Key insights
- Trade Desk's stock is under pressure after a report that Publicis advised clients against using its platform due to audit findings. Multiple brokerages downgraded the stock, citing concerns about potential client losses. This adds to existing challenges, including a weak Q1 revenue forecast and increasing competition from walled gardens like Amazon, impacting investor confidence.
By Anhata Rooprai
March 18 (Reuters) - Advertising technology firm Trade Desk's shares tumbled on Wednesday as Wall Street analysts downgraded the stock following a report that French ad giant Publicis Groupe advised its clients against using the company's media buying platform.
The stock slid nearly 6%, adding to Tuesday's 7.4% drop after Ad Age reported that a recent audit commissioned by Publicis found Trade Desk had violated multiple clauses of their agreement, prompting the adverse recommendation.
Trade Desk charged multiple fees that exceeded the limits of the agreement and opted clients into extra features without their consent, the report said, citing the audit.
Publicis did not respond to a Reuters request for comment.
"We're aware of questions related to a Publicis audit process. Any notion that TTD failed an audit is not true," Trade Desk said in an emailed response.
Unlike the closed ad ecosystems of Alphabet's Google and Meta-owned Facebook, Trade Desk is an independent intermediary that lets brands and agencies buy ads and run campaigns on any website or app they pick.
At least two brokerages downgraded the stock following the news, while three lowered their price targets.
"We're not quite sure how conservative current 2026 estimates might be if the company does, in fact, lose some of its client base as a result of this audit," Stifel said, lowering its rating to "neutral" from "buy."
Trade Desk's first-quarter revenue forecast fell short of analysts' estimates last month, and its shares have fallen nearly 34% this year, following a 68% decline in 2025.
The company faces stiff competition from so-called "walled gardens" that integrate content, commerce and user data to attract advertisers. Amazon's ad-buying platform, in particular, with its vast trove of shopper data, has become a formidable rival.
Rosenblatt Securities analyst Barton Crockett said declining revenues may be pushing ad agencies to a more confrontational stance with Trade Desk and into overlapping areas.
"We see potential that this could be emblematic of a structural change," Crockett said.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Diti Pujara)