Jefferies analysts have struck a cautious tone on The Trade Desk (NASDAQ:TTD), warning that recent developments involving one of its largest agency partners could pose risks to future revenue growth, even as the company disputes the claims.
This follows media reports that Publicis Groupe is no longer recommending The Trade Desk as a demand-side platform to clients after a third-party audit.
According to those reports, the audit, conducted by FirmDecisions, alleged that the company charged “multiple fees beyond what was contractually agreed” and in some cases applied its DSP fee on top of other charges in ways “not supported by the MSA.” It also questioned whether media and data costs were consistently passed through at cost, as required under client agreements.
A Publicis spokesperson confirmed the authenticity of an internal memo outlining the findings, while The Trade Desk has publicly refuted the allegations.
Jefferies framed the situation as a potential turning point. “It’s unclear how much spend will actually be pulled, but it undoubtedly places additional scrutiny on TTD fees and all of AdTech,” they wrote, concluding that they are “incrementally cautious on TTD.”
Publicis represents a meaningful portion of The Trade Desk’s business. Based on company disclosures and agency scale, Jefferies estimates the group accounts for at least 10% of annual gross billings. While that exposure is significant, the firm noted that the immediate financial impact remains uncertain.
“At this stage, it remains unclear whether Publicis intends to immediately remove spend from TTD, or whether the recommendation change reflects a pause, renegotiation, or client-by-client assessment,” the analysts wrote.
They added that demand-side platform selection is typically made by advertisers themselves, suggesting the shift does not necessarily imply an immediate removal of about 10% of gross billings.
Still, Jefferies views the development as a negative signal for future demand, as the removal of a holdco-level endorsement “could influence advertiser decision-making and slow incremental adoption over time.”
The firm also highlighted the potential for broader industry implications. “This headline is likely to permeate the broader ad-tech ecosystem,” the analysts said, with other agency holding companies expected to re-examine fee structures and audit outcomes.
Even without widespread pullbacks in spending, “heightened scrutiny around fee transparency, contract compliance, and opt-in practices could create near-term noise for TTD,” they wrote.
Jefferies maintained a 'Hold' rating on The Trade Desk with a $22 price target. Shares trade down almost 5% at about $24 on Wednesday afternoon.