- Publicis Groupe alleged that The Trade Desk improperly applied its DSP fee to additional charges and billed the firm and some clients for tools they were automatically enrolled in.
- Publicis also reportedly said that The Trade Desk did not provide the auditor with the necessary information to validate that the media and data costs were invoiced at cost.
- A TTD spokesperson reportedly denied the claims that TTD had failed an audit.
Shares of The Trade Desk Inc. (TTD) declined more than 7.5% on Tuesday after a report said that Publicis Groupe advised clients that it would no longer recommend the company as a demand-side platform (DSP) for digital media buying.
According to a report from ADWEEK, which cited an email sent to select clients on Tuesday, the global communications and marketing firm said that The Trade Desk had failed an audit by a third-party consultant, FirmDecisions, evaluating its fee structures, and media and data spend.
Meanwhile, retail traders dismissed the report.
Memo Details
According to the report, Publicis Groupe alleged that TTD improperly applied its DSP fee to additional charges and billed the firm and some clients for tools they were automatically enrolled in, without evidence of authorization, the audit found.
Publicis also reportedly said that TTD “did not provide our auditor with the information necessary to validate that the media and data costs were invoiced at cost, without mark-up as per our agreement.”
“Accordingly, we can no longer recommend The Trade Desk for our clients,” the firm said in the note, as per ADWEEK. The report also said that a Publicis spokesperson confirmed the memo's authenticity.
Meanwhile, the report says that a TTD spokesperson denied the claims that the company had failed an audit, adding that the auditor had requested data that would be in violation of confidentiality agreements.
Insider Purchase
Earlier in March, co-founder and CEO Jeff Green reported that he purchased approximately 6 million TTD shares, valued at about $148 million. The CEO said that he had also received restricted stock and stock options as compensation.
In an opinion piece on The Current, Green said that “the biggest purchase” of his life was because he was “putting my money where my mouth is.”
“I’ve never been more convinced that our approach is the right one, and that our people — our greatest asset — will deliver on that promise. That conviction and that promise are what I’m investing in,” he said.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around TTD shares jumped from ‘bearish’ to ‘bullish’ territory over the past 24 hours amid ‘low’ message volumes.
One bullish user said that it was contradictory for the CEO to buy a large volume of shares if the company had truly failed an audit.
Another user recommended buying the dip, calling it an algorithm-driven dip.
Shares of TTD have declined more than 32% this year.
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