During a very muted period for tech IPOs, Trade Desk has just filed its papers to go public. Anyone familiar with the company knows it's been anything but quiet for them of late.
Trade Desk is in the crowded advertising technology market and is one of the main tools being used by the Republican Party as it tries to maintain its majority in the U.S. Senate. Candidates in tight races are employing Trade Desk's targeting tools to reach the precise voters who can potentially put them over the top.
Clients include U.S. Senator Kelly Ayotte, a Republican from New Hampshire, who's in a close re-election battle against the state's Democratic Governor Maggie Hassan. Republican Senator Roy Blunt of Missouri is using Trade Desk in his quest to fend off Secretary of State Jason Kander.
Richard Burr of North Carolina and Ron Johnson of Wisconsin are in the same boat. In fact, the National Republican Senatorial Committee is itself a client.
CNBC.com used Ghostery, a browser plug-in that shows which ad programs are running on a website, to see who's using Trade Desk. Campaigns often hand their digital ad buying over to an agency rather than managing it themselves.
Trade Desk, which filed its prospectus on Monday, didn't disclose how much of its revenue comes from political campaigns. But investors certainly have to consider what happens to the growth rate next year and the years that follow.
Digital spending on political ads will quadruple in 2016 over the mid-term season of 2014, reaching $1 billion, according to eMarketer. Online ads will account for 9.8 percent of total ad spending this year, up from 3.6 percent in 2014 and 1.8 percent in 2012, the researcher said.
At Trade Desk, revenue in the first half of 2016 climbed 83 percent from the same period a year earlier to $77.6 million.
Digital ad spending on elections
| Year | Digital ad spending | % of total |
| 2008 | $20 mln | 0.4 |
| 2010 | $10 mln | 0.2 |
| 2012 | $160 mln | 1.8 |
| 2014 | $270 mln | 3.6 |
| 2016 | $1 bln | 9.8 |
Source: Source: eMarketer
Trade Desk acknowledges the risks, but you have to search for it in the filing. In the risk factors section of the prospectus where the company discusses swings in the ad-tech market, Trade Desk said, "political advertising could also cause our revenue to increase during election cycles and decrease during other periods."
A representative from the Ventura, California-based company didn't respond to a request for comment.
Unlike most tech companies at the time of an IPO, Trade Desk is profitable, generating earnings of $6.6 million in the first six months of the year. The company reported a loss of $40.7 million attributable to common shareholders due to the repurchase of convertible preferred stock.
In the convoluted ad-tech market, Trade Desk has a host of competitors. The only one it mentions is Google, which of course competes with everyone. Additionally, Trade Desk said it goes up against "mostly smaller, private companies."
As a so-called demand-side platform, Trade Desk serves ad buyers who want to reach the most relevant users or prospects. Much of that ad placement takes place through auctions, and Trade Desk lets clients participate in the real-time bidding. For political campaigns, Trade Desk has access to registration history on 180 million voters as well as filings from the Federal Election Commission covering donations from 2002 to 2014, according to its website.
Trade Desk says its technology can target people based on their interests and specific locations.
Senate Republicans, in particular, are hoping Trade Desk can help recapture some momentum. Currently, Republicans hold a 54 to 44 advantage over Democrats with two independents. But less than three months out from the election, the website RealClearPolitics.com has 47 seats favoring the Democrats and 44 the Republicans, with the rest up for grabs.
It's not just the Senate. House Speaker Paul Ryan is utilizing Trade Desk in his re-election campaign. And on the Democratic side, John Gregg in Indiana is counting on the software in his effort to replace Donald Trump's running mate Republican Mike Pence as governor.
According to Ghostery, Trade Desk is serving both sides of the North Carolina gubernatorial race, where Democrat Roy Cooper is attempting to unseat Republican Pat McCrory.