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Investing.com -- Shares of Trade Desk (NASDAQ:TTD) tumbled 2.75% following a report by Ad Week that marketers are reallocating millions in advertising spend from Trade Desk to Amazon (NASDAQ:AMZN)’s advertising platform. The shift is particularly noticeable in the connected TV sector, where advertisers are citing Amazon’s competitive pricing, better inventory access, and increased flexibility as primary reasons for the transition.
The movement of ad budgets represents a significant challenge for Trade Desk, as advertisers seem to favor Amazon for several advantages. Notably, a global auto brand has redirected approximately $80 million in annual ad spend to Amazon by the end of the first quarter. This decision was influenced by the opportunity for the brand to sell cars directly on Amazon. Additionally, a global tech brand has moved nearly $5 million of ad spend from a single campaign to Amazon, though it continues to use Trade Desk’s services.
The report suggests that Amazon’s lower fees, an improved user interface, and enhanced measurement visibility are key factors in attracting more ad spend. Amazon’s exclusive live sports content and the growing reach of Prime Video also contribute to its appeal. Moreover, Amazon is perceived as offering a more collaborative partnership model compared to its competitors.