The Trade Desk hits 52-week high on deal to sell video ads on Amazon Fire TV

Key Points
  • Amazon has opened up connected TV apps integrated with Amazon Publisher Services for advertisers working with Dataxu and The Trade Desk.
  • Advertisers will now be able to buy ad inventory for third-party TV content providers on Amazon's Fire TV devices using outside companies.
  • In a memo to employees that was reviewed by CNBC, The Trade Desk CEO Jeff Green said the deal is the company's "most important initiative in [connected TV] to date."
The Trade Desk rings The Nasdaq Stock Market closing bell in celebration of its September 2016 IPO.
Source: Nasdaq

Amazon is opening up some of its video ad inventory to outside ad tech companies.

The company will now open up inventory of Amazon Publisher Services on third-party networks that show up in its Fire TV marketplace. Those are the ads that appear on apps from networks on the Amazon Fire TV devices, like Discovery or ESPN+. Amazon announced the change in a blog post on Friday.

In effect, this opens up ad inventory to external programmatic buyers for their clients in a way that lets them much more clearly see how their ads are working than before. Historically, advertisers buying on big "walled garden" platforms from Google or Facebook haven't gotten the full picture of how their ads are performing.

The inventory will now be open to The Trade Desk, a company that provides technology that helps brands and agencies target and reach audiences across media formats and devices. The Trade Desk's stock was up 7.6% as of Friday afternoon, at one point reaching its 52-week high.

Dataxu (pronounced: data zoo), an advertising tech company that runs digital and linear TV advertising using data and analytics, will also work with Amazon's new offering. Advertising can also be bought through Amazon's own platform, Amazon DSP. Amazon Publisher Services said media buyers using these platforms to buy ads will have access to "top quality inventory" as well as the ability to minimize repetitive ads and a way of letting buyers easily see how much they paid, how much fees cost and what a publisher was paid.

In a memo to employees that was reviewed by CNBC, The Trade Desk CEO Jeff Green said the deal is the company's "most important initiative in [connected TV] to date."

"As the total addressable market for advertising grows toward $1 trillion, about half of that will be in video, and most of that will be in premium TV," he wrote. "Advertisers are eager to access CTV inventory because it allows them to be much more precise and data driven in their massive TV ad campaigns than they can ever be with linear investments. Publishers are equally eager to bring premium content to CTV channels so that they can capitalize on the potential for more relevant, valuable advertising, increasing the value of every ad spot, and helping fund this golden era of TV. And the consumer benefits through improved ad frequency and relevance."

He added that this is an indication that Amazon Publisher Services is supportive of the open internet. "Amazon Publishing Services is supporting the open internet, in contrast to other big tech walled gardens," he wrote. "It's a bold move which may drive action from other CTV aggregators."

Dataxu CEO Mike Baker said Amazon Publisher Services' launch of a connected TV exchange "changes everything."

"It will catalyze an already-hot programmatic CTV ad market," he said in a statement. "...As consumers make streaming the primary way to watch TV, more and more publishers are embracing programmatic ad monetization. But it's creating a very fragmented landscape. Dataxu is 'connecting the dots' across players to make it easy to run CTV ad campaigns with precision at scale."

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