A Tale of Two Earnings Calls: TTD and LiveRamp

This commentary originally appeared as a tweet. It went hard, so I’m sharing a more detailed version here.

As of this weekend, The Trade Desk’s stock was up 28% over 5 days and LiveRamp was down 19%. Both companies had earnings calls last week. Why the divergence despite seemingly strong financial results from both firms?

No doubt there are many reasons for the disparate performance that are beyond me. But here's the marketing angle.

TTD has a better story that is especially likely to resonate with investors reacting to industry trends. TTD is propagating a story about digital advertising that puts it at the center of the industry and makes its success feel inevitable, while LiveRamp’s story is unclear, and its position in the industry feels uncertain amid privacy changes, especially Google’s.

A story should do two things: differentiate the company from competitors and galvanize its audience.

TTD's story, as reflected in its earnings call transcript, is crystal-clear: Marketing value is shifting to the premium internet (a term we, by the way, just invented), and we are the most effective portal to the premium internet. The walled gardens are peddling trash and grading their own homework. Our competitors on the open web are consistently performing worse than us because they've been slower to embrace retail media / CTV and have less scale. Marketers, our customers, are facing unprecedented pressure, and we are the primary lever they need to pull to succeed.

(I'm not saying this story is indisputable; I'm saying it's coherent and compelling. The story, like any company narrative, is susceptible to critique. Most importantly, TTD’s claim to be the gatekeeper of the premium internet is partly predicated on its ability to orchestrate addressable advertising on the same. To do that, it needs to be able to verify audiences, hence the amount of time and resources it has invested into OpenPass, its single sign-on product, and UID2, its email-based ID. But the longevity of UID2 is less than obvious.)

LiveRamp, meanwhile, mentions a "story" four times in its earnings call. But the closest thing the company’s leaders offer to a story is that their identity solutions, especially via partnership with Google's PAIR, drive performance. CEO Scott Howe mentions being "a little bit more aggressive in terms of the return on ad spend story that we're sharing with the market." ROAS isn't a story; it's a metric. 

In the absence of a sweeping story that positions LiveRamp's success as inevitable, the impression someone walks away with, having read the earnings call transcript, is that LiveRamp's sales cycles are getting longer, its customers are already wary to make new identity/data investments, and Google's recent announcement on cookie deprecation is only going to exacerbate the problem. LiveRamp ends up sounding far from inevitable or mission-critical. It sounds like an option that, yes, delivers results (eg ROAS) but that marketers may hesitate to act on given secular trends.

On top of its inability to instill a sense of urgency (one of a marketing message’s two objectives), LiveRamp is essentially passing on the opportunity to define its category in a way that distances it from competitors (a marketing message’s other objective). On the earnings call, an analyst explicitly asks LiveRamp about its chief competitor in the data collaboration space, InfoSum. Howe plays the classic market leader strategy of pretending the competitor is irrelevant, saying, “We don’t see them in the market, and our clients aren’t talking about them.” But I’d suggest that, by the time analysts are asking about a rival on the earnings call, the cat is out of the bag. InfoSum is an increasingly well-known competitor to LiveRamp, they’re using the exact same terminology (google LiveRamp; it calls itself the “data collaboration platform of choice”), and by failing to explain why they supposedly are the platform of choice, LiveRamp is letting doubts fester unchallenged about both its pipeline and its ability to fend off challengers.

In short, TTD's story positions it at the forefront of the entire digital advertising industry and sows doubt about its competitors, even Google and Meta. LiveRamp's story (or lack thereof) does nothing to differentiate it (they're pretending their competitors don't exist) and positions it as vulnerable to industry trends. Stories are critical, and every CEO should have a marketer in their corner who can both evangelize the company publicly and craft the most effective possible story to be shared on earnings calls and elsewhere.

When it comes to gaining customers and influencing investors, marketing matters.