The Trade Desk, long considered one of the most innovative independent players in adtech, is facing mounting pressure as Amazon accelerates its ambitions in digital advertising. On Wednesday, Netflix announced that it will team up with Amazon to allow advertisers to buy ad inventory on the streaming giant through the Amazon DSP starting in the fourth quarter of this year.
The Amazon DSP — short for demand-side platform — is a self-service software tool that helps advertisers plan, target, and buy ads across Amazon-owned properties as well as a wide network of third-party apps and websites. For years, The Trade Desk carved out a leadership position in this arena, serving as the go-to DSP for advertisers eager to reach audiences in the booming connected-TV (CTV) market. Now, Amazon is quickly positioning itself as a formidable rival.
Amazon’s Growing Clout in Adtech
The Netflix deal underscores how aggressively Amazon has been moving into digital advertising. Once a quiet presence, Amazon has steadily expanded its DSP to compete not just with The Trade Desk but also with Google’s dominant ad-buying platforms. By securing high-profile partnerships, Amazon is laying the groundwork to eventually become the world’s top DSP.
Netflix already works with multiple DSPs, including The Trade Desk, but adding Amazon into the mix tilts the competitive balance. Amazon has also struck recent deals with Roku and Disney, two key players in connected television, further eroding The Trade Desk’s advantage in premium streaming partnerships. For advertisers, Amazon offers the scale of its retail and e-commerce data as an added layer of targeting power, making its DSP especially attractive.
Wall Street’s Reaction
Investors wasted no time reacting to the news. Shares of The Trade Desk fell more than 10% on Wednesday, extending a painful slide that has seen the stock lose over 60% of its value year to date. The decline came after analysts at Morgan Stanley downgraded the stock to “equal-weight” from “overweight” and slashed their price target from $80 to $50.
Notably, the downgrade was issued before the Netflix-Amazon partnership was even made public. In their note, Morgan Stanley’s analysts pointed to “lingering execution concerns, softness in the open web ad market, and intensifying competition in CTV” as reasons for caution. Amazon’s growing DSP business was highlighted as a particularly sharp threat.
Analysts at Lightshed Partners were more blunt after the partnership became official: “It is glaringly obvious The Trade Desk is under attack,” they wrote in a research note, underscoring the seriousness of Amazon’s encroachment.
The Trade Desk’s Response
The Trade Desk has tried to downplay the competition. On the company’s August earnings call, CEO Jeff Green insisted that “Amazon is not a competitor.” That comment raised eyebrows, and this week’s developments suggest Wall Street isn’t convinced.
In response to the Netflix-Amazon news, a spokesperson for The Trade Desk emphasized the company’s commitment to openness. “We have always believed in an open and competitive marketplace,” the spokesperson said. “We are often an early partner for good reason, and we hope we are a catalyst for a sustainable open ecosystem with competition. We believe that the more open and competitive the market is, the greater our opportunity to win.”
Indeed, Netflix ads can also be purchased through other platforms, including those run by Yahoo, Google, and Microsoft. The Trade Desk remains a significant partner, but the arrival of Amazon — with its scale, data, and growing influence — represents a new era of competition.
What It Means for the Adtech Landscape
The battle for dominance in connected-TV advertising is intensifying. The Trade Desk built its reputation on providing independent, transparent tools for advertisers seeking alternatives to the “walled gardens” of Google and Facebook. But Amazon’s entry into premium partnerships changes the dynamics. With its unrivaled consumer data, massive retail ecosystem, and growing roster of streaming partners, Amazon is uniquely positioned to disrupt the market.
For now, The Trade Desk still commands loyalty among many advertisers who value its independence. Yet the Netflix-Amazon partnership is a stark reminder that even the most innovative firms are vulnerable when giants like Amazon decide to compete head-on.
