Programmatic, Cross-Screen TV Propel Revenue Growth For (Some) Video DSPs

VidPlatPublic video platforms Tremor Video, TubeMogul and YuMe released Q4 and FY 2015 results over the last week, citing rapid uptick in their respective programmatic (with the exception of YuMe) and cross-screen video businesses.

Tremor Video

Tremor on Thursday reported revenue of $51.8 million in Q4, which beat its guidance by about $6 million and returned the company to profitability. Full revenue for the year was up 9% YoY to $173.8 million. Total spend in Q4 was $67.9 million, up 62% YoY while full-year spend was $203.9 million.

Programmatic drove 47% of Tremor’s overall revenue versus last year when it contributed only 14% in the same period.

“We’ve seen a lot of adoption on the buy and sell side around our programmatic platforms and expect it to be 50% or more of our overall revenue in 2016,” CEO Bill Day told AdExchanger. “For all of the research predicting programmatic’s rapid growth, we’re definitely seeing that.”

In past quarters, Tremor’s short-term profitability took a hit because of product development cycles. In 2013, the company was heads-down on a number of tools, including Tremor’s yield optimization platform, which it released last year.

“Now that we’re in-market with our products for both the buy and sell side, we’re in a tailwind position,” he claimed. Another growth driver is what Tremor calls its “nonprogrammatic, higher-function” products, which includes an All-Screen planning tool. That category clocked $25.7 million in spend last quarter. 

Mobile video in particular has been a healthy growth area, with close to 50% of spend across its managed and self-serve businesses now coming from mobile, the company claimed.

Day expects the convergence of digital video and over-the-top TV will drive more deal opportunity for Tremor over the next couple of years (not a "next-quarter" pursuit). For example, it's working with DISH's streaming video service Sling TV to explore monetization.


Video demand-side platform TubeMogul, which focuses exclusively on the buy side, also experienced growth in its cross-screen business. Non-desktop pre-roll formats accounted for 37% of total spend in Q4 with 82% of platform services campaigns including a minimum of two screens.

TubeMogul’s programmatic TV platform (PTV) also accounted for 10% of total spend in Q4 and had a $60 million annual run rate its first year in-market. TubeMogul then released a cross-screen TV planning and media mix platform in November.

“Advertisers who use our cross-screen planning system are trying to understand what incremental reach they were driving off of their TV buys, ” said TubeMogul CEO Brett Wilson during the company’s Q4 earnings call on Monday. “We had already had the ability to buy these media channels discretely (mobile, video, TV), but this software helps you figure out what you should be spending.”

The cross-screen system will be generally available to its self-serve clients (Platform Direct) by the end of the year. TubeMogul’s managed services clients (Platform Services) currently can access it.

TubeMogul’s total revenue for FY 2015 was $180.7 million, a 58.7% increase over last year. Total spend through its platform increased 63% to $414.2 million for the full year. Tube’s Platform Direct client base grew by 25% year over year to 446 customers in the fourth quarter.

In addition to unlocking “new baskets of spend” across mobile and linear TV, social video will be a big priority for TubeMogul in 2016.

“We’ve had a longstanding partnership with Facebook and the way we combine video/TV planning makes us complementary, not competitive to them,” Wilson said. “The plan is to add Facebook and Instagram video within the first half of this year … [and] we hope to add all [social video] like Snapchat, Twitter, at some point.”


YuMe, which reported its Q4 and FY 2015 results on Feb. 18, still struggled to show material increases in programmatic.

YuMe’s CEO Jayant Kadambi said the company was focused on bringing a buy (YuMe for Advertisers) and sell-side platform (YuMe for Publishers) to market and “we’ve been encouraged with the way the pipeline has progressed.”

He said programmatic revenue was somewhere in the range of $1 million-$2 million, and that it expects meaningful results later in the calendar year. (YuMe's CFO later clarified that the $1 million-$2 million was derived from average trading desk revenues, not platform license fees).

In Q4 of last year, YuMe alluded to a new slate of programmatic offerings it predicted would drive top-line growth in 2015.

Fourth-quarter revenue was $53.8 million, which beat YuMe’s guidance of $52 million, but still represented a 5% decrease in revenue over Q4 of last year.

While YuMe’s total revenue for the year was in line with Tremor’s at $173.3 million, it was a 2% decrease from 2014 revenues of $177.8 million.

With the growth of connected TV and YuMe’s push to onboard new clients, one Wall Street analyst questioned the company’s revenue decline and wondered what forces would help return the company to growth in 2016.

YuMe says its differentiator is the data it is able to bring to bear through a cross-screen SDK, so CTV is a big focus.

“Because we capture data across supply and demand, we feel we are in a stronger position than companies who focus only on one side,” Kadambi said.

When analysts asked whether YuMe was focused on acquiring new clients or extending its product footprint within its existing base, Kadambi responded that customers aren’t reluctant to try out new offerings because current platforms are “wanting.”

Tremor’s Day declined to comment on YuMe as a competitive platform, but said he thinks video platforms that balance premium inventory access and programmatic trading capabilities will win.

“We feel we’ve combined our programmatic strategy with other high-impact products and that’s the growth story,” he said. “I think TubeMogul’s done a very good job on the buy side of taking their historical aptitude around TV metrics and then combining that with programmatic. So the combination of the two [premium and RTB/programmatic specs] is where the magic happens.”


Correction: Tremor's total spend in Q4 was $67.9 million, while its Q4 revenue was $51.8 million. The story has been updated to accurately reflect that breakdown.


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