of this mall. This trend in what's going on in malls because you hear about all the mall is dead and so on,

but hasn't traffic kind of come back to the mall. Well, that's exactly right, that's what we're seeing. Um Uh. The mall traffic has been has been declining for you know, a good couple of years now, and this year until you know, until about the fourth of July was down about six percent by us maybe six seven uh for for traditional malls. Uh. What we have seen is that that six percent hasn't inflected positive It's not certainly plaus six percent, but instead it's gone throughout minus six to

about minus three as of July. So again we have to make sure that's sustained over time. But it's some of the best traffic year of year traffic that we've seen, um uh, you know, in in going on a year. So it's it's it's it's a positive sign. But by no means or malls out of the woods yet. And back to school, how is that going to play out? Well, we're right at the peak of the back to school season now start in July and it peaks in in

in early mid August. Uh, and so far that's actually shaping up pretty well, as I'm sure you know, for department stores, it's a key uh selling season, you know, number two behind um um uh, you know, behind Holiday. But for the specialty stores, uh and then the big box stores which as such as you know Walmart, you know, Target and so forth, this is a very big season. And so far, you know, it's still you know, we're just not quite the halfway point of it, but it's uh,

it seems to be on track. It seems to be doing pretty well. Well. How do you expect, I know, we're gonna get results Home, the Home Depot, Target, Walmart and so on, t j X, H. What what's your outlook for those companies? Well, we're the particular companies I mentioned we're pretty optimistic on and you know, one of the things we say to our clients is that don't don't read too much into the overall retail sector from the department stores, which are there only one point six

percent of the market. But you get companies like you know, Walmart and and and UH and and Home Depot and the Lows and t j X and Ross all reporting over the next week or so, and the numbers are almost always going to almost gonna be uniformly positive. Um, you know, Walmart is slowly coming back to health. It may not be the heavy growth days of the early two thousand's, but the home improvement guys Home Depot and Lows Home Depot particularly, and secondly low As are doing

quite nicely. And then t J is the whole off price sector. And again t J's and Ross both report this coming week. Uh, they're both going to have solid numbers, and that sector is is gaining as much share as the department store is losing in the apparel arena. Well, just to give the perspective of Walmart shares, they're up sevent so far this year. Craig, you do a lot of traveling, You do a lot of looking and talking

to people around the world about retail. Can you tell us about some geographical anecdotal information that maybe we'll highlight trends or tell you what is going on? What have you seen that has caught your attention? Well, you know, and so you know, we have a team of eighteen people you know here in the across the US, and then you know, one researcher in London, and uh, we're seeing an overall retail sector that seems to be um

coming back into health. It's maybe not back into full bloom yet um, but we're seeing some of the best uh traffic and sales trends that we had in sometimes the In the US, the growth is relatively balanced. There's maybe a little bit stronger growth in the on the west coast, number one, and in the the whole southern tier you know, Florida, you know, the the Caroline is you know, over to Texas, etcetera. And that's where we're a lot of the you know, the really most row

bus growth has been. But you know, the Northeast is not like the Northeast or the Midwest or down It's just that the the other sectors that I mentioned are you really uh um, you know, really coming on quite strong. What about merchandizing, the actual merchandise, the trends, the fashion. Is there something in particular other than a new iPhone

that you've seen the people really want. Well, the single hottest item right now it is in the electronics sector, and that's the Nintendo switch, and so that continues to be in short supply. This is whether you try to get it best by your target or Walmart and they simply have not been able to keep up with the demand. That's that's proven to be a real hot number in the fashion arena. You know, we're we're getting towards unit of the summer now, but it's been a very good

sandal season. Um. There's something called the cold shoulder look uh that a lot of the women, including younger women are are are going for that. Tell us where did that come from? And maybe define it for those that I don't know what it means. Is it's a garment, it's a top um, although it could be addressed that where the shoulders are exposed. Um, but fabric continues, you know, down your down your arm some distance. So there's it's like there's a cutout around your shoulder. Um, and where

did that come from? It you've now moved beyond my paper, Okay, but this is this is the hot trend. It's something but right now it's been out there for about a year now and some none of these trends come and goes, and we're anticipately that one that one may not make it very far into the fall and winter. I'll put it that way. Clearly, Well, the winter is not gonna make it happen. And what's the last thing that Craig Johnson bought for himself. I never buy anything for myself

in Paris, socks or something that I buy. I buy a few things here that I'm not a big shopper. I'm in retail, but I hate shopping well, said Craig Johnson is the president of Customer Growth Partners. He joins us from New Canaan, Connecticut. President Donald Trump stepping up his campaign of pressure on North Korea, warning the regime not to follow through with a missile test near Guam and promising massive response to any strike against the United

States or its allies. Here to tell us more, as Bill ferries, he is our national security reporter for Bloomberg News, and he joins us from Washington, d C. Bill, thank you for spending time with us. Can I just pick up on this idea of allies? Uh? Because I'm wondering. You know, we hear obviously the response from a President Trump, but what has been the position of the U. S allies that are in the region, South Korea, Japan and

so on. Sure? Thanks for having me, pam Uh. The initial reaction this week as all of this started to heat up was really um, a little more muted. I think there's still UH and and actually you're seeing that from some of the President's aids as well. There's still this idea that hey, it was it was just a week ago that the U. N. Security Council, you know, unanimously passed UH these much tougher sanctions on North Korea. Diplomacy seems to be working. UM, let's give that a

little bit more time. UM. And obviously, you know, a thing like sanctions that does take a while to uh to take effects. So I think a lot of UH, I think a lot of people have been caught off guard by this public war of words. UH. Some analysts we talked to will say that, uh, that Trump's comments and and actually the North Korean comments, that these are a lot of signaling to UH to China to really

get much more engaged. As we know, the President has really publicly pressured China to do all it's all it can to reign in the North Korean regime. Bill what are the relationships like between South Korea, Japan, China, the United States, Australia of course involved the Philippines there, What kinds of relationships exist that could make this UH situation a little less less fraud. Well, the United States is really kind of the glue that UH that keeps UH

South Korea and Japan UM in in this alliance. UH. The Australians have already come out and said that you know, they will they will support the US and any kind of a conflict there. The US, you know, every year regularly hosts a lot of military drills with its allies in Southeast Asia. I believe some of those are actually scheduled, and they've been long scheduled, but they're they're scheduled for

next week. A lot of effort goes into kind of getting the militaries to be able to communicate and coordinate together so that they're ready if this kind of a situation UM takes place. Now, I would just point out, you know, I realized tensions are high and the war of words has gotten pretty heated. UM. But you know, one one sign to me that there's no sort of imminent conflict is that Secretary Defense Secretary Maddis is been on this tour of the West coast uh in Seattle.

He was with Amazon in uh In in a Silicon valley today. I think he's going to Google's headquarters, and he has not cut short this trip. He's continuing on with a focus on technology issues. If he were to suddenly jump on his plane and have, you know, flown back to Washington, I'd be a lot more alarmed about what's going on at this point. Not to minimize the situation we're in, but that's, you know, one of these

things that people should keep their eyes on. Well indeed, I mean he was speaking at a Pentagon facility in Mountain View, California, and I believe he said that diplomatic efforts are quote gaining traction. Uh, so there is a lot of diplomatic activity that we do not know about. Is that correct? Well, exactly, I think it was. It was a little unclear. I think he was partly referring to the UN sanctions just last weekend. We do know that NICKI Haley, the U S Ambassador to the u N,

will be meeting with President Trump in New Jersey today. Uh. There's a lot of speculation about what what they may be discussing, but it would would be surprising at all if there's a little bit more of an effort at the at the U N to keep keep everyone on board and uh, and to look at any other potential measures. The president's tweet this morning that the United States you know, is locked and loaded. Uh. You know, I would add to that too, that he said, if Kim does anything,

we're ready. UM. To me, that was a sign that the US is not looking at some sort of a preemptive strike. Now. As someone that you know, you you've lived and traveled all over the world, and you have a perspective that is not just let's say, US centric, What do countries or diplomats that you've been able to uh, you know, ascertain what has been their reaction to this, uh, this situation, because I mean, this is not the kind of thing that just ends up being contained in a

small part of the world, perhaps, right. I think there's just a lot of surprise at the president's strategy, if we wanna, if we want to call it that I guess to be so public. I mean, every US president, every administration going back for twenty years, has dealt with some very over the top rhetoric and taunting from North Korea, and they've tended to ignore that in the past or you know, let it reflect a lot more on uh,

North Korea than on anyone else. I think everyone's just surprised that for the first time we're seeing US president coming out so aggressively, uh, in a style that really to some looks like the communication style of the North Korean regime. And just to give us the update, I mean, what kind of resources military resources currently exist or maybe even threatened by North Korea, because I believe the President even tweeted something from the U. S. Pacific Command today

about B one bombers. Sure, you know, as far as we can tell, there hasn't been any significant deployment of new forces to the region. So the President tweeted about the B one bombers and Guam, Uh, those have long been stationed there. They replaced a squadron of B fifty two bombers that were that kind of got phased out. Uh. You know, the military has as forces deployed all through the Pacific and through Southeast Asia. There's I think, uh

about thirty thousand US troops in South Korea. We have a lot of naval forces that go through that region. You might remember, I think earlier this year, it might have been in March or April, when tensions heated with North Korea. The President deployed very publicly said he was deploying a new a second aircraft carrier battle group to the region. And then we found out a nuclear submarine

was also in the region. We found out because the Pentagon basically put out a statement saying nuclear sub just stocked. We gotta leave it there. But thank you very much for your thoughts and your insight. Bill Ferries are a national security reporter for Bloomberg News. There is nothing small

when it comes to the price of collectible cars. And Frank Meekam is the director of consignment of MICAM Auctions and they are scheduled to have the Monterey Mikam Monterey and they will be presenting a daytime auction that will take place between August the sixteenth and the nineteenth at the Highatt Regency Monterey Hotel in Spa. And he joins us now to tell us more. Frank, always a pleasure, Thanks for being with me, Thanks Tim, thanks for having

me on. Where do you want to start? Let's start with cars, Okay, I mean, I'm I've been looking at this nine Ferrari long knows and that's just one of the ferraris that you've got. How many of you have a going on the auction block. We're going to have over forty Ferraris hit the block in Monterey. Uh, that's a neat car, neat story behind that to long knows it's it's a car that's been in the same ownership for over forty five years and in the collectible mark it.

You know, you don't see many cars that are that are coming off that long of ownership. What are the estimates for this? Uh, car like this should be somewhere right up at two million to We're estimated at one point nine to two point two. Now you mentioned the pedigree of the automobile that it was in a single owner's hands for forty five years. Maybe just tell people the pedigree is relevant, the mileage is relevant. What they call matching numbers. How does this all figure into the

actual value of this asset? There's there's so many things to start looking at. Is when you get to the pecking order of where car fits into the collectibility standpoint. And the one thing I tell people the you can't UH ownership history and being in long long term, well known collections is one of the best of things to have for for any car um for one person to have it it. It really solidifies that there's uh, there's no stories behind the car and and it is what

it is. Well, one story behind a group of cars that I think are coming up to auction. There is the rock star, late rock star Jay Giles colling about that collection. Uh. You know, everybody knows uh Jay Giles as the rock star, but in our hobby, he was known as one of the top Ferrari mechanics of his time, UM and sportcar mechanics. So that was his other real passion.

And UH, to be able to offer his his collection after his passing, uh, it's really special to our company and we're really excited to be able to do it this year. One of the automobiles a sixty one Ferrari to T unique car another orneat Ferrari. Uh. You know when when you're talking uh Ferrari's, it's it's really a entry level collectible in that uh to sev range. You know a lot of those sixties Ferraris. You start getting into seven figure cars and what do you find that?

Because I know he's also got you got to do Katti, So he's also got motorcycles and I believe what racing suits. I mean, so the whole memorabilia and collectibles is not just in the automobile. It's it's everything. It's it's everything that he put together over the years. He was into so many different things, UH, sports cars, sports bikes, racing. UH,

just just a lifetime of collecting. So what have you seen in the market, Because we ran an article in Bloomberg Business Week saying that in certain areas of the collectible car market there's a little bit of softness. There's there's been a little bit of softness in UH certain areas, but we've also seen a lot of growth in certain areas. UH. The American American built market right now is on fire.

We just had our sale in Harrisburg last week and we sold to UH to Mopar wing cars UM for for very high prices that cars like that haven't seen in eighteen months. All right, Well, good luck with the with the auction, and good luck with the Ferra. Much appreciated. Frank macom is the director of consignment for Macome Auctions and that auction takes place in Monterey, California, August sixte through. Thanks for listening to the Bloomberg P and L podcast.

You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramowits one before the podcast. You can always catch up worldwide on Bloomberg radioh